As the use of SPACs has exploded in recent years the securities litigation has followed: between Jan. 30, 2019 and Feb. 22, 2022, securities plaintiffs filed a total of 51 SPAC-Related Securities Class Actions, Kennedys writes in JD Supra. There have been a total of 38 SPAC-related lawsuits filed since January 1, 2021, with now at least 7 SPAC-related lawsuits filed in 2022.
Plaintiffs in SPAC cases often rely on short seller reports resulting in a stock drop. While some investors will fly under the radar and try to quietly hold these “bet to fail” positions, others actively seek to talk down the price of the securities that they are shorting by publicizing research reports. Read more.
