SPACs are Not Investment Companies: White & Case

Attorneys with White & Case jumped into the fray over recent lawsuits against SPACs, notably Bill Ackman’s Pershing Square Tontine Holdings. A former SEC commissioner and a Yales law professor are suing several SPACs, including Ackman’s, alleging his operates as an illegal investmnet company.

Not so, argue the White & Case attorneys in this article posted on the firm’s website. Moreover, they say the suits against the SPACs are unlikely to succeed.

Given that a SPAC’s primary business purpose is not investing, reinvesting or trading in securities, a SPAC is not an “orthodox” or “typical” investment company that falls within the scope of Section 3(a)(1)(A) of the ICA, they write. Read more..

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