The updates include standardized procedures for the Wells process, which gives potential enforcement targets advance notice before the SEC staff recommends charges. Under the new manual, Wells notice recipients will ordinarily receive four weeks to submit their responses, and Wells meetings will be scheduled within four weeks of receiving those submissions and include a member of senior Division leadership.
The revisions aim to enhance "consistency and uniformity" in the Division's practices and create "greater efficiencies," according to the agency. The manual was last updated in 2017 and will now undergo annual reviews.
A key change allows parties to simultaneously request settlement consideration and Commission waivers from automatic disqualifications that can result from enforcement actions. The SEC recently restored this prior practice to provide "greater visibility into the collateral effects of a settlement" and drive efficiencies in resolving investigations.
The updated manual also details the Division's framework for evaluating cooperation in investigations, including how cooperation affects civil penalty calculations. Other changes include updates to internal collaboration protocols, the formal order process, and the framework for making criminal referrals.
"This is an important and long-overdue step that builds on the Division of Enforcement's commitment to transparency, fairness, and process while ensuring it remains able to fulfill its mission," said SEC Chairman Paul S. Atkins.
"The SEC's modified Enforcement Manual seeks to clarify, and enhance the public's understanding of, how we enforce the federal securities laws," said Margaret A. Ryan, Director of the SEC's Division of Enforcement. "Our updates to the Enforcement Manual ensure greater uniformity, reflect the Division's best practices, and improve our staff's ability to carry out the mission-critical work they do on behalf of investors."