Skip to main content

Opacity is to a very large extent the whole point of a special-purpose acquisition company. It is what investors in blank-check vehicles are ultimately signing up for. The usual way of going public, via an initial public offering, is a gigantic pain-in-the-ass involving an enormous amount of disclosure for those who are so inclined to pore over and sift through before deciding whether they want a piece. This is precisely what many if not most companies merging with SPACs are trying to avoid—a fact that is, or ought to be, well known to the investor in a pre-merger SPAC, who have in effect outsourced all of that hard work to the people running the SPAC. This arrangement works pretty well for all sides until it doesn’t, and then, well, you know what happens.

Shareholder lawsuits against post-merger special purpose acquisition companies rose to 15 through the first half of 2021, tripling from just five in all of 2020, according to data from Woodruff Sawyer. The jump came even as overall securities cases fell 13% this year, according to the data.

We suppose we’re surprised it’s that only 15, given that roughly 150 SPACs have found dance partners over the last two years and there are plenty of official investigations for plaintiffs’ lawyers to draft off. We all suppose there’s not a lot of sympathy to go around here, given that this is exactly what the blank-check signers uh, signed up for.

SPAC lawsuits jump in another sign of suspect deal-making for the once red-hot space [CNBC]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.



Pay No Attention To How Much SPACs Are Padding Law Firms’ Bottom Lines

This is a matter of principle, they say without trace of irony.


You Know, Actually, SPACs Are Stupid And Bill Ackman Doesn’t Want To Run One Anyway

But he’s had a SPARC of inspiration, however many months too late.


SPACs May Be Illegal, So Make The Most Of Them While You Can

Time to cut a deal before a judge calls time on the whole party, although that’s probably not going to happen.

Bill ackman beach

SPAC Turned SPARC Turned SPAC Again Sued

Bill Ackman thought about doing something, and therefore is illegal.

(Getty Images)

Trump SPAC Player Confirms It Broke All The Rules, Wants His Money Anyway

In another world, Donald Trump would not be able to help admiring Brian Shevland, quite frankly.

Getty Images

Bill Ackman Having None Of This Cockamamie SPAC Lawsuit

Do you see any stocks in Pershing Square Tontine’s portfolio? He didn’t think so.

grumpy cat

BuzzFeed Has 77 Litigious Grumpy Cats On Its Hands

Turns out churning out polls and listicles does not equip you to sell your restricted shares ASAP.