An Investment Too Good to Be True No Longer: Are SPACs in the Clear from Security Class Action Litigation?

This article examines the U.S. Securities and Exchange Commission special-purpose acquisition company legislation implemented in June 2024. It argues that the new framework strengthens investor protection in SPAC-related investments while imposing greater good-faith obligations on corporate gatekeepers by removing safe-harbour protections as a liability defence. The article analyses SPACs and de-SPACs as investment vehicles, reviews the history of securities class actions in the United States, and considers how the regulatory shift may increase section 11 litigation in SPAC and de-SPAC transactions.