Capital Markets & Securities Law Watch

The U.S. Securities and Exchange Commission (SEC) case against SolarWinds and its Chief Information Security Officer has been dismissed, closing a high-profile cybersecurity enforcement action. This comes as SEC actions against public companies have dropped 30% year-over-year, with the lowest level of enforcement action since 2012—highlighting a notable slowdown in regulatory activity.

In In re Multiplan Corp. Stockholder Litigation, C.A. No. 2021-0300-LWW (Del. Ch. Jan. 3, 2021), Vice Chancellor Lori Will of the Delaware Court of Chancery issued the first major decision applying Delaware law to de-SPAC transactions, holding that Delaware’s entire fairness standard of review applies to a de-SPAC transaction challenged on the basis of misleading statements or omissions in the SPAC’s proxy statement. 

A new trend in special purpose acquisition company litigation has emerged: shareholder derivative actions seeking to declare SPACs “investment companies” under the Investment Company Act of 1940. Despite powerful backing, these lawsuits miss the mark.