Coda: How Michael Ohlrogge’s scholarship has shaped regulation of SPACs

Academic scholarship can shape law and policy, but tracing a direct line between the two is often difficult. Not so with work that Associate Professor of Law Michael Ohlrogge has done on Special Purpose Acquisition Companies (SPACs). Publicly traded companies that are created to acquire or merge with an existing company, SPACS were once an obscure vehicle for taking businesses public, but they became a Wall Street phenomenon, attracting billions from investors.

Michael Ohlrogge
Michael Ohlrogge

Last month, the US Securities and Exchange Commission adopted new rules to enhance investor protections related to SPACs. The final rule release contains dozens of citations to Ohlrogge’s writing on the topic, including “A Sober Look at SPACS,” which appeared in the Yale Journal of Regulation in 2022.

In the fall of 2020, at the height of SPAC mania, Ohlrogge and two coauthors began presenting a draft of the paper to academic audiences and posted it online. Digging beneath the hype to uncover hidden costs and overblown benefits of SPACs, the article became a viral sensation, drawing attention from Reddit discussion boards to mainstream publications such as the Wall Street Journal and the New York Times, and even in a tweet from Elon Musk to his then-50 million followers. It also became the most downloaded paper ever in both the Corporate Law and Securities Law categories on SSRN, a website devoted to dissemination of scholarly research.

In May 2021, SEC Chairman Gary Gensler told a Congressional subcommittee that he’d asked SEC staff to draft rules or guidance to provide more protection for investors and referenced “A Sober Look at SPACs” during his testimony. A year later, when the SEC published proposed rules, Ohlrogge was concerned that aspects related to disclosure fell short. He (and coauthors) weighed in again, submitting a comment letter and publishing another article. “Fortunately,” Ohlrogge said in an email after the final rule was released, “it looks like the SEC followed our detailed suggestions quite closely.”

Posted February 15, 2024