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73 Emory L.J. Online 1 (2023)

handle is hein.journals/emyon73 and id is 1 raw text is: THE SEC'S SPAC SOLUTION Karen Woody Lidia Kurganova* ABSTRACT The SPAC craze has ebbed and flowed over the past few years, creating fortunes and ruining others. The SEC stepped into the mix in 2022 and proposed rules governing SPACs. The proposed rules artfully balance the interests of investor protection while retaining some of the featured characteristics of SPACs as innovative ways to take companies public. This Article details the history of SPACs, including their benefits and risks, and analyzes the SEC's proposed rules, arguing that the SEC is well within its Congressional authority to regulate SPACs, and that the proposed rules are both well-tailored and necessary. INTRODUCTION On March 30, 2022, the Securities and Exchange Commission (SEC) proposed much-anticipated regulations related to Special Purpose Acquisition Companies (SPACs).1 SPACs provide an alternative route for a company to be traded on a national exchange, such as the New York Stock Exchange (NYSE) and NASDAQ, without undertaking the cumbersome process of an initial public offering (IPO).2 Although SPACs have been around for decades, they spiked in popularity in recent years.3 Between 2019 and 2021, the number of SPACs more than doubled in the United States,4 becoming popular investment vehicles among private equity shops, technology start-ups, and even celebrities like tennis superstar Serena Williams and rapper Jay-Z.5 In 2021, there were more SPAC deals than traditional IPOs, totaling 614 SPAC IPOs and raising * Associate Professor, Washington and Lee University School of Law; J.D. 2023, Washington and Lee University School of Law. t See SEC infra note 9. 2 See Max H. Bazerman & Paresh Patel, SPACs: What You Need to Know, HARV. Bus. REV. (July-Aug. 2021), https://hbr.org/2021/07/spacs-what-you-need-to-know. 3 See John C. Coates, SPAC Law and Myths, 78 AM. BAR ASS'N: Bus. LAw. 371, 371-72 (2022). 4 See SPAC and US IPO Activity, SPAC ANALYTICS, https://www.spacanalytics.com/. 5 See Usha Rodrigues & Michael Stegemoller, Redeeming SPA Cs, U. GA. SCH. L.: RSCH. PAPER SERIES, 2021, at 6, 7.

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