FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd. · ¶1

The Investment Company Act (ICA) comprehensively regulates investment companies. The ICA designates the Securities and Exchange Commission as its primary enforcer and expressly permits shareholders and issuers of securities to enforce two of its provisions. The question presented in this case is whether Section 47(b) of the ICA impliedly empowers private parties to sue for rescission of any contract that allegedly violates the Act. Petitioners (“Funds”) are investment companies that manage closed- end mutual funds. These funds are “closed” because each contains a fixed number of shares issued at one time, and the price of each share is determined by trading on the open market. Respondents Saba Capital Master Fund, Ltd., and Saba Capital Management, L. P., (collectively, Saba) engage in activist investing—a practice that involves identifying low-performing closed-end funds and purchasing…

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