The well-documented wave of SPACs that lasted throughout 2020 and the first quarter of 2021 has started to show the first signs of retreat, write lawyers for Quinn, Emanuel, Urquhart and Sullivan in an analysis for JD Supra. Two major statements from SEC officials in the past couple of months may be contributing to the slow-down.
New accounting for warrants is only part of the reason for concern, they write.
The reason for the divergence between SPACs and traditional IPOs lies in the 1995 Private Securities Litigation Reform Act (“PSLRA”). The PSLRA enacted certain restrictions on private litigation under the securities laws. One such restriction is for private litigation concerning “forward-looking statements.” Read more.