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SEC Division of Corporation Finance Acting Chair John Coates and
SEC Acting Chief Accountant Paul Munter (the officials )
highlighted certain considerations in
accounting for warrants issued by Special Purpose Acquisition
Companies ( SPACs ). In a public statement, the SEC
Division of Corporation Finance and the Office of the Chief
Accountant staff ( staff ) reviewed the potential
accounting implications and the financial reporting
considerations that apply if a registrant and its auditors
determine there is an error in any previously-filed financial
statements. The staff determined that there were
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SEC Division of Corporation Finance Acting Director John Coates
argued against claims by some practitioners
and commentators that Special Purpose Acquisition Companies
( SPACs ) may face lesser securities law liability in the
context of a de-SPAC transaction than traditional IPOs.
Mr. Coates asserted that the liability risks associated with
disclosures in the de-SPAC transaction (
i.e.,
the second stage business combination transaction in which SPACs
issue equity to target owners) could in some ways be higher than in
conventional IPOs due to the potential conflicts of interest in the