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: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Viking Manager In Rent Dispute

Aug 11 2014 | 4:14am ET

A hedge fund manager is demanding most of his money back from his former landlord...

Guest Contributor

Majority Of Inflows Go To Brand Name Hedge Funds

Aug 12 2014 | 9:00am ET

Since the market correction of 2008, a vast majority of hedge fund net asset flows...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note