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Proposed SEC Rules Related to SPAC IPOs and SPAC Business Combinations

Expanded Liability and Disclosure Requirements, Projections, Fairness, and Investment Company Act Safe Harbor

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Wednesday, July 13, 2022

Recorded event now available

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This CLE course will examine recently proposed SEC rules affecting special purpose acquisition companies (SPACs), with an emphasis on the proposed rules that would have the most impact on SPAC IPOs and de-SPAC transactions. The panel will discuss the SEC's rationale for certain of the proposed changes, as well as their potential implications for SPAC sponsors and de-SPAC transactions.

Description

On Mar. 30, 2022, the SEC released proposed rules related to SPACs covering a wide range of topics, including expanding underwriter liability for disclosures in connection with de-SPAC transactions, target company and officer and director liability for such disclosures, and expanding and revising disclosure requirements applicable to SPAC IPOs and de-SPAC transactions.

The proposed rules would also:

  • make SPACs ineligible for the safe harbor from liability for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995 (PSLRA);
  • mandate specific disclosures related to financial projections presented in connection with de-SPAC transactions;
  • require disclosure as to whether a SPAC reasonably believes that a de-SPAC transaction and any related financing are fair or unfair to unaffiliated security holders of the SPAC; and
  • establish a safe harbor from Investment Company Act status for SPACs so long as certain conditions are met.

The proposed rules would also make certain technical changes, which should not substantively change the way SPACs, target companies, and other SPAC market participants operate; and conforming changes, where the SEC is proposing to codify its existing positions or guidance or codify what is existing practice by market participants.

Listen as our authoritative panel discusses these and other significant changes to the securities laws affecting SPAC offerings and mergers.

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Outline

  1. The current regulatory landscape and liability regime applicable to de-SPAC transactions
    1. Existing SEC positions and market practice
    2. Notable litigation and enforcement actions
  2. New proposed rules for SPACs
    1. Underwriter liability for disclosures in connection with de-SPAC transactions
    2. Target company and officer and director liability for disclosures in connection with de-SPAC transactions
    3. Enhanced disclosure requirements: conflicts of interest, fairness, dilution, and redemption
    4. Proposed disclosure requirements related to financial projections
    5. Proposed fairness disclosure
    6. Proposed safe harbor from Investment Company Act status for SPACs

Benefits

The panel will review these and other important topics:

  • How would the proposed expansion of underwriter liability for disclosures in connection with de-SPAC transactions impact SPACs, SPAC IPOs, and de-SPAC transactions?
  • What steps should parties to a de-SPAC transaction take in light of the SEC's proposal to make SPACs ineligible for the safe harbor from liability for forward-looking statements provided by the PSLRA?
  • What are the enhanced disclosure requirements that the SEC has proposed that would apply to financial projections presented in connection with de-SPAC transactions?
  • What are the implications of the proposed requirement to disclose whether a SPAC reasonably believes that a de-SPAC transaction and any related financing are fair or unfair to unaffiliated security holders of the SPAC?
  • What are the conditions of the proposed safe harbor from investment company act status for SPACs?

Faculty

Donikyan, Tamar
Tamar Donikyan

Partner
Kirkland & Ellis

Ms. Donikyan represents public and private companies in a range of corporate and securities matters, including initial...  |  Read More

Nussbaum, Mitchell
Mitchell S. Nussbaum

Co-Chair, Loeb & Loeb LLP
Loeb & Loeb

Mr. Nussbaum’s practice focuses on representing emerging growth companies and investment banks in initial public...  |  Read More

Swartz, Zach
Zach Swartz

Partner
Vinson & Elkins

Mr. Swartz’ principal areas of practice are capital markets and securities law, private equity, fund and joint...  |  Read More

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