Second Circuit Find Private Right of Action to Rescind Contracts Under Investment Company Act

The Second Circuit has created a split with the Third and Ninth Circuits by finding that Section 47(b) of the Investment Company Act provides plaintiffs an implied private right of action with regard to contracts, and the plaintiffs in that case could therefore seek rescission of the contracts in the form of junior notes.  This creates a split among the circuits that may eventually go to the Supreme Court for resolution.  In the meantime, plaintiffs in the Second Circuit may want to consider whether this would be an appropriate remedy for them.