(Finance) – “We are reducing our involvement in the SPAC business in response to the changed regulatory context“It is the short statement with which Goldman Sachs confirmed the press rumors that spoke of a substantial step backwards in the Special Purpose Acquisition Company business. The SPAC is an investment vehicle set up to raise capital on the market through listing on the stock exchange; the capital raised in the IPO is intended to be used for an acquisition of a target company.
The US investment bank has begun to notify sponsors of several vehicles that it will terminate its involvement in operations. In fact, a SPAC works with its consultant even after it has been listed on the stock exchange, as it is also supported in the merger operation with a target company (known as a de-SPAC transaction). Goldman Sachs has also decided to suspend the issuance of new SPACs in the US for now.
All of this is in response to the strict regulation that the Securities and Exchange Commission (SEC) is implementing. According to a SEC proposal in March, there could be a limitation of legal protections that prevent Special Purpose Acquisition Companies from being sued by investors for untrue business predictions.
“The investors deserve the protections they receive from traditional IPOswith respect to information asymmetries, fraud and conflicts, regarding disclosure, marketing practices, gatekeepers and issuers “, said a few weeks ago Gary Gensler, Chairman of the Securities and Exchange Commission, the US federal body responsible for the supervision of the stock exchange.