A representative for David Solomon’s Goldman Sachs stated on Monday that the firm is minimising its connection with blank-check companies, as US regulators continue to crack down on what was one of the hottest phenomena on Wall Street in recent years.

Investment of the Goldman Sachs banking division has benefited from the boom in the special purpose acquisition company (SPAC) industry. SPAC issuance has dropped dramatically as the US Securities and Exchange Commission tightens its inspection and market sentiment becomes saturated.

The Securities and Exchange Commission proposed a rule that would compel SPACs to disclose additional information about their sponsors, including compensation, conflicts of interest, and share dilution, in March.

Concerns over the impact of interest rate hikes, as well as uncertainties surrounding the Ukraine conflict, have added to the SPAC market’s troubles.

According to Bloomberg Law, which originally revealed Goldman’s plans, the bank will also put a hold on fresh SPAC issuance in the United States for the time being.

SPACs are shell businesses that generate money through a public offering in order to merge with a private firm and take it public, avoiding the stricter regulatory scrutiny of a typical IPO.

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