The SEC is considering new guidance to rein in growth projections made by listed blank-check companies, and clarify when they qualify for certain legal protections, Reuters reports, citing three people with knowledge of the discussions.
The previously unreported measures being weighed by SEC staff would escalate the regulator’s crackdown on the deal frenzy in SPACs, which it worries is putting investors at risk.
The SPAC market had already started to lose steam after the SEC earlier this month suggested warrants issued by SPACs should be accounted for as liabilities instead of equity instruments, and the potential new guidance could compound that slowdown. Read more.
