The failed deal put a spotlight on PSTH’s structure as a blank check company, formally termed a SPAC, or “special purpose acquisition company.” SPACs typically function like reverse initial public offerings: They raise money as a public shell company ahead of time, and then use those funds to acquire a private company and thus take it public. But PSTH took a slightly different route, using the money it had raised from investors in an effort to buy shares of UMG. Filed in August by an investor, the case claimed that PSTH was not actually a SPAC at all. Claiming the company had only purchased securities, the lawsuit said the company was more akin to a traditional investment firm, like a hedge fund. As a result, the lawsuit said PSTH ought to be regulated under a differ...