Writing an Effective Wells Submission.

Last Updated on: 4th August 2026, 01:33 am

A Wells notice is a letter from the SEC informing a target of a recommended enforcement action. It is not an instituted charge. The SEC’s Enforcement staff does not have the authority to institute an enforcement action; the SEC Commission must authorize any enforcement action that the Enforcement staff recommends. A Wells submission is a written response to a Wells notice. It is not a legal brief; rather, it is a targeted communication that provides the Commission and the staff with the basis for the target’s defenses and seeks a favorable outcome. A favorable outcome might be a declination to institute an enforcement action; it might be narrower charges; or it might be reduced sanctions. If a target is facing the possibility of criminal charges, a favorable outcome might be a decision by the Enforcement staff not to make a criminal referral.

To be effective, a Wells submission must be organized so that the target’s arguments and the factual record are easily digestible for the SEC.

We organize our Wells submissions by the proposed charge and the disputed statutory elements. Our attorneys draft compelling arguments that match each element’s corresponding factual deficiencies, and we rely on a factual record that has been methodically developed to build a case that demands a declination.

The SEC adopted the Wells process in 1972. Following a recommendation from an advisory committee report, the Commission appointed a committee to establish procedures for SEC investigations. John A. Wells, a New York attorney, served as the committee’s chair. Under the process the committee established, SEC Enforcement staff are permitted to recommend charges without providing a Wells notice. Senior Enforcement officials decide whether to provide or bypass a Wells notice, and a target’s right to a Wells submission is conditional. If a target’s counsel asks to bypass the Wells process, senior SEC Enforcement officials may authorize bypassing the Wells process.

What deadlines and format rules apply after a Wells notice?

Neither is the time for filing. The SEC does not impose deadline requirements for Wells submissions. Although an SEC target might have thirty days to answer a subpoena after receipt, a target does not have a universal right to a thirty-day response period for a Wells notice. The Wells notice itself establishes the deadline for filing an appropriate response to the Enforcement staff. With a Wells response in hand, the SEC may decline to institute an enforcement action. However, this is rarely the case. In most cases, the SEC will authorize the enforcement action, and a target’s only hope of preventing a federal criminal indictment is to convince the SEC to make a declination prior to making its criminal referral. An effective Wells submission can be key to achieving an effective declination from the Enforcement staff.

The rules for the SEC’s Wells process are set out in Rule 5(c) of the Enforcement Manual. The relevant portions of Rule 5(c) are quoted here:

“Rule 5(c) does not create an obligation for enforcement staff to do the following:

• provide the target with the enforcement staff’s proposed charges
• provide the target with the enforcement staff’s proposed legal theory
• provide the target with the Enforcement Division’s legal authority
• provide the target with any grounds for the Enforcement Division’s prospective charges
• answer the target’s allegations or comments

A Wells submission is always voluntary. Under Rule 5(c), a person involved in a preliminary or formal investigation may, on their own initiative, submit a written statement to the Commission, and no rule obligates a target to do so.

• The enforcement staff has issued a Wells notice.
• The target has requested a Wells notice.
• The enforcement staff has made a criminal referral to the Justice Department.
• The enforcement staff has made a referral for civil prosecution to a U.S. Attorney’s Office.

The target may respond in writing within the time specified in the Wells notice. Written Wells submissions are limited to 40 pages, not including exhibits. If they are longer than 40 pages, enforcement staff are not required to accept them. In both cases, a Wells submission has no legal standing and the Commissioners on the SEC do not have an obligation to review it. If the target fails to respond in the time specified in the Wells notice, the enforcement staff may reject the late response.”

The Enforcement staff has complete discretion to grant or deny a request for an extension of a Wells deadline. To maximize the chance of receiving a favorable response, a request for an extension of the Wells deadline should precede the deadline and explain why the target needs additional time to respond.

As a matter of course, Rule 5(c) does not require enforcement staff to answer a Wells submission, nor does Rule 5(c) guarantee that a target will have an opportunity to amend or supplement its Wells submission.

How do I draft arguments the Commission can actually use?

Under Rule 5(c), if the staff presents a recommendation to commence an enforcement proceeding, any Wells submission it has received is forwarded to the Commission together with the staff memorandum. To make an effective Wells submission, first and foremost, you must formulate arguments and build a factual record compelling enough for the Enforcement staff to include the submission in its recommendation to the Commission. To do this, you will want to make a convincing case to the Commission in three key areas: match-up, narrative, and corroboration. With that said, while the arguments in a Wells submission are factual, legal, and mitigatory in nature, the goal of an effective Wells submission is to provide the Commission with a clear, concise, and well-supported set of arguments that it can use to determine what (if anything) it is prepared to do against the target. An effective Wells submission can be formulated in three primary ways: first, by combining factual, legal, and mitigation arguments; second, by matching a factual narrative and controlling law to the elements of a charge; and, third, by using a factual narrative and controlling law to address elements of a charge from an evidentiary perspective.

Match-Up, Narrative, and Corroboration

When drafting a Wells submission, it is important to know what a “match-up” is. A match-up is a targeted argument that uses a fact or a legal theory to rebut a specific charge or statutory element. The goal of a match-up argument is to convince the SEC, preferably at the enforcement staff level, that the statutory elements cannot be proven with the evidence at hand. When an Enforcement staff attorney is preparing a recommendation for enforcement to the SEC, they will look to see if there are any match-ups that can weaken the agency’s case. In this scenario, a target’s goal will be to address each match-up with a factual narrative that directly disputes the staff’s assessment. While that narrative must be compelling, it also must be substantiated. The Enforcement staff and the SEC Commissioners will only give weight to arguments that are backed by documentary evidence in the investigative file. Evidence of this kind can be presented either as an attachment to the Wells submission or by clearly explaining why the evidence is located in the investigative file.

Addressing the Statutory Elements of a Charge

The SEC will include the statutory elements it will use to prosecute its recommended charges in its Wells notice. An effective Wells submission will match each statutory element with evidence from the investigative file (and if necessary, to its own newly-developed factual record) that rebuts the corresponding charge. However, these arguments must be more than just factual; they must also correspond to controlling legal authority. Not only should each exhibit to the Wells submission have an explicit reference in the submission’s text, but each exhibit should specifically address a material fact involved in the underlying enforcement proceeding. It is also vital to address any contrary evidence present in the investigative file or the enforcement staff’s draft of the recommendation for enforcement. While an effective Wells submission should not just offer evidence supporting the target’s defense, it should thoroughly address all aspects of the enforcement proceeding, and this includes addressing and resolving all unfavorable evidence in the investigative file.

Guiding the Commission to Key Evidence

One of the most-overlooked aspects of drafting an effective Wells submission is assisting the SEC Commission in finding the key pieces of evidence it needs to resolve the case in the target’s favor. The SEC Commission does not automatically receive the entire investigative file when it receives the Enforcement staff’s recommendation for enforcement. Instead, the enforcement staff typically selects what are the most-relevant exhibits to attach to the recommendation. When a Wells submission is included in a recommendation, it provides the Commission with access to additional pieces of evidence, and a target’s counsel can use the submission to highlight evidence in the investigative file that the Enforcement staff has otherwise omitted. This means that targets must include all documents the Enforcement staff has overlooked, or at least cite and explain the documents’ relevance, in their Wells submissions.

This is the point at which most people call a lawyer. Spodek Law Group takes federal criminal defense cases nationwide from its New York and Los Angeles offices.

How can I obtain and use the SEC investigative file?

Under the Division of Enforcement’s Enforcement Manual, recipients of a Wells notice, or their counsel, can ask the staff to make nonprivileged portions of the SEC’s investigative file available for review. A target may also request a post-Wells-notice meeting with the enforcement staff after submitting its Wells submission. While the SEC allows access to its investigative file, this access remains entirely discretionary. When the SEC’s Enforcement staff considers target access, the Enforcement staff will take into account the target’s cooperation with the SEC, the existence of witness testimony supporting the charges in the Wells notice, the existence of a parallel criminal or civil investigation, and the target’s decision to invoke its privilege against self-incrimination. Targets’ decision to invoke their constitutional privilege against self-incrimination is one factor among others that the SEC takes into account when deciding whether to deny access to its investigative file, and targets that invoke the privilege will have to rely on their counsel to seek a favorable outcome with the Commission.

The Enforcement Manual also provides for a post-Wells-notice meeting between a target’s counsel and the enforcement staff. While the SEC may limit the post-notice meeting to one hour, this presents a unique opportunity to engage in dialogue with the SEC and to gather information not in the SEC’s investigative file. However, the SEC retains total discretion to grant or deny the post-notice meeting, and a request for the meeting should be submitted along with a request for access to the SEC’s investigative file.

A request for access to the SEC’s investigative file should be as specific as possible. With a Wells notice in hand, a target’s counsel can make a focused request identifying specific materials that are relevant to each of the proposed charges and the specific charges’ statutory elements. While the SEC can deny access entirely, a specific request for access to particular materials may result in access to pertinent portions of the investigative file. In this situation, or in the absence of a request, the SEC can also simply deny a target access to its investigative file while responding with a factual statement, and targets and their counsel must work to ensure that the SEC’s response is comprehensive. Finally, a request for access to the SEC’s investigative file must be made early enough for a target’s counsel to incorporate any pertinent evidence found into the target’s Wells submission.

How can a submission affect parallel cases and privilege?

Admissions and Disclosure to the DOJ and Other Regulators

The enforcement staff may use a target’s Wells submission against the target in the Commission’s own enforcement proceeding, and the submission may also be discoverable by third parties. However, they can characterize your Wells submission as an admission under Federal Rule of Evidence 801(d)(2) and use it to prove a fact against you. If you are charged with a violation of the Securities Exchange Act, for example, then the SEC can use a party-opponent’s statement in your submission to prove what you have allegedly said. Moreover, the SEC can share a Wells submission with DOJ prosecutors and other regulators. When the enforcement staff makes a criminal referral, it may share a target’s Wells submission with DOJ prosecutors, subject to applicable access procedures. DOJ prosecutors can use this submission in criminal cases as well. Even when DOJ prosecutors are not involved, voluntary disclosures can be an enormous risk in parallel cases. Statements and documents that present a limited risk in an SEC enforcement proceeding can potentially be catastrophic in a criminal or parallel civil case.

Disclosing the Materials of an Internal Investigation

To draft an effective Wells submission, your counsel must work with the lawyers involved in your company’s (or your) internal investigation. Your counsel’s efforts will require them to rely on materials generated during the internal investigation, and, if necessary, to present these materials as evidence during the Wells process. As a result, your lawyers must review all materials in your internal investigation on a document-by-document basis to identify which ones have the potential to prove or rebut the allegations presented by the SEC. The counsel must then ensure that only materials that either are not subject to the attorney-client privilege or the attorney work-product doctrine or that fall within an exception are disclosed to the SEC. Disclosure of internal investigation materials also carries the risk of a subject-matter waiver under Federal Rule of Evidence 502(a), and your counsel must manage this risk carefully to protect all pertinent information.

Managing Concurrent Conflicts of Interest

In some cases, it may make sense for multiple individuals to retain the same counsel to represent them. For example, if multiple individuals (e.g., CEO, CFO, and investors) have all been charged with a similar violation, then their interests in the case may be well-aligned. When facing a waivable concurrent conflict, ABA Model Rule 1.7 allows joint representation if all parties provide written informed consent. While the SEC doesn’t prohibit joint representation, targets must ensure that their interests continue to align as the case proceeds. If the situation evolves so that clients’ positions differ over key issues such as their knowledge of the alleged crimes, cooperation, or blame, then joint counsel must reassess and potentially terminate representation.

If you are considering whether to seek joint representation, we strongly encourage you to discuss this possibility with us.

Managing Inconsistent Positions in Parallel Cases

If you are facing both the SEC and DOJ in parallel civil and criminal enforcement proceedings, then any position you take in one proceeding can provide valuable information to the other. In the same vein, inconsistent positions adopted by a target and its co-respondents in parallel cases can undermine litigation defenses and weaken the possibility of a declination in both civil and criminal proceedings. To avoid this scenario, when deciding whether to file a Wells submission, a target must consider not only the potential outcome in the SEC’s enforcement proceeding but also the impact it may have on parallel enforcement proceedings. A target must weigh the advantages of attempting to obtain a declination against the risks presented by disclosing sensitive and confidential information, making voluntary statements, or potentially inconsistent positions in parallel cases. If you are facing a Wells notice and a parallel case, we can help you evaluate these risks and we can design a comprehensive and cohesive defense strategy that protects your interests in all proceedings.

Can the SEC or private parties disclose my submission?

Private Litigants

Private litigants are not party to a Wells submission, and they will not see your Wells submission unless you disclose it to them. However, a private litigant can seek access to your Wells submission in the discovery phase of a civil proceeding. In this scenario, you will have the opportunity to challenge the request, and the chances are you will win. If you are facing a civil case, you should discuss the possibilities for requesting a Wells submission in discovery with your defense counsel.

Freedom of Information Act Requests

While the SEC’s internal manuals refer to the Wells process as nonpublic, this internal designation does not make a target’s Wells submission confidential. Completed investigations are subject to FOIA requests, and FOIA’s statutory exemptions can sometimes protect sensitive information. If your Wells submission contains protected information such as trade secrets, then you should request confidential treatment for this information under SEC Rule 83, 17 C.F.R. § 200.83. However, a request for confidential treatment will not be controlling as to whether FOIA Exemption 4 (“commercial or financial information obtained from a person and required to be disclosed pursuant to law”) or FOIA Exemption 7(A) (“records or information compiled for law enforcement purposes the disclosure of which could reasonably be expected to interfere with enforcement proceedings”) applies. Again, your counsel will want to manage this carefully, especially if the investigative file is public.

SEC and the Enforcement Process

When a target submits a Wells response, the target cannot unilaterally restrict the SEC’s use of the response. When a target unilaterally attempts to restrict the SEC’s use of a response, the SEC staff are authorized to reject the target’s submission. If you have a Wells submission you want to get to the SEC without restriction, you should include a cover letter that clearly instructs the SEC how you want to handle the submission. A cover letter will serve to provide clarity to both the target and the SEC, as well as to avoid any issues arising from making voluntary statements in SEC enforcement proceedings. Your counsel can use the cover letter to clearly specify any restrictions you believe are warranted.

Contact a Federal Criminal Defense Attorney

Nothing here is legal advice, and the details of your case matter. Todd Spodek and Spodek Law Group take federal criminal and white collar cases nationwide, from offices in New York, Brooklyn, Queens and Los Angeles. You can reach the firm at 212-300-5196.