Deals
SPACs Face Fresh SEC Legal Threat for Overly Bullish Forecasts
- Agency said to clarify investor legal protections in new plan
- SPAC regulations to be proposed this week, people say
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SPAC sponsors who embellish projections about the companies they plan to take public face a new threat in a plan from the U.S. Securities and Exchange Commission.
Wall Street’s main regulator will propose curbing the legal protections that some blank-check companies have relied on to make bullish forward-looking statements about the firms they plan to merge with, according to people familiar with the matter who requested anonymity because the plan is not yet public. The regulation, set to be released on Wednesday as part of a broader set of SPAC rules, would clarify that investors can sue over inaccurate special purpose acquisition company forecasts.