On August 17, 2021, a shareholder of Pershing Square Tontine Holdings, Ltd. (PSTH), the $4 billion special purpose acquisition company (or SPAC) led by William Ackman, filed a derivative action alleging (among other claims) that PSTH is an illegally unregistered “investment company” as defined in the Investment Company Act of 1940 (the ICA). Later that week, the same plaintiff, represented by the same legal team, filed suits against two additional SPACs similarly claiming that the SPACs are investment companies operating in violation of the ICA requirement to register. Press reports suggest the plaintiff team contemplates litigation against as many as 50 other SPACs.
