SEC Charges Stable Road SPAC and Space Startup Momentus with Misleading Claims.

The SEC announced on Tuesday that it charged blank-check company Stable Road Acquisition Corp (SRAC.O), its sponsor SRC-NI, space exploration company Momentus Inc and two executives for misleading claims over their planned merger.

The SEC said the companies and Stable Road Acquisition Company Chief Executive Brian Kabot agreed to pay $8 million to resolve allegations they misled investors about Momentus Inc.'s technology and national security risks associated with its former CEO Mikhail Kokorich.

The entities, settled with the SEC without admitting or denying the allegations. An attorney for Kokorich, who is fighting the SEC's charges in court, said his client "looks forward to a resolution of this matter which is favorable to him."

This marks the latest escalation in the SEC's crackdown on Wall Street's special purpose acquisition company, or SPAC, frenzy, which has reached a record over $100 billion this year.

The SEC's action is the first targeting all sides of a SPAC transaction as well as executives in an investigation that took under a year, an SEC official said.

According to the SEC, Kokorich and Momentus, an early-stage space transportation company, repeatedly told investors that it had "successfully tested" its propulsion technology in space, when its only in-space test had failed to achieve its primary objectives or demonstrate the technology's commercial viability.

The regulator also alleged that Momentus and Kokorich misrepresented the extent to which national security concerns involving Kokorich undermined Momentus' ability to secure governmental licenses essential to its operations. The SEC accused Stable Road, its sponsor and Kabot of negligence-based fraud.

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