Orrick Joins Leading Law Firms in Response to Investment Company Act Lawsuits Targeting the SPAC Industry

August.30.2021

Orrick has signed a joint statement, alongside over 55 of the nation’s leading law firms, responding to a recent action against a SPAC asserting that SPACs are investment companies under the Investment Company Act of 1940 because proceeds from their IPOs are invested in short-term treasuries and qualifying money market funds.

The signing law firms view the assertion that SPACs are investment companies as without factual or legal basis and believe that a SPAC is not an investment company under the 1940 Act if it (i) follows its stated business plan of identifying and engaging in a business combination with one or more operating companies within a specified period of time and (ii) holds short-term treasuries and qualifying money market funds in its trust account pending completion of its initial business combination.

Read the joint statement.