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.
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Finance: What are Insider Trading And th...11 Views
Finance a la shmoop what is insider trading and the securities fraud
Enforcement Act of 1988? all right well the Securities and Exchange Act of 1934
aka the 34 Act made it formally illegal to use inside information in trading
stocks amazingly that used to not be illegal or at least not explicitly so [People gambling]
and it wasn't enforced investing was well a clubby white man's insiders gig
and the boys took care of the boys well since people could make a lot of
money with insider information and thought they wouldn't get caught like [Boy peeing at a urinal]
well who's gonna know that I overheard the CEO of big company talking about a
merger in a Denny's washroom you know some folks pretty much ignored
the law well the 1988 law was basically Congress saying you guys were really [Congressman discussing the 1988 law]
serious about this so this new legislation added some hefty penalties
if you get caught as an inside trader people still trade on insider
information though and they still get caught and they go to jail and they lose [Jail door closes on man]
everything they have so he's got to realize some of us were just born to be
bad...
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