Oral Argument: FS Credit v. Saba | Fund Feud: Forcing Fiduciary Fairness Through Federal Lawsuits

FS Credit v. Saba | Fund Feud: Forcing Fiduciary Fairness Through Federal Lawsuits | Argument Date: 12/10/25 | Docket Link: Here

Question Presented: Whether Section 47(b) of the Investment Company Act of 1940 gives private plaintiffs a federal cause of action to seek rescission of contracts that allegedly violate the Act.

Overview

The Supreme Court will decide whether activist investors can sue investment funds directly in federal court when funds adopt governance provisions that allegedly violate federal securities law. Four closed-end funds adopted Maryland Control Share Acquisition Act provisions to strip voting rights from shareholders acquiring more than 10% ownership, prompting Saba Capital to seek rescission under Section 47(b) of the Investment Company Act. The case creates a fundamental clash over private enforcement of securities laws versus exclusive SEC regulatory authority, with implications for millions of Americans who invest in mutual funds and closed-end funds.

Question Presented:

Oral Advocates:

• For Petitioner (FS Credit) and Respondents (BlackRock): Shay Dvoretzky, Washington, D.C.
• United States as Amicus Curiae in Support of Petitioners: Max E. Schulman, Assistant to the Solicitor General, Department of Justice
• For Respondent: Paul D. Clement, Alexandria, VA

Timestamps:

[00:00:00] Oral Argument Preview

[00:01:23] Oral Argument Begins

[00:01:36] Petitioner Opening Statement

[00:03:40] Petitioner Free for All Questions

[00:19:29] Petitioner Round Robin Questions

[00:30:53] United States as Amicus Curiae Opening Statement

[00:32:17] United States Free for All Questions

[00:42:11] United States Round Robin Questions

[00:46:27] Respondent Opening Statement

[00:48:55] Respondent Free for All Questions

[01:16:48] Respondent Round Robin Questions

[01:16:58] Petitioner Rebuttal