National investment loss lawyers KlaymanToskes issues a notice to investors who purchased Special Purpose Acquisition Companies, or “SPACs,” in the biotechnology sector, and suffered losses due to large concentrated positions, unsuitable investment recommendations, and/or other financial advisor misconduct.
If you sustained losses in excess of $100,000 at the hands of a financial advisor, you are encouraged to contact attorney Lawrence L. Klayman, Esq. for free and confidential consultation at (888) 997-9956 or lawrence@klaymantoskes.com to discuss our investigation and recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
Disclosure: Investors that did not sustain losses in excess of $100,000 at the hands of a financial advisor, broker, or brokerage firm need not call.
The following SPACs are facing significant declines from their IPO prices, noted in red. If your financial advisor recommended any one or a combination of these SPACs causing you losses in excess of $100,000, contact KlaymanToskes to discuss recovery options.
Zyversa Therapeutics Inc. (NASDAQ: ZVSA)
Senti Biosciences Inc (NASDAQ: SNTI)
Cardio Diagnostics Holdings Inc. (NASDAQ: CDIO)
YS Biopharma Co. Ltd. (NASDAQ: YS)
Ocean Biomedical Inc. (NASDAQ: OCEA)
OmniAb Inc. (NASDAQ: OABI)
Apollomics Inc. (NASDAQ: APLM)
Zura Bio Limited (NASDAQ: ZURA)
If you suffered SPAC investment losses in excess of $100,000, contact securities attorney Lawrence L. Klayman to learn about recovery options at (888) 997-9956 or lawrence@klaymantoskes.com. We do not collect attorneys fees unless we are able to obtain a financial recovery for you.
Special Purpose Acquisition Companies, or “SPACs,” have garnered remarkable attention in recent years as a viable means for companies to go public. A SPAC raises funds through an Initial Public Offering (“IPO”) and then embarks on a search of up to two years to identify a suitable private company to merge with, facilitating its transition to becoming publicly traded.
The operational aspects of a SPAC are overseen and coordinated by a sponsor, which can be associated with a private equity or hedge fund, or may simply be an individual or a group of individuals. Notably, there is a growing trend where sponsors are affiliated with entities wholly focused on establishing and managing SPACs.
When a SPAC enters into a merger agreement with its target company, its shareholders are offered the choice to either redeem their shares or partake in the merger. Should a SPAC fail to complete a merger within its typical two-year lifespan, it undergoes liquidation, with all funds, including interest, returned to its shareholders.
Special Purpose Acquisition Companies (SPACs) have emerged as a popular investment opportunity in recent years, offering investors the potential for significant returns. However, investors may find themselves trapped in illiquid positions if a SPAC fails to complete a merger within the stipulated time frame.
Negligent management by brokers and financial advisors, such as failing to monitor SPAC developments or ignoring crucial merger details, can result in further adverse investment outcomes. Some brokers and advisors may mislead investors by providing incomplete or inaccurate information about SPACs, their potential risks, or the underlying companies targeted for merger.
Additionally, the presence of conflicts of interest, where brokers and financial advisors prioritize their own financial gains over the customers’ best interests, could lead to recommendations that do not align with the investors’ needs and risk-tolerance. Brokers and advisors should take into account the inherent volatility of SPAC investments when formulating suitable investment strategies for their clients.
According to Harvard Law School, a recent study found that “Although SPACs issue shares for roughly $10 and value their shares at $10 when they merge, by the time of the merger the median SPAC holds cash of just $6.67 per share.” In addition, based on SPACs that merged between January 2019 and June 2020, the study found that “the median SPAC share purportedly worth $10.00 has $5.70 in net cash per share.”
As of July 2023, the Biotechnology SPACs listed above have significantly declined from their IPO prices, with the majority having lost more than 50% of their return year to date. If you were recommended to invest in a SPAC by your broker or financial advisor, you may have recovery options.
Brokerage firms that failed to disclose the underlying risks associated with SPAC investments, and/or that failed to recommend risk management strategies to customers with large, concentrated or margined positions may be held liable for investor losses.
Investors that suffered losses in excess of $100,000 should immediately contact attorney Lawrence L. Klayman, Esq. for a free consultation at 888-997-9956 and download our SPAC Special Investor Report.
Concentration or “failure to diversify” is a securities violation that occurs when a financial professional concentrates an investor’s assets in one particular investment, class of investments, or market sector. In accordance with FINRA Rule 2111 (Suitability) brokers/advisers and their firms have a responsibility to recommend suitable financial products and trading strategies.
Facts about each investor, such as their financial situation/needs, age, employment status, tax status, investment objectives and experience, risk tolerance, and what other investments they may be holding must be taken into consideration by brokers/financial advisors in order to meet the “reasonable diligence” requirement of FINRA’s suitability rule. Concentrated investments are considered unsuitable.
Holding large concentrated stock or investment positions may pose significant downside risks for investors. Brokerage firms and their registered financial professionals have a responsibility to ensure that their customers understand the risks associated with concentration, and to disclose and recommend the risk management strategies which can be used to protect the value of the concentrated portfolio.
When full-service brokerage firms and their advisors recommend concentrated positions, they can be held liable in FINRA arbitration claims.
KlaymanToskes can help you determine if your SPAC investment loss is the result of a securities violation. Contact attorney Lawrence L. Klayman today for a free consultation at (888) 997-9956 or lawrence@klaymantoskes.com.
Our firm offers legal services on a contingency fee basis, meaning we do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lawrence@klaymantoskes.com
www.klaymantoskes.com