Foley & Lardner LLP associate William McCaughey assessed a major securities case as it comes before the U.S. Supreme Court next month in the BoardiQ’s article, “Activists: Industry Groups Are ‘Dead Wrong’ in ’40 Act Read.”
The Supreme Court granted certiorari in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd. to resolve a circuit split on the question of whether Section 47(b) of the Investment Company Act of 1940 creates an implied private right of action for shareholders.
McCaughey said the Supreme Court may give particular consideration to a joint brief submitted by legal scholars and former U.S. Securities and Exchange Commission officials, though he noted amicus briefs overall are not necessarily “game changers.”
“The court is likely to give the most weight to amici’s arguments on the plain meaning of Section 47(b) and the historical context of similar blue sky laws when Congress adopted Section 47(b),” McCaughey added, referring to the state level regulations aimed at protecting investors from securities fraud.
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