Category: 3. Business

On June 30, the U.S. Supreme Court agreed to hear a case that will determine whether Section 47(b) of the Investment Company Act of 1940 (ICA) creates a private right of action for shareholders of registered investment companies to bring lawsuits for alleged violations of the statute. The Second Circuit Court of Appeals has recognized such a right of action since 2019, opening a back door to litigation claims by private plaintiffs for alleged ICA violations, despite Congress having granted the Securities and Exchange Commission (SEC) sole regulatory authority to enforce the ICA. Other circuit courts of appeal have rejected a Section 47(b) private right of action. This week, the Supreme Court granted certiorari in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd. to resolve the circuit split. The outcome of the appeal, to be heard in the Court’s October 2025 term, will have broad implications for registered funds governed by the ICA (including mutual funds, exchange-traded funds (ETFs) and closed-end funds), as the litigation door opened by the Second Circuit risks upending the long-established regulatory structure that is the fund industry’s bedrock.

In the ICA, Congress granted fund shareholders a single express private right of action to bring lawsuits – namely, a claim for allegedly excessive advisory fees under Section 36(b), which was added to the statute by amendment in 1970. Applying key Supreme Court precedent from 2000, lower courts have uniformly declined to read into the statutory language implied private rights of action to enforce other ICA provisions. The sole outlier was the Second Circuit’s 2019 decision in Oxford University Bank v. Lansuppe Feeder, LLC, recognizing an implied private right of action under Section 47(b). This provision states that a contract “whose performance involves … a violation of” the ICA cannot be enforced by any party to the contract. The Second Circuit panel concluded in Oxford University Bank that this language implied Congress’ intent to provide a private right of action to sue for “rescission” of a contract involving an alleged violation of another provision of the ICA.

Since Oxford University Bank, so-called “activist” investors like hedge fund manager Saba Capital have repeatedly seized upon Section 47(b) as an entry point to challenge closed-end fund by-laws as violating other provisions of the ICA regarding fund capital structure and board elections. These litigations have been in support of Saba’s closed-end fund “arbitrage strategy” seeking to dismantle such funds to obtain short-term profits at the expense of other shareholders. Tellingly, the SEC has not taken any enforcement action to challenge the bylaws in question as violating the ICA.

But the back door threat posed by a Section 47(b) private right of action extends well beyond the closed-end fund “activist” strategy, as explained in an amicus brief submitted to the Supreme Court by the Investment Company Institute (ICI) and the Asset Management Group of the Securities Industry and Financial Markets Association (SIFMA AMG) in support of Supreme Court review. Because fund management and operations are nearly always fully externalized, virtually every task involved in managing a fund and distributing its shares is undertaken by the fund’s investment adviser or other service providers pursuant to a written agreement with the fund in exchange for a fee. If fund shareholders can assert litigation claims for “rescission” of such service agreements based on alleged violations of other ICA provisions in the “performance” of the contracts (regardless of whether the SEC believes the ICA was violated), the potential litigation theories contrived by the private plaintiffs’ bar are almost limitless in scope.

The consequences of a potential flood of litigation claims by the plaintiffs’ bar via Section 47(b) go beyond wasteful litigation expense. The registered fund industry relies heavily on the stable regulatory framework established through the SEC’s decades of rulemaking, exemptive orders, no-action letters and other guidance. Private litigation claims, in which courts would not necessarily be bound by the SEC’s interpretation of the statute, could risk contradictory interpretation and significant regulatory uncertainty, dampening industry innovations and ultimately harming shareholders. The Supreme Court’s decision in FS Credit Opportunities Corp. could have a significant impact on all facets of the registered fund industry and bears close attention.

Ropes & Gray litigators represented ICI and SIFMA AMG in connection with their amicus brief to the Supreme Court.

The selective, dual T-cell agonist invikafusp alfa (STAR0602) showcased antitumor activity when given as monotherapy in patients with advanced, antigen-rich gastrointestinal (GI) tumors, including those naive and resistant to anti–PD-(L)1 therapy, with a safety profile consistent with selective T-cell activation, according to data from the phase 1/2 STARt-001 trial (NCT05592626).¹

Data presented at the 2025 ESMO Gastrointestinal Cancers Congress demonstrated that patients with tumor mutational burden–high (TMB-H) GI tumors (n = 17) achieved an overall response rate (ORR) of 23.5% and a disease control rate of 63%. In patients with TMB-H metastatic colorectal cancer (mCRC; n = 12), the ORR was 25%. Among those with microsatellite instability–high (MSI-H) GI tumors (n = 6), the ORR was 33.3%.

Regarding safety, most treatment-related adverse effects (TRAEs) were transient, low grade, and occurred during the first 2 doses of invikafusp alfa. No instances of immune effector cell–associated neurotoxicity syndrome, grade 4 TRAEs, or treatment-related deaths were reported. Cytokine release syndrome (CRS) occurred at any grade in 87.0% of patients treated within the optimal biologic dose range (n = 23). CRS was reported at grade 1 (13.0%), grade 2 (65.2%), and grade 3 (8.7%). Notably, the study did not utilize primary prophylaxis with corticosteroids or tocilizumab (Actemra), and step-up dosing was not used.

“The US FDA [previously] granted fast track designation for invikafusp alfa in TMB-H mCRC,” lead study author Elena Elez, MD, PhD, said in a presentation of the data. “Phase 2 dose-expansion cohorts are ongoing in TMB-H or MSI-H/mismatch repair–deficient [dMMR] tumors to confirm the efficacy signal from phase 1.” Elez is an attending physician in the Gastrointestinal Tumors Service of the Medical Oncology Service of the Vall d’Hebron University Hospital in Barcelona, Spain.

Invikafusp Alfa and STARt-001 Background

The T-cell agonist is intended to revitalize antitumor T-cell responses in vivo via the selective activation and expansion of Vβ6 and Vβ10 memory-like effector T cells. The agent also features an interleukin 2R agonist.

STARt-001 is a dose-escalation and -expansion study evaluating invikafusp alfa monotherapy in patients with unresectable locally advanced or metastatic solid tumors. In phase 1, patients needed to have TMB-H, MSI-H/dMMR, or virally associated tumors. Phase 2 also included a cohort for patients with TMB-H and/or MSI-H/dMMR mCRC. All patients needed to have an ECOG performance status of 0 or 1, and they could not have liver metastases unless they were adequately treated and stable. Prior anti–PD-(L)1 therapy was allowed but not required.

During dose escalation, invikafusp alfa was given at 1 of 6 dose levels ranging from 0.01 mg/kg to 0.16 mg/kg once every 2 weeks. The 0.08-mg/kg and 0.12-mg/kg doses were determined to fall within the optimal biological dose range; the 0.08-mg/kg dose given once every 2 weeks was established as the recommended phase 2 dose.

The incidence of dose-limiting toxicities served as a primary end point in phase 1; ORR was the primary end point in phase 2.² Safety is a primary end point in both phases.

Select Case Studies

During the presentation, Elez highlighted 4 patients treated with invikafusp alfa during the study who achieved a confirmed or unconfirmed partial response (PR). The 2 confirmed PRs spotlighted included a patient with RAS wild-type, microsatellite stable (MSS) mCRC who had a TMB of 10 mut/mb, primary anti–PD-(L)1 resistance, and liver metastases; and a patient with KRAS G12D–mutated, MSS CRC with a TMB of 10 mut/mb and disease that was naive to PD-(L)1 inhibition. These 2 patients achieved target lesion shrinkage of –58% and –38%, respectively.

Among the 2 unconfirmed PRs highlighted by Elez, 1 patient had MSI-H mCRC with a TMB of 16 mut/mb and secondary anti–PD-(L)1 resistance, and the other had MSI-H gastroesophageal junction cancer with a TMB of 14 mut/mb and primary PD-(L)1 resistance. Both of these patients experienced target lesion reductions of –31% at their first tumor assessment.

Data on T-Cell Expansion

Vβ6 T-cell expansion in the blood increased from 7.22% at baseline to 15.7% at day 8 of treatment; Vβ6 T-cell expansion within the tumor rose from 8.85% at baseline to 14.6% at day 8. Notably, increases between baseline and day 21 were also observed for CD3-positive T cells (41.0% at baseline vs 50.5% at day 21), CD8-positive T cells (11.9% vs 22.1%), and CD4-positive T cells (28.3% vs 41.0%).

Expanded Safety Findings

Outside of CRS, the most common any-grade TRAEs reported in patients treated in the optimal biologic dose range included pruritus (60.9%), nausea (47.8%), chills (43.5%), vomiting (43.5%), rash (39.1%), infusion-related reaction (21.7%), arthralgia (17.4%), pyrexia (13.0%), and hypotension (8.7%). Grade 3 TRAEs outside of CRS comprised pruritus (13.0%), rash (8.7%), and arthralgia (8.7%).

Disclosures: Elez reported receiving honoraria, serving in consulting or advisory role, and being part of a speakers’ bureau for Agenus, Amgen, Bayer, Bristol Myers Squibb, Boehringer Ingelheim, Cure Teq AG, GlaxoSmithKline, Hoffman La – Roche, Janssen, Johnson&Johnson, Lilly, Medscape, Merck Serono, MSD, Nordic Group BV, Novartis, Organon, Pfizer, Pierre Fabre, Repare Therapeutics, RIN Institute, Rottapharm Biotech, Sanofi, Seagen International GmbH, Servier, and Takeda; and receiving research funding from Abbvie Deutschland Gmbh & Co KG, Agenus, Amgen, Array Biopharma, AstraZeneca, Bayer Pharma, BeiGene, Bioncotech Therapeutics, S.L., Biontech Rna Pharmacuticals GMBH, Biontech Small Molecules GMBH, Boehringer Ingelheim, Boehringer Ingelheim de España SA, Bristol Myers Squibb International Corporation, Celgene International SARL, Dalichi Sankyo, Debiopharm International SA, Enterome BioScience SA, Exelixis, Genentech, Gercor, GSK, HalioDX SAS, Hoffmann-La Roche Ltd, Hutchinson Medipharma Limited, Hutchison MediPharma, International, lovance Biotherapeutics, Janssen Research & Development, Janssen-Cilag SA, MedImmune, Menarini, Menarini Ricerche SPA, Merck Health KGAA, Merck Sharp & Dohme de España SA, Merus NV, Mirati, Nouscom SRL, Novartis Farmacéutica SA, NuCana, Pfizer, PharmaMar SA, Pledpharma AB, Redx Pharma, Sanofi Aventis Recherche & Développement, Scandion Oncology, Seattle Genetics, Servier, Sotio A.S., Taiho Pharma USA, and Wntresearch AB.

References

1. Elez E, Garralda E, Parikh A, et al. Phase I/II clinical investigation of invikafusp alfa, a first-in-class TCR-beta chain-targeted bispecific antibody, as monotherapy in patients with anti-PD(L)1-resistant, antigen-rich gastrointestinal (GI) cancers. Presented at: 2025 ESMO Gastrointestinal Cancers Congress; July 2-5, 2025; Barcelona, Spain. Abstract 479MO.
2. A study of a selective T cell receptor (TCR) targeting, bifunctional antibody-fusion molecule STAR0602 in participants with advanced solid tumors (START-001). ClinicalTrials.gov. Updated January 30, 2025. Accessed July 2, 2025. https://clinicaltrials.gov/study/NCT05592626

Scientists sometimes compare predicting the course of epidemics to forecasting the weather.

But there’s a major difference — the impact of human behavior —  says Alessandro Vespignani, director of Northeastern University’s Network Science Institute. 

Consider what happens during a downpour, he says. “If we all open an umbrella, it will rain anyway.”

“In epidemics, if we all open the umbrella in the sense that we behave differently, the epidemic will spread differently,” Vespignani says. “If we are more risk averse, we might avoid places. We might wash our hands more and so on and so forth.”

That makes modeling the interplay between human behavior and infectious disease transmission one of the remaining key challenges in epidemiology, according to a paper Vespignani and colleagues published in Proceedings of the National Academy of Sciences (PNAS).

“It’s very difficult to integrate behavior in the models,” especially since existing behavioral models often lack real-world data calibration, says Vespignani, Northeastern’s Sternberg Family Distinguished Professor.

But now, thanks to what they learned during COVID-19, researchers say they have found a solution.

The pandemic released a global flood of data in terms of traceable illness and death, accompanied by electronic data such as geolocation from mobile phones that indicated changing patterns in daily commutes, Vespignani says.

Being allowed access to such large data sets led the researchers to novel, possibly groundbreaking, discoveries about the best ways to incorporate behavioral changes into models of disease progression, Vespignani says.

“We are really moving the frontier of epidemic and outbreak analytics and forecasting to the next level,” he says.

“All the data accumulated in the past few years and the knowledge is creating an understanding that hopefully will put us in a different place the next time we have to manage an infectious disease threat.”

The study in PNAS looked at three different behavioral models — one data-driven and two mechanistic — across nine geographic areas during the first wave of COVID to evaluate how well they were able to capture the interplay between disease transmission and behavior.

The mechanistic model, which describes the mechanism of behavioral changes,  outperformed the data-driven model, which employs machine learning to find patterns, in coming up with both a short-term forecast and retrospective analysis, Vespignani says.

“In a sense that was a bit of a surprise,” given scientists’ traditional preference for data modeling, he says.

A major advantage of mechanistic models is how they took into consideration that individuals exposed to the news of the pandemic started to change their behavior even before mandates were established, Vespignani says.

And risk aversion grew as COVID spread and more people were infected.

PA Media

A plane which was due to travel from the UK to Turkey had to turn back after a bird strike.

The EasyJet flight from Liverpool to Bodrum “performed a routine landing” shortly after it took off at 16:15 BST and the flight was delayed, the airline said.

A spokeswoman said: “The pilot returned to Liverpool in line with our procedures and performed a routine landing where it will be inspected by engineers.”

She said the safety of passengers and crew was EasyJet’s “highest priority”.

BBC

Nick Cosgriff

Network Rail

Microsoft said Wednesday that it will lay off about 9,000 employees. The move will affect less than 4% of its global workforce across different teams, geographies and levels of experience, a person familiar with the matter told CNBC.

The announcement comes on the second day of Microsoft’s 2026 fiscal year. Executives at the Redmond, Washington-based company typically unveil reorganizations at the time of the new fiscal year.

“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said in an email.

Microsoft has held several rounds of layoffs already this calendar year. In January, it cut less than 1% of headcount based on performance. The 50-year-old software company slashed more than 6,000 jobs in May and then at least 300 more in June. As of June 2024 it employed 228,000 people. In 2023, it laid off 10,000.

Perhaps the largest culling of Microsoft workers came in 2014, when the company eliminated 18,000 after acquiring Nokia’s devices and services business.

As was the case with the May layoffs, Microsoft is looking to reduce the number of layers of managers that stand between individual contributors and top executives, said the person who asked not to be named while discussing internal matters.

“To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness,” Phil Spencer, Microsoft’s CEO of gaming, wrote in a Wednesday memo to employees in that division.

Microsoft reported nearly $26 billion in net income on $70 billion in revenue for the March quarter. The numbers were well ahead of Wall Street’s consensus, keeping Microsoft ranked as one of the most profitable companies in the S&P 500 index, according to data compiled by FactSet.

Executives called for about 14% year-over-year revenue growth in the June quarter, thanks to expected expansion in Azure cloud services and corporate productivity software subscriptions

Microsoft stock closed at a record high of $497.45 per share on June 26. At the start of Wednesday’s trading session, the shares were down about 0.6%, while the S&P 500 was roughly flat.

Autodesk, Chegg and CrowdStrike are among the other software providers that have slimmed down in 2025. Earlier on Wednesday, payroll processing company ADP said the U.S. private sector lost 33,000 jobs in June. Economists polled by Dow Jones had predicted an increase of 100,000.

Private sector hiring unexpectedly contracted in June, payrolls processing firm ADP said Wednesday, in a possible sign that the economy may not be as sturdy as investors believe as they bid the S&P 500 back up to record territory to end the month.

Private payrolls lost 33,000 jobs in June, the ADP report showed, the first decrease since March 2023. Economists polled by Dow Jones forecast an increase of 100,000 for the month. The May job growth figure was revised even lower to just 29,000 jobs added from 37,000.

“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” Nela Richardson, ADP’s chief economist, said in a press release published Wednesday morning.

To be sure, the ADP report has a spotty track record on predicting the subsequent government jobs report, which investors tend to weigh more heavily. May’s soft ADP data ended up differing significantly from the monthly jobs report figures that came later in the week.

This week, the government’s nonfarm payrolls report will be out on Thursday with economists expecting a healthy 110,000 increase for June, per Dow Jones estimates. Economists are expecting the unemployment rate to tick higher to 4.3% from 4.2%. Some economists could revise down their jobs reports estimates following ADP’s data.

Weekly jobless claims data is also due Thursday, with economists penciling in 240,000. This string of labor stats comes during a shortened trading week, with the market closing early on Thursday and remaining dark on Friday in honor of the July Fourth holiday.

Service roles hit hardest

The bulk of job losses came in service roles tied to professional and business services and health and education, according to ADP. Professional/business services notched a decline of 56,000, while health/education saw a net loss of 52,000.

Financial activity roles also contributed to the month’s decline with a drop of 14,000 on balance.

But the contraction was capped by payroll expansions in goods-producing roles across industries such as manufacturing and mining. All together, goods-producing positions grew by 32,000 in the month, while payrolls for service roles overall fell by 66,000.

The Midwest and Western U.S. saw the strongest contractions in June, declining by 24,000 and 20,000, respectively. Meanwhile, the Northeast shed 3,000 roles. The Southern U.S. was the sole region tracked by the ADP to see payrolls expand on net in the month, recording an increase of 13,000 positions.

The smallest firms tended to see more job losses in the month than their larger counterparts. In fact, businesses with more than 500 employees saw the biggest payroll growth in the month with an increase of 30,000, per ADP. By comparison, businesses with fewer than 20 employees accounted for 29,000 lost roles on net.

Annual income growth decreased modestly from May for both job stayers and hoppers. The rate of pay increase for those staying in their jobs ticked down to 4.4% from 4.5%, while those getting new roles slid to 6.8% from 7%.

The S&P 500 is up more than 4% for the year, posting a stunning comeback in the second quarter after worries about President Donald Trump’s tariff fights nearly sent the benchmark into a bear market.