US SEC is reviewing SPAC filings, wants clearer disclosures: official by Reuters


© Reuters. FILE PHOTO: Seal of the U.S. Securities and Exchange Commission.

By Chris Prentice WASHINGTON (Reuters) – A U.S. Securities and Exchange Commission (SEC) official said Thursday the agency is reviewing filings and seeking clearer disclosures for special purpose acquisition companies (SPACs). ), and detailed concerns about fees, disputes, and sponsor compensation. Staff at the United States’ top market regulator “are reviewing these filings, seeking clearer disclosure, and providing guidance to registrants and the public,” said John Coates, acting director of the SEC’s Division of Corporate Finance, at a statement. The SEC is intensifying scrutiny of increasingly popular SPACs, shell companies that raise funds through a listing to acquire a private company for the purpose of going public. SPACs are considered an easier alternative to the traditional initial public offering, with less regulatory scrutiny. Coates detailed some of the SEC’s concerns about SPACs at an event earlier this week. The agency also warned negotiators to follow regulatory demands, and last month launched an investigation into how underwriters are managing risks. Claims that SPACs have less liability exposure are “exaggerated at best,” Coates said, a topic that has been raised by investor advocates and other critics. Participants may not have considered the legal implications of making performance projections as part of the SPAC process, Coates said. Any material misstatement is a violation of securities laws, he said. Coates raised the possibility of formal rulemaking or possible legislative reform to address the concerns, but fell short of offering formal guidance or requesting public comment on the issue.

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