Former SEC Commissioner and Yale Law Professor Try to Outflank SPACs
Last week, Pershing Square Tontine Holdings (NYSE: PSTH) was hit with a lawsuit from former SEC commissioner Robert Jackson and Yale law professor John Morley, claiming that PSTH violated the Investment Company Act of 1940. To which, Bill Ackman punched back by posting a letter to the PSTH website disputing the claims as well as proposing a solution for investors via his SPARC structure.
However, it appears that Jackson and Morley have decided to counter-punch by filing two more suits against GO Acquisition Corp. (NYSE: GOAC) and E.Merge Technology Acquisition Corp. (Nasdaq: ETAC), both claiming once again that the SPACs violated the Investment Company Act of 1940. This is despite law professors stating in the media that they thought this was an unlikely winnable strategy.
Interestingly, of the current 438 SPACs currently out searching for targets that they could have chosen to sue, Jackson and Morley have selected two more SPACs for litigation that have less than a year left on their clock. Specifically, 11.4 and 11.3 months, for GOAC and ETAC, respectively.
Furthermore, GOAC was underwritten by Credit Suisse, Citigroup and Morgan Stanley as joint-bookrunners, while ETAC was underwritten by Cantor Fitzgerald and Mizuho. All five of these banks (to a lesser extent Mizuho, being newer to the SPAC space) are powerhouses in underwriting SPAC deals.
If you’re going to pile on SPAC suits, these seem awfully convenient targets with convenient timelines, particularly if the strategy is to tie up higher-profile deals (with leading underwriters) in the court system. However, the additional suits do indicate that Jackson and Morley are not going to throw all their cards in with just Ackman. After all, Ackman is an activist investor and enjoys a good battle. Plus, he’s proven himself willing to fight endlessly to prove a point (see: Herbalife). Instead, the additional lawsuits appear to be a means to hedge their bets. You just need to win one case.
The question is, how will SPACs fight back?
Lightwave Acquisition Corp. (NASDAQ:LWACU) announced the pricing of its $187.5 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “LWACU”, Wednesday, June 25, 2025. The new SPAC plans to combine with a technology target or another industry that complements its management team’s background. Lightwave’s management team is led...
Oxley Bridge Acquisition Limited (NASDAQ:OBAU) announced the pricing of its $220 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “OBAWU”, Wednesday, June 25, 2025. The Company’s primary focus will be to search globally for a target with operations or prospects focusing on global consumer and technology sectors...
At the SPAC of Dawn The SPAC market has been feeling considerable wind under its sails since the cycle reset last summer, but that does not mean it is smooth sailing for all portions of the process. All three SPACs that held votes yesterday wound up adjourning or postponing them, suggesting that getting through a...
Columbus Circle I (NASDAQ:CCCM) has entered into a definitive agreement to combine with ProCap Financial as part of a raise of about $1 billion in capital for the target company. ProCap aims to build a Bitcoin treasury that will eventually provide the backing for a financial institution providing investment banking services. The combined company is...
At the SPAC of Dawn SPACs have a busy week of votes ahead of them with six special meetings to approve extensions and three to complete business combinations. JVSPAC (NASDAQ:JVSA) is set to kick off the run of deal votes tomorrow as it seeks approval to tie things up with Southeast Asian hospitality chain Hotel101....