New rules on the horizon for SPACs (Law360)

The SEC is working on rule proposals focused on special purpose acquisition companies (SPACs) that will require greater disclosures and transparency for investors. Amy Lynch, FrontLine’s Founder and President, explains that the SEC is honing in on areas where retail investors may be disadvantaged in these transactions versus institutional investors. Ms. Lynch describes areas of particular concern for the SEC, including the dilution of the acquired company’s stock that may occur from equity awarded the SPAC founders and warrants issued to early SPAC investors. Firmer rules on disclosures would be a way for the SEC to address this, she further states, as well as potential conflicts of interest present in SPAC mergers, so that they are made clearer to investors. See Law360 (subscription required), “4 Points to Watch As Regulators Revamp SPAC Rules“