Receiving a subpoena from the SEC, or an 8210 Request from FINRA can be the start of a long investigative process while can ultimately lead to a Wells Notice, and an enforcement proceeding. How you handle that process can dictate the end result, and you need to retain competent securities counsel to guide you through that process.
That process ends, and the enforcement process starts with a Wells Notice – a notification from a regulator that it intends to recommend that enforcement proceedings be commenced against the prospective respondent. The notice references, in broad-strokes, the violation that the Staff believes has occurred.
Receiving a Wells Notice is hardly a positive event, as it signifies that you are the subject of an investigation and that enforcement proceedings are going to be commenced against you. However, a Wells Notice is rarely a surprise, and provides a unique opportunity for a prospective defendant to speak directly to the ultimate decision maker prior to the commencement of regulatory proceedings. The process by-passes the District or Regional Staff, and allows the prospective defendant to present his case against the commencement of the proceedings directly to the decision makers, without filtering or misunderstanding of the Staff.
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.