Wells Notice

There is no legal requirement for a regulator to provide a Wells Notice, however, it is the practice of the SEC and the NASD to provide such notice.

In 1972, SEC Chairman William J. Casey appointed a committee (chaired by John Wells and commonly referred to as the “Wells Committee”) to review and evaluate the SEC’s enforcement policies and practices. Among the recommendations made by the Wells 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."

Although the SEC did not adopt many of the recommendations of the Wells Committee it did adopt this recommendation, and the notice is now known as a “Wells Notice” and the prospective defendant’s response is a “Wells Submission.” The NASD also uses a form of the procedure in its investigations.

REFERENCES

Mark J. Astarita, Esq., ''The Wells Notice in SEC and NASD Investigations'' (SECLaw.com, 2005 - www.seclaw.com/docs/wellsnotice.htm )

Information About

Wells Notice