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June 24, 2022

David Porteous Discusses SEC Enforcement and Regulation of SPAC Companies With Business Insider

Business Insider reported that the Securities and Exchange Commission (SEC) is investigating a company that went public via a special purpose acquisition company (SPAC) for failing to fix inaccurate financial statements and file new ones. The publication turned to business litigation partner David Porteous for insight into the SEC investigation.

“I think there’s very much an opportunity for the SEC to make an example here,” said Porteous. “Whether or not it’s limited to the company or they go after the individuals remains to be seen,” he noted.

Porteous shared that it’s unlikely the SEC would “fine a company into oblivion” as its mission is to protect shareholders, but that the SEC is being “very tough” presently. The size of a potential fine depends on multiple factors, including whether the SEC believes it was an isolated incident or if senior management was involved in or encouraged lying about or omitting financial information, he added.

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