Securities class actions involving Special Purpose Acquisition Companies (SPACs) can raise interesting issues. A SPAC is a publicly traded shell company created to merge with an existing privately held business so as to allow the target company to go public without the time, expense, and regulatory scrutiny of an initial public offering. If the privately held business makes material misstatements that affect the SPAC’s stock price prior to the merger, can that company and its officers be liable for securities fraud?
The U.S. District Court for the Northern District of California recently considered that question in In re CCIV/Lucid Motors Sec. Litig., 2023 WL 325252 (N.D. Cal. Jan. 11, 2023)….
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