A Wells notice is a communication from securities regulator staff that they intend to recommend an enforcement action, giving the recipient a chance to respond. It signals that a matter is moving toward formal proceedings.
The notice describes the potential violations. The recipient may submit a written response explaining why action should not be taken. Many matters are still resolved by settlement afterward.
It is a measurable checkpoint. The share of matters that proceed, settle or close after the notice, and the time each takes, can be derived from public information by agency and matter type.
A Wells notice is not a charge. It is a notice of the staff's intent to recommend one.
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