SPACs face fresh SEC threat for bullish forecasts – Bloomberg News

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The regulation will be part of a broader set of rules governing special purpose acquisition companies (SPACs), set to be released on Wednesday, the report said, citing people familiar with the matter.

Under the new rule, investors can sue over inaccurate SPAC forecasts, according to the report.

Last year, Reuters reported that the securities regulator was weighing guidance to rein in growth projections made by SPACs, amid concerns that such forecasts were often wildly optimistic.

Market interest for SPACs has waned in recent months, hurt by high rates of redemptions by investors and U.S. market volatility triggered by rate hike concerns and geopolitical tensions.