Jun 1, 2022 - Economy

Elizabeth Warren tries to smack SPACs

Illustration of a stack of papers towering over 2020 candidate Elizabeth Warren

Illustration: Eniola Odetunde/Axios. Photo: Sean Rayford/Getty Images

Sen. Elizabeth Warren (D-Mass.) on Tuesday said she'll soon introduce a bill to regulate SPACs and also released a 26-page presentation on how SPACs "tilt the playing field and enrich Wall Street insiders."

Why it matters: Warren's bill, the text of which hasn't been released, would codify the SEC's recently proposed rules and then go several steps further.

  • For example, it would require additional disclosures, extend the SPAC sponsor's lockup period and increase liabilities for both sponsors and underwriters.

Why it matters less: Warren hasn't had success in getting her Wall Street bills taken up by the Senate, let alone passed into law.

  • This is the fundamental problem with covering, or caring about, her legislative proposals — whether or not one believes she's accurately diagnosed problems and prescribed proper remedies.
  • Warren's much-hyped Stop Wall Street Looting Act, which sought to crack down on private equity, went nowhere. Same goes for her sweeping antitrust proposals, whereas a tech-specific antitrust effort led by Sen. Amy Klobuchar (D-Minn.) might actually reach the floor this summer.
  • A Warren spokesman defended her record, texting that the SEC is rule-making "on climate disclosure that the Senator has advocated for years," and that the White House has incorporated some of her private equity and housing reforms in its agenda (with PE's role in nursing homes on the horizon). None of that, however, involved congressional votes.

The bottom line: Warren has become more of a thought leader than a legislator on capital markets issues, with SPACs likely to be the latest example.

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