Investing
SEC to Wall Street: SPACs Aren’t a Way Around Securities Laws
- Top agency official says risks must be disclosed to investors
- Claim of less legal liability than IPOs ‘uncertain at best’
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The U.S. Securities and Exchange Commission has a fresh warning for the booming SPAC market: Blank-check companies aren’t an end-around to avoid disclosing key information to investors.
In a Thursday statement, a top SEC official made clear that despite their unique structure, special purpose acquisition companies are covered by federal securities rules. Claims that promoters face less legal liability than a traditional public offering are “uncertain at best,” said John Coates, the acting director of the agency’s corporation finance division.