On Friday, August 27, Sidley Austin LLP, together with other leading U.S. law firms, issued a joint statement in response to recent lawsuits filed against a number of special purpose acquisition companies (SPACs) alleging that SPACs are investment companies within the meaning of the Investment Company Act of 1940 (the 1940 Act) and are therefore in violation of certain provisions of the 1940 Act.
The statement challenges the position taken in these lawsuits, consistent with longstanding interpretations of the 1940 Act, which such interpretations are reflected in over 1,000 SPAC IPOs that have been reviewed by the SEC staff as of the date of the statement.
An excerpt of, and a link to, the statement are below:
“The undersigned law firms view the assertion that SPACs are investment companies as without factual or legal basis and believe that a SPAC is not an investment company under the 1940 Act if it (i) follows its stated business plan of seeking to identify and engage in a business combination with one or more operating companies within a specified period of time and (ii) holds short-term treasuries and qualifying money market funds in its trust account pending completion of its initial business combination.”
Read the full statement here.
Sidley Austin LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship.
Attorney Advertising - For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000.