- Goldman Sachs Group Inc (NYSE: GS) announced that it will be shrinking its SPAC business due to the current regulatory environment. These are the details.
Goldman Sachs Group Inc (NYSE: GS) announced it will be scaling back its operations that are focused on special purpose acquisition companies (SPACs). SPACs have been hit with regulatory crackdowns and tough market conditions.
“We are reducing our involvement in the SPAC business in response to the changed regulatory environment,” said Goldman spokesperson Maeve DuVally via CNBC.
Goldman Sachs is terminating involvement with some sponsors and also pausing new issuance. In March, the SEC introduced new rules that would amend safe harbor rules, which would leave SPACs open to investor lawsuits for excessive forecasts.
Many SPACs are speculative with much lower earnings. As a result, many SPAC stocks have seen a major decline as investors are turning to companies with stronger fundamentals at a time of elevated market volatility.
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