The recent dramatic rise in Special Purpose Acquisition Companies (SPACs) has raised serious investor protection concerns, Americans for Financial Reform and CFA warned in a letter to members of the House Financial Services Committee. These vehicles for taking private companies public represent an attempt by sponsors and their target companies to “end-run longstanding rules designed to promote fair and efficient markets,” exposing investors and our markets to significant risks, the groups wrote. “The incentives of the SPAC sponsors, underwriters and early investors are poorly aligned with those of ordinary investors,” they added. As a result of these distorted incentives, SPACs have performed very poorly for most investors while providing “spectacular windfalls for insiders and favored investors.” The letter outline AFR and CFA’s concerns with SPACs and offers recommendations for steps Congress and financial regulators should take to better protect retail investors.