Surge in SPAC-Related Mergers Leads to Litigation and Regulatory Risks | McDermott Will & Emery jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.
REGULATORY DEVELOPMENTS
On February 4, the SEC published a request for public comment regarding potential reform measures for money market funds, as highlighted in a recent report of the President’s Working Group on Financial Markets (PWG). The PWG report discussed the results of the PWG’s study on the effect of the COVID-19 pandemic on the short-term funding markets and, in particular, on money market funds, including the general stress experienced by prime and tax-exempt money market funds. The report concluded that the events of March 2020 show that more work is needed to reduce the risk that structural vulnerabilities in prime and tax-exempt money market funds will exacerbate or lead to stresses in short-term funding markets. The potential reform measures as outlined in the PWG report seek to: (i) address money market funds’ structural vulnerabilities that can contribute to stress in short-term funding markets; (ii) improve the resilience of money market funds and broader
To embed, copy and paste the code into your website or blog:
Despite the challenges posed by COVID-19, 2020 saw an eruption of IPOs by special purpose acquisition companies (SPACs), used to raise nearly $79 billion from investors.
The Wall Street Journal reports that the trend is continuing in 2021, already averaging five new SPACs each business day. A surge in related litigation has already begun, and it can be expected to grow and become a feature of SPAC deals throughout 2021.
SPACs are publicly traded companies created as vehicles to take promising private companies public. A SPAC offers securities for cash, and places the offering proceeds into a trust or escrow account to be used to acquire one or more operating companies. After the IPO, the SPAC generally has a limited amount of time to identify acquisition targets. SPACs sometimes are called “blank check companies” because their investors give management discretion to identify and acquire private companies after the