In a statement Thursday, a top SEC official made clear that despite their unique structure, special purpose acquisition companies are covered by federal securities rules. Claims that promoters face less legal liability than a traditional public offering are “uncertain at best,” said John Coates, the acting director of the agency’s corporation finance division.SPACs list on public stock exchanges to raise money for the purpose of buying other companies. For months, the SEC has been raising red flags that investors aren’t being fully informed of potential risks. [More: Financial advisers are steering clients away from SPACs]Coates emphasized that the firms have obligations as they seek to identify an acquisition target, and eventually take it public through another transaction known as a de-SPAC.“A de-SPAC transaction gives no one a free pass for material misstatements or omissions,” he said. “All involved in promoting, advising, processing, and investing in SPACs should understand the limits on any alleged liability difference between SPACs and conventional IPOs.” House panel unanimously passes SECURE 2.0 Newsletters 1 3 5 For reprint and licensing requests for this article, click here,MOST READ The Securities and Exchange Commission has a fresh warning for the booming SPAC market: Blank-check companies aren’t an end around to avoid disclosing key information to investors. House committee poised to advance SECURE 2.0 retirement savings bill InvestCloud to acquire Advicent and NaviPlan planning software About 300 SPACs launched on U.S. exchanges in the first quarter, raising almost $100 billion. That total was more than SPACs raised all of last year. The deluge has overwhelmed those responsible for reviewing filings at the SEC, triggered a surge in liability insurance rates for blank-check companies and fueled market anxieties that the bubble is about to burst. 2 The Gates divorce: Lessons for financial advisers Why Tony Robbins, tax shelters and financial advisers don’t mix 4 Subscribe for original insights, commentary and analysis of the issues facing the financial advice community, from the InvestmentNews team.