Despite the frothy market for special purpose acquisition companies (SPACs) in 2021, companies considering such a transaction have been met recently with significant market headwinds, a short supply of suitable targets, the onset of a highly anticipated SEC rule and, in recent weeks, new SEC enforcement actions targeting alleged investment adviser disclosure failures involving alleged conflicts of interest. When considering these cases along with a recent Wall Street Journal article highlighting the billions of dollars that SPAC founders and insiders reaped from de-SPAC transactions before share prices of the new public companies collapsed, rough waters may still lie ahead for SPAC participants.
Holland & Knight provides an overview of one of the SEC’s enforcement actions and additional color on the magnitude of SPAC founder share trading, while offering some key takeaways. Read more.
