SPAC Suits Double as Other Shareholder Class Actions Plunge
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Class-action lawsuits against blank-check companies surged in the first half of the year, even as the number of overall shareholder cases alleging securities law violations plunged, according to a new report.
Federal suits against blank-check companies -- also known as SPACs, or special purpose acquisition companies -- have continued to pile up, with 14 such filings in the first half, compared to seven in all of 2020 and six in 2019, according to an analysis by Cornerstone Research and Stanford Law School’s Securities Class Action Clearinghouse released Wednesday. More than half of the 14 suits alleged that targets of the firms defrauded investors by overstating the viability of their products, according to the report.