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Curbs on SPACs Seen ‘Paralyzing’ Sector That’s Already Reeling

June 15, 2022, 4:34 PM

The battered blank-check industry’s premier event is buzzing with talk about how much worse things could get if regulators follow through on their plans for a crackdown.

The SPAC Conference’s opening presentation on Wednesday focused solely on proposals by the US Securities and Exchange Commission, which is concerned that investors are being misled into risky stocks that are prone to big losses. The rules would seek to make sponsors disclose more information, deter rosy projections and increase the liability of banks that help finance special-purpose acquisition companies.

Those ideas are “paralyzing” the industry, with big banks already pulling out, ...