A Wells notice is not a final determination of guilt or wrongdoing, meaning that the recipient has the chance to respond and make a case before any administrative action is initiated. The Wells notice procedure, though, is a clue that the SEC is considering taking action, and how it turns out might have a big impact on the recipient and any linked investors.
Consider the case where the SEC is looking into possible insider trading offenses at a publicly traded business. The SEC suspects that…
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