Bloomberg Law SCOTUS on Suits Against Investment Firms & Death Penalty
Dec 13, 2025
James Park, a securities law expert from UCLA, delves into the Supreme Court's review of whether investors can challenge fund management decisions under an old law. He discusses the balance between SEC enforcement and private lawsuits. Andrea Lyon, a capital defense attorney, then explores the complexities of intellectual disability in death penalty cases, particularly the Smith case, highlighting the challenges of proving disability in court. Their insights reveal the potential implications of the Court's decisions on both investment and civil rights.
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Court Skeptical Of Implied Private Suits
- The Supreme Court is reluctant to recognize implied private rights of action unless Congress clearly authorizes them.
- Recent justices favor textual interpretation over legislative history when deciding private remedies under federal statutes.
Activist Strategy Against Closed-End Funds
- James Park explained Saba Capital's tactic of buying large stakes in closed-end funds to push governance changes.
- He described how funds responded by using state-law measures to strip activists' voting rights.
Textual Ambiguity Drives Circuit Split
- The core legal question is whether the Investment Company Act's text implies a rescission remedy for shareholders.
- Circuits are split, with the Second Circuit allowing implied suits while others reject them, creating Supreme Court review.