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To print this article, all you need is to be registered or login on Mondaq.com. SEC requirements on SPACs are ramping up. The last time they did so, blank-check companies languished. How will greater scrutiny this time round impact the momentum of SPACs in play and in the planning stages? The surge in today's market darling special-purpose acquisition companies (SPACs) has the SEC taking notice. On April 8, the SEC issued a public statement outlining a myriad of concerns including risks from fees, conflicts, and sponsor compensation. "With the unprecedented surge has...

What happened  In a recent client alert, we discussed the dramatic rise in offerings of special purpose acquisition companies (SPACs) and some of the attendant litigation and enforcement risks. A raft of recent public statements and actions by Securities and Exchange Commission (SEC) staff reflect the agency's enhanced scrutiny of these transactions and suggest that enforcement investigations (and ultimately actions) cannot be far behind. In late March 2021, it was reported that the SEC's Division of Enforcement had requested information from Wall Street banks regarding SPAC transactions....

To embed, copy and paste the code into your website or blog: SPACs seem to be having their moment in the financial world, especially in 2021.  In less than three months, U.S.-based SPACs have raised more money – almost $88 billion – than all SPACs combined in 2020 (which held the previous high for SPAC investment by some margin).  They have even reached a level of societal notoriety, as shown by this week’s cover of New York Magazine.  However, before SPACs and their supporters can carry this trend “to the moon,” the SEC chose this week to release two notices bringing SPAC fans b...

To print this article, all you need is to be registered or login on Mondaq.com. SPACs seem to be having their moment in the financial world, especially in 2021.  In less than three months, U.S.-based SPACs have raised more money – almost $88 billion – than all SPACs combined in 2020 (which held the previous high for SPAC investment by some margin).  They have even reached a level of societal notoriety, as shown by this week's cover of New York Magazine.  However, before SPACs and their supporters can carry this trend "to the moon," the SEC chose this week to rel...

March Madness extends into April as the Commission markedly increases its focus on SPACs. TAKEAWAYS Surprise pronouncements call into question use of the PSLRA safe harbor for projections and accounting treatment for warrants. Flurry of activity and nature of the SEC’s guidance may signal a desire to cool down the hot market for SPACs. The Securities and Exchange Commission (SEC or Commission) is raising its voice on Special Purpose Acquisition Companies (SPACs), alerting sponsors, targets, and investors to regulatory risks and raising new concerns about SPAC-related disclosures. The SEC’...