Can buyout-king Ronald Perelman be trusted with a blank check?

Investors have long craved the chance to follow big-name moneymen like Perelman into deals. But plowing cash into the billionaire's MAFS Acquisition Corp.—one of a spate of so-called Special Purpose Acquisition Companies, or SPACs, about to hit the market—carries a host of financial risks, none of which have to do with his ex-wife Ellen Barkin.

Perelman is among a slew of financial titans and luminaries now looking to score with a SPAC, with everyone from Apple co-founder Steve Wozniak and Triarc C.E.O. Nelson Peltz to the retired C.I.A. director George Tenet and former Vice President Dan Quayle seeing opportunity to mint new riches.

The problem is that such gains may not trickle down to the hoi polloi. The market for SPACs, which are publicly traded corporate shell companies that hunt for merger opportunities, is getting crowded. Sponsors have been quietly watering down essential investor protections. And public investors in many SPACs have already seen dismal returns.

In fact, this strange corner of the market holds the increasing potential to leave SPAC shareholders with crumbs while their big name sponsors makes a mint on the I.P.O.

Such worries haven't slowed down the SPAC underwriting train. More than $12 billion in SPACs went to market last year, accounting for about one-quarter of all initial public offerings. Nearly $3 billion in SPACs went public over the first 45 days of 2008. This is close to the total $3.3 billion in SPACs that were priced in all of 2006, according to Dealogic.

The numbers continue to grow even as longtime SPAC underwriters worry that recent mega-SPACs have already sucked away the liquidity necessary to support them. Thirty-four SPACs, with an estimated combined value of about $7.9 billion, are in the pipeline.

And as the market has zoomed ahead recently, a curious thing has happened to some of the basic investor protections that were once standard fare in a SPACs prospectus. With a cut here and a rewording there, they've been reduced.

"They don't call these things blank-check companies anymore, but that is effectively what they are," says Dirk Jenter, professor of finance at Stanford University, adding that the first blank check companies floated in the 1980s worked wonderfully, as have many of the early SPACs.

But "the pattern you see in financial innovations always seems to run the same way. I'm worried that we might be right around the cusp where people made good money, but now the less sophisticated are getting involved and being offered worse deals and worse protections."