While a “Wells Notice” has “well” in it, it’s not a welcome thing.
The “Wells” comes from John Wells, who once chaired the Wells Committee (also named after him) at the Security Exchange Commission, or the SEC.
If you’re thinking “SEC? Uh-oh..."...you’re right. When the SEC starts talking to you, it’s not because they want to be your BFF.
A Wells Notice is a letter from SEC regulators to let you know they’ve completed an investigation of SEC infractions. It lays out the basics of the infractions, and concludes with next steps on what they’re going to do with you. If you’ve been naughty, violating securities laws, it means punishment in the form of civil action against you (whether you’re a person or a firm).
When you get a Wells Notice, you still have the opportunity to defend yourself via a “Wells Submission” to those involved in investigating your violations, within 30 days of receiving your Wells Notice. Rather than a plea or a “It wasn’t me!” kind of letter, this response should lay out legal reasons why you shouldn’t be charged. Also, those responses are public, so...keep that in mind, too.
Between 2011 and 2013, 80% of Wells Notice recipients faced charges for their tomfoolery, so Wells Notices are no joke.
Related or Semi-related Video
Finance: What is the 1934 Securities And...14 Views
Finance a la shmoop what is the 1934 Securities and Exchange Act? okay if
you're going to exchange securities like trade stocks and bonds among yourselves [Stocks and bond exchange between man and woman]
well then there have to be rules right yeah you'd think well there didn't used
to be and then aunt 1934 came along and well she set the table the key element [Aunt setting dinner table]
that 34 Act created was the SEC itself it's not a football conference near
Florida it was a wise creation because it recognized that well whatever the
world looked like in 1934 it was highly likely that 50 years later it would look
a whole lot different and while horses and buggies went away [Horse and carriage disappears]
while that wasn't the case for stocks and bonds and keep in mind that another
Act was created a year earlier cleverly named yes the Securities Act of 1933
while that act focused on primary shares that is original shares like the kind
sold in an IPO well the 1934 Act was all about shares
traded after that initial set it's called the secondary market where
secondary shares are traded not primary ones well this new law made the New York [Group of people dealing in stock market]
Stock Exchange a big deal with big powers and made insider trading illegal
and believe it or not it really wasn't illegal back then and it you know thus
paved the way for many exciting Wall Street movies where greed is sometimes
good and sometimes not [List of Wall Street movies]
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