BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Law firm group pushes back on lawsuits calling for SPAC regulation


(Reuters) — The legal tussle around special purpose acquisition companies intensified Friday as a group of U.S. law firms hit out against lawsuits last week that called for blank-check firms to be regulated as investment companies.

SPACs are acquisition vehicles that use IPO capital to take a private company public and can make investments and sell stock without restrictions before such a merger.

Any company “that temporarily holds short-term treasuries and qualifying money market funds while ... seeking a business combination with one or more operating companies is not an investment company under the 1940 Act,” a group of 49 law firms said in a joint statement Friday.

Earlier this month, Bill Ackman's blank-check firm was sued by an investor who alleged Pershing Square Tontine Holdings Ltd. had improperly invested in securities, and that it should be regulated under the Investment Company Act of 1940.

Reuters reported Thursday that the same lawyers who targeted Mr. Ackman could bring up to 50 new lawsuits against other SPACs.

Mr. Ackman last week called the lawsuit meritless but conceded it was unlikely to be resolved soon and could also dissuade potential merger partners. His Pershing Square Tontine Holdings is the biggest SPAC ever, having raised $4 billion last year.

The billionaire investor said he planned to give Tontine shareholders warrants in a “better-structured vehicle,” which he called a special purpose acquisition rights company.  

Activity in the blank-check space has recently waned from last year's boom due to heightened scrutiny from the U.S. Securities and Exchange Commission and souring of investor sentiment.




Read Next

  • SEC focuses on bank fee conflicts, steps up SPAC inquiry

    (Reuters) — The U.S. securities regulator has ramped up its inquiry on Wall Street’s blank check acquisition frenzy, homing in on potential conflicts of interest created when banks act as underwriters and advisers on the same deal, three people with direct knowledge of the matter told Reuters.