New SEC Proposal Takes On SPACs

Yesterday, the SEC voted, three to one, to propose new rules and amendments regarding SPACs, shell companies, the use of projections in SEC filings and a rule addressing the status of SPACs under the Investment Company Act of 1940. The proposal arrives in the context of calls from various corners, including from SEC Chair Gary Gensler and former Acting Corp Fin Director John Coates, to treat SPACs as an alternative method of conducting an IPO under the SEC's policy framework.  (See this PubCo post, this PubCo post and this PubCo post.)  And let's not forget the extensive recommendations from the SEC's Investor Advisory Committee addressing SPAC regulatory and investor protection issues that have been under scrutiny. (See this PubCo post.)  These investor protection concerns were exacerbated as a result of the proliferation of SPACs in 2020 and 2021-raising $83 billion in 2020 and $160 billion in 2021 and, in those same two years, constituting more than half of all