SEC Imposes New Rules on Blank-Check Deals
- Agency on Wednesday approved conflicts-of-interest regulations
- Firms involved in deals could face increased legal threats
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Wall Street’s main regulator tightened its oversight of blank-check companies on Wednesday with new regulations to force more disclosure, crack down on conflicts of interest and speed up the deal-making process.
After surging during the Covid-19 pandemic as an alternative to traditional initial public offerings, blank-check companies have fallen out of favor. In a move that could further reduce interest, the Securities and Exchange Commission’s new rules revoke legal protections that shielded sponsors of the deals from getting sued by investors over embellished statements. Guidance released by the agency Wednesday could also amp up pressure to finalize deals in as little as a year.