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No ‘Free Pass’ For Popular SPACs

US securities regulators have warned that architects of the increasingly popular method of exposing businesses will not be able to get a “free pass” if they mislead investors.

The Securities and Exchange Commission (SEC), which is considering a large number of deals involving special-purpose acquisition companies (SPACs), has scrutinized the deals for concerns such as “unfounded hype” and celebrity sponsorship. I issued a command to be there.

Trading began last year and market participants have stated that it runs faster than traditional sales known as initial public offerings or IPOs.

SPACs are also gaining momentum from relationships with celebrities such as basketball star Shaquille O’Neal and former Trump White House economic adviser Larry Kudlow.

“The staff reviews these filings, seeks clearer disclosure and provides guidance to registrants and the general public,” said John Coates, acting director of the SEC’s corporate finance department. I will.

Authorities have dismissed some commentators’ allegations that SPACs have less legal liability than traditional initial public offerings (IPOs).





U.S. securities regulators have indicated that they are scrutinizing mergers involving special acquisition companies
AFP / SAUL LOEB

“De-SPAC transactions are subject to both securities and exchange laws, so they do not give anyone a free pass for material misstatement or omissions and may result in liability under state law.” Said the agency.

Last month, the SEC clearly warned investors about supporting SPACs solely because of celebrity support, saying that “someone famous sponsored or invested in SPACs, or said it was a good investment.” That said, investing in an SPAC is by no means a good idea. “

The agency has also cracked down on bursts of transactions involving cryptocurrencies that have been touted by celebrities in recent years, trying to circumvent securities rules by investing in new companies or pretending to be “early coin offerings.”

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