“FINRA Targets SPACs in Latest Exam Sweep”

According to a recent article published by Investment News, SPACs are being targeted by FINRA in the latest exam sweep. In recent months, SPACs have become a popular structure in the securities industry, both for investors and the SEC/FINRA. Todd Kulkin is a Partner at Warren Law Group and handles capital raises. He explains that “SPACs are a viable alternative to a Regulation D raise, which isn’t available for “blank check” companies, and this structure takes advantage of the liquidity and ease of exit using the public market.” Jon-Jorge Aras, another partner at Warren Law Group who practices in securities regulatory matters, stated, “it makes sense that FINRA wants to take a closer look at SPACS. While SPACs have promise, they could be hotbeds for fraudulent activity.”