Pershing Square’s Ackman battles allegations his PSPC operates illegally

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Bill Ackman, director of investment firm Pershing Square, hit back Tuesday against allegations that his special purpose acquisition firm, Pershing Square Tontine Holdings (PSTH), was operating illegally as an investment firm.

The lawsuit filed by shareholder George Assad argues that PSPC, which recently abandoned a deal with Universal Group, should be regulated as an investment company rather than an operating company.

That means it would be subject to the Investment Companies Act of 1940, according to the lawsuit. He said investing in securities was “basically the only thing PSTH has ever done,” Bloomberg reported.

In a statement sent to the news service, Ackman said the allegations were based on the assumption that the Pershing Square SPAC owns or has held US Treasury securities and money market funds that own US Treasuries.

But that’s common for SPACs when looking for a first business combination, he said.

“PSTH has never held any investment securities that would require registration under the law, and does not intend to do so in the future,” Ackman said. “We believe that this dispute is completely unfounded. “

Regulation under the Investment Companies Act is stricter than normal with a requirement for registration with the Securities and Exchange Commission and restrictions on investment advisory fees, Bloomberg reported.

Pershing Square Tontine stock recently traded at $ 20.08, down 0.27%. It has fallen 39% in the past six months.

After Ackman’s Pershing Square Tontine Holdings announced last month that it would withdraw its offer for a 10% stake in Universal Music Group, Jim Cramer analyzed what the deal said about the SEC.

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