Why Regulation by Enforcement Hurts Transparency

In this episode of The SPAC Podcast, Nick Morgan, Partner at Paul Hastings LLP and co-founder of ICAN (Investor Choice Advocates Network), critiques the SEC’s use of regulation by enforcement, particularly in the SPAC context.Nick points to the Momentus Stable Road case of 2021 as a clear example, noting Commissioner Hester Peirce’s concerns about the practice. Instead of transparent rulemaking under the Administrative Procedure Act (APA), the SEC at times has chosen to set policy through one-off enforcement actions, leaving companies and sponsors to defend against shifting standards without public input.Nick argues that real accountability requires:- Public rulemaking under the APA- Open comment and critique- Finalized rules that can be challenged in courtFor sponsors, boards, and investors, this discussion underscores why transparency and predictability matter more than one-off enforcement actions.Connect with the Guest:Nick Morgan – Partner, Paul Hastings LLP | Co-Founder, ICANLinkedIn: https://www.linkedin.com/in/nicholasrmorgan/View all of their episodes here:https://www.thespacpodcast.com/guests/nick-morgan/Connect with the Hosts & The SPAC Podcast:Michael Blankenship LinkedIn:https://www.linkedin.com/in/mikeblankenship/Joshua Wilson LinkedIn:https://www.linkedin.com/in/joshuabrucewilson/YouTube Channel:https://www.youtube.com/@ThespacpodcastContact The SPAC Podcast:https://www.thespacpodcast.com/contact/#SPACs #CapitalMarkets #SPACPodcast #SEC #RegulationByEnforcement #ICAN #TransparencyDisclaimer: Michael J. Blankenship is a licensed attorney and partner at Winston Taylor. Joshua Wilson is a licensed Florida real estate broker and holds FINRA Series 79 and Series 63 licensure. The content of this podcast is for informational and educational purposes only and should not be considered legal, financial, or compliance advice. All views and opinions expressed by the hosts and guests are their own and do not necessarily reflect the policies or positions of any regulatory agency, law firm, organization, or employer. Listeners should consult their own legal counsel, compliance teams, or financial advisors to ensure adherence to applicable regulations, including SEC, FINRA, and other industry-specific requirements. This podcast does not constitute a solicitation or recommendation for any financial products or services.Let's Connect on LinkedIn: https://www.linkedin.com/in/mikeblankenship/ https://www.linkedin.com/in/joshuabrucewilson/ To Contact Us, Please Visit: https://www.TheSPACPodcast.com/contact/