SEC launches inquiry into SPAC IPO frenzy - reports

Letter sent to Wall Street banks

Anna Fedorova
clock • 2 min read

The US Securities and Exchange Commission (SEC) has opened an investigation into the frenzy of special purpose acquisition companies (SPACs) IPOs on Wall Street, amid concerns about the risks involved.

According to an exclusive report by Reuters, which quotes four people familiar with the situation, the US regulator has written letters to Wall Street banks requesting information on how they are managing the risks associated with these "blank cheque" vehicles. SPACs are listed shell companies which raise funds to acquire private companies with the intention of bringing them to the public market, thereby bypassing the traditional IPO route. Reuters reports that at this stage, the SEC is asking for information to be provided voluntarily and it is therefore not an official investigation...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Regulation

Industry questions where the blame lies for Woodford liquidity issues

Industry questions where the blame lies for Woodford liquidity issues

Reaction to FCA warning notice

Cristian Angeloni
clock 11 April 2024 • 3 min read
FCA to allow 'bundling' of investment research payments in regime overhaul

FCA to allow 'bundling' of investment research payments in regime overhaul

Response to Independent Research Review

Valeria Martinez
clock 10 April 2024 • 2 min read
FCA lays out 2024/25 fees and levies proposals with £755m planned spend

FCA lays out 2024/25 fees and levies proposals with £755m planned spend

To cover budget increase

Hope Coumbe
clock 09 April 2024 • 4 min read
Trustpilot