SPACS And Tonopah
Yesterday, John Jenkins writing for DealLawyers.com noted that 49 law firms had signed on to a statement that special purpose acquisition companies (SPACs) are not investment companies subject to registration under the Investment Company Act of 1940. The question of whether SPACS are or are not unregistered investment companies has arisen due to recent lawsuits filed by Professors Robert Jackson (NYU) and John Morley (Yale). Professor Jackson served as an SEC Commissioner from 2017 to 2020. This hullabaloo reminded me, of course, of Tonopah, Nevada. Why? Because the courts and the SEC often look to the four "Tonopah" factors in determining whether an issuer is "primarily engaged" in a non-investment company business. See In the matter of The Tonopah Mining Company of Nevada, 1947 SEC LEXIS 321.
I also think of Tonopah as it is one of my favorite rural Nevada towns and often the jumping off point for my hiking trips in the central Nevada mountains. For more on the relationship of the town of Tonopah to the Investment Company Act, see this post from earlier this year.