The U.S. Securities and Exchange Commission (“SEC”) is proposing stricter rules for special purpose acquisition companies (“SPACs”), according to Chair Gary Gensler, in order to provide SPAC investors with the same protections afforded to those investing in traditional initial public offerings. 

The proposals include increased disclosures regarding conflicts of interest, insider compensation, and certain costs and equity dilution involving SPAC transactions. A proposal to clarify the lack of protection for SPACs from safe harbor security laws as well as who is considered an underwriter in SPAC mergers was also raised by regulators.  


In an effort to ensure participants in de-SPAC transactions undertake the requisite due diligence, the SEC will require target companies (those being acquired by the SPAC) to sign as co-registrants when a SPAC files an S-4 regarding the proposed merger, thereby subjecting the target company to liability in the event of faulty disclosures. Furthermore, the SEC will require SPACs to affirm the fairness of the merger and their financials to all investors. The proposal would also require SPACs to demonstrate they are not investment companies, which are subject to stricter regulations. The proposal has received the support of the SEC, save for one lone dissenter who voiced concerns that the proposal “seems designed to stop SPACS in their tracks” by imposing burdens “designed to damn, diminish and discourage SPACs.” 


The U.S. Securities and Exchange Commission’s (“SEC”) Enforcement Division recently announced its annual examination priorities to provide insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets. The SEC’s 2022 examination priorities primarily focuses on the following areas:

  • Private Funds: The Division will focus on registered investment advisors (“RIAs”) who manage private funds. Examinations will review issues falling under the Advisers Act, the fiduciary duties of an adviser, and will assess risks with a focus on compliance programs. The Division will also review private fund advisers’ portfolio strategies and risk management focusing on conflicts and disclosures in this area.
  • Environmental, Social, and Governance Investing (“ESG”): The SEC will continue to focus on ESG-related advisory services and investment products including mutual funds, exchange-traded funds, and private fund offerings.
  • Retail Investor Protections: The Division will continue to address standards of conduct issues for broker-dealers and RIAs to ensure that retail investors and working families are receiving recommendations and advice in their best interests.
  • Information Security and Operational Resiliency: The Division will review the practices of broker-dealers, RIAs, and other registrants to prevent interruptions to mission-critical services and to protect investor information, records, and assets.
  • Emerging Technologies and Crypto-Assets: The Division will conduct examinations of broker-dealers and RIAs that are using emerging financial technologies to review whether the unique risks these activities present were considered by the firms when designing their regulatory compliance programs. 

Given the SEC’s focus on ESG and cybersecurity risks, all registrants should prepare for granular examinations in which firms’ ESG and cyber security operational risk disclosures, practices, policies, and procedures will be scrutinized. It bears noting that these are not the only areas the Division focuses on. While these priorities are what primarily drive the Division’s examinations, the scope of any examination is determined through a risk-based approach.


April 2022 Noteworthy Enforcement Actions Filed




 Eric A. Alexander

 Former CFO 

 1 Global Capital, LLC

 Scott A. Merkelson 

 Former Director of Bus. Dev. 

 1 Global Capital, LLC 

 Fernando Passos

 Former EVP of Finance

 IRB Brasil Resseguros S.A. 

 Anthony M. Baker

 President, CEO

 Island Capital Inc.

April 2022 Noteworthy Settlements And Judgments






Andrew J. Chapin

Former CEO 

Benja Inc.


John W. Gunn


Global Investment Strategy UK Ltd. 


Source: U.S. Securities and Exchange Commission