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Acting Director of the Securities and Exchange Commission s
Division of Corporation Finance, John Coates, provided additional
comments on SPACs on April 8, 2021. Acting Director Coates
noted the unprecedented surge in SPAC activity.
He focused his comments on the legal liability that attaches
to disclosures made in connection with the de-SPAC transaction and,
in particular, to claims that he says have been made by practitioners and commentators that an advantage
of SPACs over traditional IPOs is lesser securities law liability
exposure for targets and the public company itself. In
John Coates, Acting Director of the Division of Corporation Finance at the U.S. Securities and Exchange Commission (SEC), issued a public statement providing insight into the SEC’s.
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SEC Division of Corporation Finance Acting Director John Coates participated in a fireside chat on April 7, 2021 during the annual Global Capital Markets & the US Securities Laws program hosted by the Practicing Law Institute (PLI).
Acting Director Coates, when asked about his priorities at the SEC, mentioned three items: the “unprecedented surge” in special purpose acquisition company (SPAC) filings, reporting company ESG disclosures (including disclosure of climate change and potentially political spending), and improvement of the proxy voting system (commonly referred to as “proxy plumbing”).
With respect to ESG issues on a global scale, Acting Director Coates provided insight into the International Organization of Securities Commissions’ recent statement announcing the creation of a Technical Expert Group co-led by the SEC to undertake an assessment of the recommendations to be developed as part of the IFRS
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Since issuing disclosure guidance in 2010 (“Commission Guidance Regarding Disclosure Related to Climate Change,”) the SEC has been expecting public companies to address climate change in their SEC filings, but the resulting disclosures have been disappointing to certain constituencies, including institutional investors, certain members of Congress,1 and the Democratic appointees to the Commission. In an unsurprising move, Acting Chair Allison Lee2announced Wednesday that she was directing the Division of Corporation Finance to enhance its focus on climate-related disclosure in public company filings.3 As a result, public companies, at a minimum, should expect their climate change disclosures, or lack thereof, to be scrutinized in 2021 as part of this targeted review in the form of comment letters from the Division’s Staff. It remains to be seen whether the ultimate product of this review will extend beyond Acting Cha