FS Credit Opportunities Corp. et al. v. Saba Capital Master Fund, LTD., et al.
No. 24-345 · Decided June 11, 2026 · Reversed and remanded
Does Section 47(b) of the Investment Company Act (ICA) impliedly empower private parties to sue for rescission of any contract that allegedly violates the Act? Section 47(b) of the ICA does not impliedly empower private parties to sue for rescission of contracts that allegedly violate the Act.
Vote & lineupBarrett delivered the opinion of the Court, joined by Roberts, Thomas, Alito, Gorsuch, Kavanaugh (6). Dissent(s): Kagan; Jackson (joined by Sotomayor).
⚠ summary flagged: missing/empty section: THE DECISION; missing/empty section: DISSENT SUMMARY
The question
Does Section 47(b) of the Investment Company Act (ICA) impliedly empower private parties to sue for rescission of any contract that allegedly violates the Act? The dispute centers on whether activist investors can use this provision to void fund resolutions that limit voting rights. Specifically, the Court must determine if the phrase "at the instance of any party" in 15 U.S.C. §80a-46(b)(2) creates a private right of action.
Petitioner's argument
Petitioners, the Funds, sought to prevent the rescission of their resolutions opting into the Maryland Control Share Acquisition Act. They argued that Section 47(b) of the ICA does not create a private right of action for private litigants to initiate lawsuits. They contended that the statute's structure and the primary enforcement role of the Securities and Exchange Commission preclude such a remedy.
Respondent's argument
Respondents, Saba, sought to rescind the Funds' resolutions on the grounds that they violate the ICA's