#Actio corporate asset advisors registration#
#Actio corporate asset advisors trial#

#Actio corporate asset advisors trial#

On appeal, the Second Circuit disagreed with the trial court that Section 47(b) creates no private right of action. A senior noteholder naturally disagreed, and was granted summary judgment enforcing the indenture’s payment provisions, based in part on the district court’s conclusion that no private right of action exists to assert rescission claims under Section 47(b).

#Actio corporate asset advisors registration#

To this end, the holder asserted a rescission claim under Section 47(b), alleging that certain of the trust’s notes had been resold to non-qualified purchasers, leading the trust to be in violation of the ICA’s registration requirements. A junior noteholder, who stood to receive no distribution of the trust’s assets under the trust indenture’s “waterfall” payment provisions, sought to avoid the effect of those provisions and thereby reorder the distribution priority. The trust claimed exemption from registration as an investment company under the ICA pursuant to Section 3(c)(7)-which exempts issuers whose securities are owned exclusively by “qualified purchasers” as that term is defined in the statute. District Court for the Southern District of New York was between senior and junior noteholders in a special purpose investment vehicle organized as a trust. Instead, the litigation initiated in the U.S.

The dispute in Oxford University Bank did not involve a mutual fund.

While an additional private right of action under the ICA raises the prospect of expanded litigation risk for advisers and funds, the scope of new litigation might be limited in practice by the requirement that the plaintiff be a party to the allegedly violative contract. In recent years, most courts have interpreted the ICA as providing only one private right of action-a claim for excessive advisory fees against investment advisers and their affiliates expressly granted to mutual fund shareholders under Section 36(b).

that Congress’ intent in enacting Section 47(b) was to grant contracting parties a right to sue for rescission of a contract that allegedly violates the ICA. is unenforceable by either party.” The Second Circuit concluded in Oxford University Bank v. Section 47(b) of the ICA provides that “ contract that is made, or whose performance involves, a violation of. In an August 5 holding that could open the door to a new breed of litigation claims involving mutual funds, the United States Court of Appeals for the Second Circuit ruled that the Investment Company Act of 1940 (“ICA”) creates an implied private right of action that several other courts had previously declined to recognize.