Securities Fraud and Mismanagement

Attorney and Counselor at Law

303-300-5022 / 844-253-5858 Toll Free

Did the actions/inactions of my broker fall below the required standard of care?

We’ll tell you, for FREE.

SPACs are inherently unsafe.  The SPAC crave has been pushed on to even most conservative investors.  Individuals suffering losses in SPACs who thought they were getting moderate or low risk investments should call 303-300-5022 for a free and confidential consultation about their options to recover losses.

There has been a groundswell of SPACs since 2019.  The substantial trend has caught the attention of FINRA, the Financial Industry Regulatory Authority.  FINRA has begun to target the sale of SPACs with its exams.

In 2019 there were approximately 50 SPACs.  Next year there are anticipated to be over 500 SPACs.

FINRASPACs are shell companies created to acquire unknown private-equity companies.  These entities essentially circumvent the diligence of companies going public by denying analysis of the underlying assets.  The investments create the risk of investing in a private-equity company without the safeguards created to protect average investors from the owning of private-equity companies.

These entities are often referred to as “blank check” companies.   They raise money without ever identifying where the funds will be invested.  This allows it to go public without the scrutiny of underlying assets that is given to a normal IPO.  This saves costs to the SPAC, but these costs are there for a reason.

Reasonable due diligence of an investment involves the analysis of the underlying assets.  This helps identify what the ultimate value of the investment will be and whether the investment is even a legitimate investment.  This safeguard is missing from an SPAC.

Regulators don’t want to get caught flat-footed on the SPAC boom the way they were during the dotcom surge.  FINRA knows that these investments are high-risk and unsuitable for your average investor saving for retirement.  For some investors, it may be too late.