Skip to main content

The special-purpose acquisition company is already on life support: Their numbers dwindling, their suitors fleeing, their supposed beneficiaries suing, their appeal genrally fading. Given the sorry state of the blank-check industry, perhaps it’s for the best that Gary Gensler is taking some time out of his busy schedule to make good on his promise and just put it out of its misery.

The Securities and Exchange Commission advanced a set of rules Wednesday that, if implemented, would make it harder for SPACs to raise money from investors and execute mergers. Its goal is to force the vehicles to meet similar regulatory standards as initial public offerings, though critics accused the agency of aiming to end their use altogether…. “They have on average been pretty costly and not performed up to the marketing,” Mr. Gensler, who was appointed by President Biden, told reporters Wednesday. “There’s an awful lot of fees in here for the sponsors. There’s an awful lot of fees for bankers and lawyers as well.”

We’re sorry, SPAC stans, but he noticed.

Under the proposal the SEC is considering, blank-check companies would have to disclose information about their sponsors’ compensation as well as the dilution that shareholders might suffer if an acquisition is completed…. Companies acquired by SPACs, as well as their officers and directors, would become liable for misrepresentations or omissions in the merger documents that SPACs file with the SEC…. SPACs and their buyout targets would be required to disseminate the required information disclosures to investors at least 20 days before any vote by shareholders on whether to approve an acquisition.

The proposal would also tighten rules around the forward-looking projections that SPACs are currently allowed to tout without running afoul of the SEC, to address concern that the entities often woo investors with unrealistic growth forecasts.

In other words, literally everything that makes a SPAC worth pursuing. As the lone Republican left on the SEC complained, “The typical SPAC would not meet the proposal’s parameters without significant changes to its operations, economics and timeline.” Uh, Hester, aren’t you opposed to it?

SEC Proposes New Disclosure Requirements for SPACs [WSJ]

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.


By US government [Public domain], via Wikimedia Commons

SEC To Make SPACs More Like IPOs, Thus Obviating The Need For SPACs

The need for reform of which is apparently the post-presidential project of one Donald J. Trump.


Gary Gensler To Do More In First Months Than Jay Clayton Did In Four Years

The little regulator that could has 10b5-1 plans, SPACs, Twitter, accounting and chief compliance officers in his sights.

By US government [Public domain], via Wikimedia Commons

Gary Gensler, His Slide Rule Are Coming For Your Bonuses

If companies can’t do math properly, the SEC will do it for them.


Will There Be Anything Left For Gary Gensler To Do At The SEC?

Interim chief Allison Herren Lee keeps taking things off his plate.


Gary Gensler Hires Gary Gensler For Job Gary Gensler’s Been Waiting Seven Years For

Looking for comment letters on undoing everything Jay Clayton did over the last four.


Space SPAC Sketchy, SEC Says

Is it important to ask whether the rockets work and the founder is a possible national security risk?