As Securities and Exchange Commission defense counsel, we can attest first-hand to the dread our clients experience when we inform them that we have received a “Wells Notice” from the Division of Enforcement at the SEC. The Wells Notice, which serves as the civil equivalent of a criminal grand jury target letter, informs the recipients that the Division is prepared to recommend to the Commissioners that they be sued. The putative defendants then learn that they have only two weeks to submit a written defense or “Wells Submission,” that may or may not be read by commissioners, and that the price of a submission is that the defendant is forced to agree that the submission itself may be used against them in any subsequent proceeding. Hardly a level playing field — until now.
On October 7, 2025, the SEC Chairman Paul Atkins delivered a speech at the 25th annual A.A. Sommer, Jr. Lecture on Corporate, Securities, and Financial Law. Chairman Atkins extolled the key role of the Wells process and how it should be viewed as an extension of due process and fundamental constitutional rights that play an integral role in protecting citizens from a powerful government agency that could become a “policeman, prosecutor, judge, jury, and executioner all in one.” Reversing years of one-sided dynamic, Chairman Atkins promised a more open sharing of facts gained in the investigation, affording potential corporate and individual defendants with meetings with senior SEC Staff to discuss any potential action, doubling the time allowed to submit a written submission, and encouraged the early use of white papers to resolve factual disputes — among other reforms.
