Supreme Court Bars Private Lawsuits to Enforce Securities Law

Supreme Court Associate Justice Amy Coney Barrett in Washington on Oct. 7, 2022. Evelyn Hockstein/Reuters

The U.S. Supreme Court on June 11 ruled 6–3 that private parties are not allowed to sue to enforce the federal Investment Company Act.

In this case, the high court sided with asset managers and investment funds and reversed a lower court ruling that allowed the respondent hedge fund, Saba Capital Master Fund, to sue under the statute to void fund bylaws that limited the voting power of activist shareholders.