Wells Notice End Of Road For 20% Of SEC Investigations

Oct 15 2013 | 9:58am ET

A Wells notice from the Securities and Exchange Commission is supposed to indicate that an enforcement action is imminent. But in one-fifth of cases, the notice is the enforcement action.

About 20% of individual Wells notice recipients in the past two years were not charged, The Wall Street Journal reports. The agency issued 797 in the two years to last September and closed 159 probes without taking action.

The SEC has only six months to take action after issuing a Wells notice unless enforcement directors grant an extension. Recipients have the opportunity to counter the allegations in the notices prior to charges being filed.

The many dropped cases "confirm that when we invite submissions, we carefully consider the evidence and arguments presented to us," an SEC spokesman told the Journal.

The SEC said it did not keep records on Wells notices prior to 2010, but some longtime agency officials told the Journal that they believe that even more cases were dropped prior to that point.

It is also unclear how many of the 387 companies that received Wells notices over the period avoided charges.


In Depth

Q&A: Omni Macro Fund Bullish On India, Watching China

Mar 4 2015 | 3:35pm ET

Omni Macro Fund was formed in 2007 by Stephen Rosen, previously a prop trader at...

Lifestyle

Hedge Fund Manager Out as Minnesota Wild Minority Owner

Feb 25 2015 | 2:45pm ET

New York hedge fund manager Philip Falcone is no longer a minority owner of the...

Guest Contributor

Managing Diversification And Drawdowns In The “New Normal”

Mar 5 2015 | 2:42pm ET

In 2008-2009 diversification alone failed to provide adequate risk management for...

 

Editor's Note