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Securities Regulation- Federal Courts-Private Rights Of Action Under The Investment Company Act Of 1940, Lee D. Powar

Michigan Law Review

Two actions for damages were brought against officers and directors of a mutual investment fund alleging violations of the Investment Company Act of 1940. These actions, by the fund itself and by a stockholder on behalf of the fund, were consolidated in a federal district court. The court denied defendant's motion to dismiss for want of federal jurisdiction. On an interlocutory appeal by the non-affiliated directors, held, reversed. The Investment Company Act of 1940 does not expressly or by implication create a private right of action cognizable in the federal courts against non-affiliated directors. Brouk v. Managed Funds, Inc. …