SPAC Market in Limbo: Takeaways from the Annual SPAC Conference
By Yelena Dunaevsky, Esq., Woodruff Sawyer
About 600 SPAC market participants came together June 15–16 to discuss latest developments, trends, worries, and innovations at the annual SPAC Conference organized by DealFlow Events.
The following topics dominated individual and panel discussions throughout the two-day event. Here are my observations.
Proposed SEC Rules Outrage and Disappoint
Both Doug Ellenoff and Mitch Nussbaum gave impassioned speeches on how the new rules seem to be aimed at not so much improving US capital formation as driving the SPAC vehicle out of existence.
Both experts agreed that the SEC seems to be motivated more by political agenda rather than a desire to create a safe and attractive environment for investors.
There were few objections to the SEC’s aims of creating additional disclosure rules for SPACs. However, the consensus from multiple attorneys and others in attendance was that the rules as proposed overreached on the Securities Act liability to be imposed on advisors.
The SEC’s push towards market-wide fairness opinions was also seen as an expensive extra step, the costs of which will be borne by investors.
Many participants noted that they thought the SEC was attempting to pass judgment on whether SPAC-driven deals are good or bad and to dictate how individuals should be making their investments. It was a common refrain that making these kinds of judgments is outside of SEC’s mandate to facilitate the operation of capital markets.
Most participants predicted that the rules would be finalized in October or November of 2022.