Wells notice
A Wells notice is a letter that the
Regulators are not legally required to provide a notice; however, it is the practice of the SEC and the Financial Industry Regulatory Authority (FINRA) to provide such notice.[3] In addition, 80% of people who were sent a Wells notice from 2011 to 2013 ended up facing charges for allegedly violating securities law.[4]
The name "Wells notice" is derived from the Wells Committee of the SEC which proposed this process in 1972. This SEC committee was named after
Among the recommendations made by the committee was the following:
Except where the nature of the case precludes, a prospective defendant or respondent should be notified of the substance of the staff's charges and probable recommendations in advance of the submission of the staff memorandum to the Commission recommending the commencement of an enforcement action and be accorded an opportunity to submit a written statement to the staff to be forwarded to the Commission together with the staff memorandum.[3]
References
- ^ a b Betman, Ronald S. (March 1, 2016). "Trends in SEC Enforcement: What CPAs Need to Know". The CPA Journal.
- ^ a b US Securities and Exchange Commission (October 22, 2014). "Investor Bulletin: SEC Investigations". SEC.Gov.
- ^ a b c Mark J. Astarita, Esq. (n.d.). "The Wells Notice in SEC/FINRA Investigations". seclaw.com (operated by VGIS Communications, LLC). Retrieved October 6, 2017.
- ^ Eaglesham, Jean (Oct 9, 2013) "SEC Drops 20% of Probes After 'Wells Notice '". The Wall Street Journal.
- JSTOR 1123663.
- ^ Koba, Mark (November 28, 2012). "Wells notice—CNBC Explains". CNBC.