We all recall the game Whack-a-Mole.  That is what is happening to the SPAC marketplace.  Aside from questions in the marketplace as to the advisability of using this model as an investment vehicle or a method of going public, seems the SEC is focusing on significant disclosure issues.

In December, the SEC noted the possible conflicts of interest between public investors and those persons active in the formation or management of a SPAC; the SEC cannot bar the typical model of SPAC formation, but it sure can make SPACs provide sharp focus on what the SEC sees as excessive promoter profit and thus investor risk.

SPACs sometimes are promoted by celebrity endorsements or clients.  In March the SEC warned investors (in a formal “Alert”)  that a famous name does not a good investment make.

Last month the Acting Director of SEC Corp Fin took a swipe at the common perception that “going public” through a SPAC was easier than a regular IPO, by announcing that the Commission would treat SPAC acquisitions the same way as IPOs, subject to the “full panoply” of applicable law.

It is unclear if the current SPAC fever will abate; much can be said in favor of the model, affording curated investment opportunities to the retail investor and liquidity in the marketplace, as well as enforced guidance to emerging entities in complying with the world of Regulation that comes with a public market security.  But however intense the SPAC market becomes, it is not going away; and, apparently, neither is the SEC.