SEC Warns Investors About Buying SPACs Endorsed by Celebrities

Beware of celebrities hyping SPACs.

That’s the message from the U.S. Securities and Exchange Commission, which warned investors Wednesday about buying shares of special purpose acquisition companies based on endorsements from Hollywood actors, professional athletes and famous musicians. The SEC highlighted that the red-hot listings, which have captured the attention of Wall Street and retail investors, can pose substantially more risks than typical initial public offerings.

“It is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it or says it is a good investment,” the agency said in a statement ...