Today [March 30, 2022], the Commission is considering a proposal to strengthen investor protections in special purpose acquisition companies (SPACs). I am pleased to support this proposal because, if adopted, it would strengthen disclosure, marketing standards, and gatekeeper and issuer obligations by market participants in SPACs, helping ensure that investors in these vehicles get protections similar to those when investing in traditional initial public offerings (IPOs).

Aristotle captured an overarching principle with his famous maxim: Treat like cases alike. [1]

SPACs present an alternative method to go public from traditional IPOs. I don’t just mean the first stage—when the blank-check company goes public (which I call the “SPAC blank-check IPO”). I’m also referring to the second stage, often called the de-SPAC (which I call the “SPAC target IPO”).

Nearly 90 years ago, Congress addressed certain policy issues around companies raising money from the public with respect to information asymmetries, misleading information, and conflicts of interest. [2]

For traditional IPOs, Congress gave the SEC certain tools, which I generally see as falling into three buckets: disclosure; standards for marketing practices; and gatekeeper and issuer obligations. Today’s proposal would help ensure that these tools are applied to SPACs.

First, Congress said, companies raising money from the public should provide full and fair disclosure at the time investors are making their crucial decisions to invest. To address such disclosure, today’s proposal would:

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