The U.S. Court of Appeals for the Second Circuit upheld a District Court ruling that the use of control share bylaws by certain Nuveen closed-end funds violates Section 18(i) of the Investment Company Act of 1940. The bylaws attempted to eliminate the voting rights of any shares held by an investor above 10% of the outstanding shares of a fund. The court held that the measures violated Section 18(i), which “requires that every share of common stock issued by a registered investment company must be a voting stock and have equal voting rights with all other shares.” The court affirmed the District Court’s decision granting rescission of the illegal bylaws and declaratory judgment in favor of the investor challenging the bylaws.
Morris Kandinov LLP represented Bulldog Investors, LLP as amicus curiae in support of the investor in the action.
The case is Saba Capital CEF Opportunities 1, Ltd., et al. v. Nuveen Floating Rate Income Fund, et al., No. 22-407 (2d Cir. Nov. 30, 2023).
For more information, contact Aaron Morris.