On March 30, 2022, the SEC voted 3-1 (Commissioner Peirce dissenting) to propose a package of rules and rule amendments governing special purpose acquisition companies (SPACs), SPAC initial public offerings (IPOs) and SPAC mergers with a target company (de-SPACs). Part of the proposed amendments would also apply to any shell company business combination, whether or not a SPAC is involved.
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Adam Brenneman
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SEC Brings SPAC Enforcement Action and Signals More to Come
Posted in Enforcement, SEC Guidance
On July 13, 2021, the Securities and Exchange Commission (“SEC”) announced a major enforcement action related to a proposed merger between a special purpose acquisition company (“SPAC”) and a privately held target company (“Target”). This followed numerous warnings by the SEC staff over several months of enhanced scrutiny of such transactions under the federal securities laws.[1] The respondents, except for the Target’s CEO, settled the action by collectively agreeing to civil penalties of approximately $8 million and to certain equitable relief described below. [2] …
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Acting Director of SEC’s Corp Fin Issues Statement on Disclosure Risks Arising from De-SPAC Transactions
Posted in SEC Guidance
Last week, John Coates, the Acting Director of the SEC’s Division of Corporation Finance (“Corp Fin”), released a statement discussing liability risks in de-SPAC transactions.
The statement focused in particular on the concern that companies may be providing overly optimistic projections in their de-SPAC disclosures, in part based on the assumption that such disclosures are protected by a statutory safe harbor for forward-looking statements (which is not available for traditional IPOs). Director Coates’s statement questions whether that assumption is correct, arguing that de-SPAC transactions may be considered IPOs for the purposes of the statute (and thus fall outside the protection offered by the statutory safe harbor). He therefore encourages SPACs to exercise caution in disclosing projections, including by not withholding unfavorable projections while disclosing more favorable projections.
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SPAC Sponsors Beware: The Rising Threat of Securities Liability
By Nick Grabar, Adam Brenneman & Jared Gerber on
Special purpose acquisition companies or “SPACs” are an increasingly popular way for an existing private company to become publicly traded without undergoing a traditional initial public offering, and for investors in public markets to invest in growth-stage companies. There can be generous returns for SPAC sponsors, but they should be aware of the liability risk…
Highlights from the 2015 M&A in Latin America IBA Conference: Shareholder Activism Today – New Challenges in Latin America Deals
Posted in Cleary Events, Shareholder Activism
Over 500 M&A practitioners attended the Annual Mergers and Acquisitions in Latin America conference that was held on March 11-13 in Panama City. The conference was co-presented by the International Bar Association Latin American Regional Forum and the International Bar Association Corporate and M&A Law Committee. The event attracted lawyers from Latin America, the Caribbean and the U.S. who participated in more than 10 sessions covering diverse subjects of interest for M&A practitioners and business professionals interested in the region.
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