The SEC’s “Wells process” kicks in when the Enforcement staff makes a preliminary determination to recommend that the Commission bring an action against a particular person or entity. Under the Wells process (which takes its name from recommendations made by an advisory committee chaired by John Wells), the potential defendant is informed of this determination, as well as the securities law violations that the staff believes have occurred, via a Wells notice. The person or entity receiving the notice is also offered the chance to make a submission to the Enforcement Division and the Commission to lay out their position and, perhaps, persuade the Commission not to bring an action.
