SEC to Wall Street: SPACs Aren’t a Way Around Securities Laws

The U.S. Securities and Exchange Commission has a fresh warning for the booming SPAC market: Blank-check companies aren’t an end-around to avoid disclosing key information to investors.

In a Thursday statement, a top SEC official made clear that despite their unique structure, special purpose acquisition companies are covered by federal securities rules. Claims that promoters face less legal liability than a traditional public offering are “uncertain at best,” said John Coates, the acting director of the agency’s corporation finance division.

SPACs list on public stock exchanges to raise money for the purpose of buying other companies. For months, the ...