Waters Opening Statement at Hearing on SPACs, Direct Listings, and Public Offerings
Washington, DC, May 24, 2021
Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following statement a Subcommittee on Investor Protection, Entrepreneurship and Capital Markets virtual hearing entitled, “Going Public: SPACs, Direct Listings, Public Offerings, and the Need for Investor Protections.”
Thank you, Chair Sherman. Special purpose acquisition companies, known as SPACs, or “blank check companies” have skyrocketed in popularity as a way for private companies to “go public” and avoid the public scrutiny of an Initial Public Offering or IPO process. In 2020, the amount of proceeds raised by SPACs jumped an astounding 462% over the previous year. I have deep concerns about the lack of transparency and accountability that is a hallmark of the SPAC process, and it appears that SPAC mergers are structured to ensure Wall Street insiders receive huge profits and retail investors pay the cost. So, I look forward to discussing with our witnesses what Congress and the SEC can do to better protect investors and ensure our markets are fair.