SPAC Litigation
- Holland & Knight's SPAC Litigation Team is experienced in handling all elements of regulatory enforcement and civil and criminal litigation for special purpose acquisition companies (SPACs).
- Our team, which includes a former SPAC enforcement leader at the U.S. Securities and Exchange Commission (SEC), has successfully represented companies, boards of directors, officers, underwriters, accountants, sponsors, early institutional investors and private equity parties in securities, governance and enforcement matters that serve as the foundation to SPAC litigation.
- We counsel parties entering into SPAC transactions on managing risk amid shifting regulations and increased investigations.
Overview
Special purpose acquisition companies (SPACs) have become popular vehicles for private businesses to go public given the relative efficiency and fewer regulations than a traditional IPO. However, SPACs can become attractive targets for class action plaintiffs' lawyers, disappointed shareholders, the U.S. Securities and Exchange Commission (SEC) and other government regulatory agencies, and federal prosecutors.
The attorneys on Holland & Knight's SPAC Litigation Team have decades of experience defending clients against regulatory enforcement and civil and criminal litigation arising from the issuance of securities or mergers and acquisitions.
Our SPAC litigation lawyers include former litigation leaders for the SEC, former federal prosecutors and career civil securities litigators. While working for the SEC, one of our partners supervised the three largest actions to date involving misconduct in connection with SPAC transactions, obtaining judgments totaling more than $160 million.
Our attorneys have long records of successfully representing clients against plaintiffs, regulators and prosecutors – and frequently all three at once.
Examples of Our SPAC and Securities Litigation Successes
- While at the SEC, one of our partners supervised the commission's $125 million settlement of charges against Nikola Corp., which had raised $1 billion through a SPAC. The SEC charged the company with defrauding investors by misleading them about its products, technical advancements and commercial prospects regarding the company's plans to make semi-trucks that ran on low emission fuel. We also supervised SEC action against Nikola's founder, Trevor R. Milton.
- While at the SEC, one of our partners supervised the commission's $38.8 million settlement of charges against Akazoo S.A., a purported music streaming business based in Greece, for allegedly defrauding investors out of tens of millions of dollars in connection with a 2019 special purpose acquisition company (SPAC) business combination
- Successfully defended Richard N. Perle in connection with litigation and SEC and criminal investigations in the United States and Canada arising out of allegations that Conrad Black and others looted more than $450 million from Hollinger International Inc., the publisher of the Chicago Sun-Times, The Sunday Telegraph and The Daily Telegraph, with all investigations against our client dropped without any action and all civil claims dismissed
- Represented the board of directors of a life sciences company in connection with shareholder derivative litigation alleging that the client's board breached its fiduciary duty by failing to prevent off-label marketing of certain blockbuster drugs, which had resulted in the client paying a $2.3 billion civil and criminal penalty
- Represented a life sciences company in connection with consolidated securities and Employee Retirement Income Security Act (ERISA) class actions arising out of the client's alleged failure to disclose certain cardiovascular risks associated with two of its anti-inflammatory drugs
- Represented Martha Stewart in lawsuits brought by the SEC and shareholders in Martha Stewart Living Omnimedia in connection with alleged insider trading of stock of lmClone Systems Inc.
- Represented five outside directors of HealthSouth Inc. (now Encompass Health) in connection with securities fraud, breach of fiduciary duty, ERISA and tax claims arising out of accounting fraud allegedly perpetrated by former CEO Richard Scrushy and others
- Defended pharmaceutical companies, high-tech equipment manufacturers, financial institutions, utilities, media companies, bioenergy developers, social networking companies and medical device manufacturers, along with their directors and officers, in federal and state securities class action lawsuits
- Successfully represented the former chief financial officer of a Nasdaq-traded company in an SEC fraud and disclosure investigation, resulting in no claims against the client
- Successfully defended the chief financial officer of a Nasdaq-listed company in a securities class action, obtaining a dismissal
- Advised the audit committee of a large-cap New York Stock Exchange (NYSE)-traded aerospace company on an internal investigation of accounting controls, policies and practices
- Obtained one of the largest Rule 11 sanctions in the country against plaintiffs for filing a frivolous securities class action
