Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

This weekend, Richard Branson became the first man to walk on the moon. Wait, oh, I'm sorry,

he became one of the people to fly on a plane that went close to space,

but not actually into space.

But it did go higher than a lot of planes go, and I suppose it is impressive.

It would be more impressive if he did it in 1950, but still, well done, Richard.

At least he's moved on from those hot air balloons that he was messing around

with a few years ago. I'm sure he will go down in history for his various aviation

re-enactments. Anyhow, in order to celebrate this monumental achievement, the Securities

and Exchange Commission announced on Tuesday that they're charging a space transportation company

and a bunch of people associated with it for making misleading claims about their technology.

The company, a SPAC, is called Stable Road Acquisition Company and the charges relate to its

proposed merger with Momentus Incorporated.

It's a bit of an unusual case and I believe it's the first securities fraud case from

the current crop of SPACS. No doubt there will be more. The SEC's been clear that they're

not happy with what's been going on with SPACs, and they will go after the individuals involved.

There are other SPACs where the principals actually admitted to making false statements to investors, and it might be a good bet that those will be of interest to the SEC too.

In truth, I think the SEC started out with this one, just mainly

because they wanted a space team in order to celebrate Richard Branson's historic achievement.

So what is Stable Road Acquisition Corp? What's momentous and what are they accused of? Well,

Stable Road was a SPAC that raised $172.5 million back in November 2019 in order to buy weed,

or as they worded it in their prospectus, to focus our search on companies in the cannabis industry,

...