FS Credit Opportunities Corp. v. Saba Capital Master Fund
FS Credit Opportunities Corp. v. Saba Capital Master Fund | 12/10/25 | Docket #: 24-345
24-345 FS CREDIT CORP. V. SABA CAPITAL MASTER FUND, LTD.
DECISION BELOW: 2024 WL 3174971
CERT. GRANTED 6/30/2025
QUESTION PRESENTED:
The courts of appeals have split 2-1 over whether Congress created an implied
private right of action in Section 47(b) of the Investment Company Act (ICA), which
provides:
(1) A contract that is made, or whose performance involves, a violation of this
subchapter ... is unenforceable by either party ....
(2) To the extent that a contract described in paragraph (1) has been performed, a
court may not deny rescission at the instance of any party unless such court finds that
under the circumstances the denial of rescission would produce a more equitable result
than its grant and would not be inconsistent with the purposes of this subchapter.
15 U.S.C. § 80a-46(b)(1)-(2).
The Third and Ninth Circuits, relying on statutory text and structure, hold that
Section 47(b) does
not
create an implied private right of action, and a panel of the
Fourth Circuit has agreed in an unpublished opinion. Only the Second Circuit-where
plaintiffs may be able to sue most investment funds subject to the ICA, given New York's
and the New York Stock Exchange's roles in financial operations- holds the opposite
based on an "inference": parties may bring a lawsuit under Section 47(b), even though
Congress never said so.
The question presented is whether Section 47(b) of the ICA, 15 U.S.C. § 80a-46
(b), creates an implied private right of action.
LOWER COURT CASE NUMBER: 23-8104, 24-79, 24-80, 24-82, 24-83, 24-116, 24-189
10 December 2025, 9:33 pm