The Securities and Exchange Commission has been casting a wary eye in the direction of the blank-check company boom for some time now. But aside from acknowledging that, yes, there do seem to be a lot of these things floating around; issuing the always sage advice not to go into business with Charlie Sheen; asking some uncomfortable questions; listening to Andrew Ross Sorkin’s ideas; going on a sit-down strike to slow the flow of new SPACs; thinking carefully about things; and imposing some bookkeeping requirements; it hasn’t really done much of anything.

Now, it has, bringing what might well be the first enforcement action of the current SPAC era. In choosing their first target, Gary Gensler & co. certainly had a lot of options. The SPAC that sort of merged with itself? Not juicy enough. The electric truck debacle? Nope (or, at least, not yet). Any one of the seemingly countless deals between desperate SPACs and thirsty blockchain operations? Not good enough. Bill Ackman’s SPAC that became a not-SPAC because his eyes were bigger than his tummy? Not even that. No, for its first foray into battle with the IPO slayers, the SEC went with the combination of SPACs and another of our time’s greatest scams: space.

The Securities and Exchange Commission said on Tuesday that it had reached a civil settlement with several parties involved in the planned merger of Momentus, a company that said it had developed a unique propulsion technology, and Stable Road Acquisition, a special purpose acquisition company.

Investors were misled into believing the propulsion system had been successfully tested in space, when the test had failed, regulators said…. “The fact that Momentus lied to Stable Road does not absolve Stable Road of its failure to undertake adequate due diligence to protect shareholders,” Mr. Gensler said.

Securities regulators also said the companies, which are just a month away from a shareholder vote on the planned $566 million merger, had concealed critical “national security risks” concerning Momentus’s founder and former chief executive officer, Mikhail Kokorich.

Technology that doesn’t work and a possible Russian agent at the helm? No wonder they went with this over Lordstown. Good luck with that vote, guys!

S.E.C. Says a SPAC Misled Investors About Its Space Deal [NYT]

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