U.S. Authorities Double Down on SPAC-Related Investigations

After a banner year in 2020, 2021 has already seen a recordbreaking expansion of the use of special purpose acquisition companies (“SPACs”)—“blank check” companies that raise funds from investors and aim to take a “target” company public via a reverse merger—over 400 SPAC IPOs raising approximately $120 billion to date. As SPACs continue to draw investors and companies seeking an alternative to the traditional IPO process, U.S. authorities have made clear that SPACs’ non-traditional structures will not insulate them from regulatory enforcement, but rather may invite even more scrutiny.