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Key Takeaways
- SEC Chairman Atkins announced changes to the Wells process, used to notify potential respondents of charges the Enforcement Division Staff intends to bring, to reflect that the process is "an extension of due process and fundamental constitutional rights."
- Short of certain limited categories of confidential material, SEC staff will be expected to provide sufficient information to allow potential respondents receiving a Wells notice to understand the proposed charges and evidentiary support, including key documents and testimony from the investigative file.
- Going forward, potential respondents will now get a minimum of four weeks to respond to the Wells notice, rather than two weeks, which has been standard in recent years. And the full Commission, when asked to approve settlements or filing charges, will also receive an expanded set of material, including Wells submissions made in response to charges the staff has decided not to pursue as well as earlier submitted white papers.
On October 7, 2025, Securities & Exchange Commission Chairman Paul Atkins delivered remarks at the 25th Annual A.A. Sommer, Jr. Lecture on Corporate, Securities, and Financial Law at Fordham School of Law. This alert will address the modifications announced by Chairman Atkins in his remarks to the Wells process. According to Chairman Atkins, the overarching goal of the announced changes will be to promote accuracy, transparency, and fairness in Enforcement decision-making.
What is a "Wells" Notice?
By way of background, during an Enforcement Division investigation, Enforcement Division Staff issue a "Wells" notice to potential respondents to identify the charges—and the basis for such charges—that the Staff intends to recommend to the Commission. Potential respondents are then afforded an opportunity to make written or video submissions to the Commission, setting forth their position on the threatened charges. Often a meeting with the Staff follows the Wells submission.
Key Adjustments to the Wells Process
In his remarks, Chairman Atkins outlined the key shifts in three areas related to the Wells process to promote enhanced accuracy, transparency and fairness:
- First, Enforcement Staff will be expected to provide sufficient information for potential respondents to understand the proposed charges and evidentiary support, including testimony transcripts and key documents. Previously, the staff retained broad discretion as to whether to share information from the investigative file and often refused to share much beyond the transcript of the potential respondent's own testimony. Going forward, according to Chairman Atkins, staff "must be forthcoming about material in the investigative file." The staff must continue to keep certain matters in the file pertaining to whistleblower-identifying information and parallel criminal investigations confidential, consistent with statutory requirements. While Chairman Atkins did not detail what information in the investigative file beyond those confidential matters must be provided, the implication of his remarks is that sharing non-confidential information with the potential respondent should be the default.
- Second, recognizing that the Wells process should be designed to promote accuracy, not "gotcha" enforcement, the staff must now provide at least four weeks for Wells submissions, with allowance for longer timelines when warranted by the complexity of a given matter. This is a welcome change from the practice in recent years, where the staff insisted on a two-week response time with limited opportunities for extensions.
- Third, Chairman Atkins clarified the information that will be communicated to the commissioners in connection with an investigation. The commissioners will receive every Wells submission in settled and contested cases, including in those instances where the charges or grounds for the Wells notice changed after the original Wells notice. Atkins noted that the commissioners will benefit from the additional background from the potential respondent's perspective in those instances. Atkins also encouraged "early engagement" on factual and legal issues with the staff in general, and in particular, the submission of "white papers" by potential respondents to address key issues before a Wells notice is even provided. "White papers" submitted to the staff will be provided to the commissioners as well.
As Chairman Atkins noted in his remarks, the Supreme Court has taken the opportunity in recent cases to focus on constitutional and due process rights in SEC matters, e.g. Lucia v. SEC and Jarkesy v. SEC. The improvements and refinements announced by Chairman Atkins are an acknowledgment that the Wells process is "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 policeman, prosecutor, judge, jury, and executioner all in one."
Counsel should take note of these important changes to the Wells process and take advantage of the expanded opportunity to engage with Enforcement Division staff.
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