Former SEC Chairman Expects SPAC Transactions To Be Treated Like IPOs

The U.S. Securities and Exchange Commision released a statement on Thursday signaling that special purpose acquisition companies could receive the same scruitiny as IPOs.

Former SEC chairman Harvey Pitt told CNBC's "Squawk Box" Friday that he's not surprised to see the statement, as there had been a building concern about the avoidance of some of the more rigorous aspects of IPOs. 

SPACs often provide forward-looking statements and rely on projections in investor presentations because many of the companies that have gone public via SPAC recently are pre-revenue.

This has been a recurrent theme, particularly with some of the electric vehicle companies that have become public entities, Pitt said.

CNBC's Andrew Sorkin asked if the former SEC chairman was talking about Lucid Motors and others.

"Yes," Pitt replied.

Lucid Motors announced its merger with Churchill Capital Corp IV CCIV on Feb. 22. 

Moving forward, companies that use the SPAC approach will likely have to be far more circumspect about their projections, the former SEC chairman told CNBC. 

Pitt said the SEC has essentially said it will treat all of the SPAC transactions as equivalent to IPOs, which will disallow the companies from relying on the safe harbor exemption for forward-looking statements.

This should "bring to a halt" some of the more aggressive projections we have seen in recent months, he said. 

CCIV Price Action: Chuchill Capital Corp IV shares were down 0.69% at $23.02 at last check Friday.