A top securities regulator warned about the surge in fundraising by blank-check companies, The Wall Steet Journal reports.
Speaking at a legal conference, SEC official John Coates said there are “some significant and yet undiscovered issues” with SPACs, which allow private companies to go public with a structure that offers outsize potential rewards to backers while bypassing some safeguards of a traditional initial public offering.
Those issues are “not something that’s going to stop them by any means, but they are relatively as yet incompletely worked through mechanisms, despite the fact they have been around for a while,” said Coates, who is acting director of the SEC’s Corporation Finance division. Read more.
