A wells notice is a communication from the SEC to the targeted defendant and
his council that is issued after the SEC completes its investigation and
concludes that it has sufficient evidence to prove violations of the federal securities laws. So the SEC
notifies the individual and advises that it is intending to recommend charges to its
client, the SEC commission. At that point, the individual and his council has approximately four weeks to respond.
It’s important to understand that a wells notification is not the end. It’s
not an indication that it is certain that charges will be filed. In fact, I
have on many occasions successfully persuaded the SEC not to pursue its
recommendation of charges and it has dropped the case, the investigation rather, against my client. The wells
process is a critical process because it allows council to gain a much better
understanding of the strengths and more importantly the weaknesses in the government’s case.
that will then allow counsel to advise the client whether a settlement makes
sense given the facts or whether this case should be litigated perhaps because
the SEC does not have despite its claims the strength of the case that it would like us to Believe.