Fort Lauderdale, FL SEC defense attorney David R. Chase talks about Wells Notices. He explains that a Wells notice is a communication from the SEC to an individual and their counsel after the agency has completed its investigation and determined that it believes there is sufficient evidence to establish violations of federal securities laws. He notes that the notice informs the individual that the SEC intends to recommend that charges be brought and generally provides the individual and their counsel approximately four weeks to respond. He emphasizes that receiving a Wells notice does not mean the investigation is over or that charges will necessarily be filed, noting that he has successfully persuaded the SEC on multiple occasions not to pursue its recommendation and to close the investigation against his client.

He points out that the Wells process is critical because it gives counsel an opportunity to better understand the strengths and, more importantly, the weaknesses in the government’s case. He explains that this understanding allows counsel to provide more informed advice about whether pursuing a settlement is appropriate based on the facts or whether the matter should instead be litigated. He notes that litigation may be the better option when the SEC’s case is not as strong as the agency claims or believes it to be.