Despite the frothy market for special purpose acquisition companies (spacs) in 2021, companies considering such a transaction have been met recently with significant market headwinds, a short supply of suitable targets, the onset of a highly anticipated SEC rule and, in recent weeks, new sec enforcement actions targeting alleged investment adviser disclosure failures involving alleged conflicts of interest. When considering these cases along with a recent Wall Street Journal article highlighting the billions of dollars that SPAC founders and insiders reaped from de-spac transactions before share prices of the new public companies collapsed, rough waters may still lie ahead for SPAC participants.
Source: SEC Continues SPAC Crackdown as Founder Trading Profits Generate Scrutiny