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Guest Column: Arbitrary and Capricious Standards Governing Access to the SEC Staff’s Investigative File
Guest columnist Michael MacPhail of Holland & Hart writes that the issuance of a Wells notice presents defense counsel with an opportunity to learn about the proposed case against their client. Granting access to the entire investigative file (including the testimony transcripts of other witnesses) is a key part of the Wells process, since it permits defense counsel to more intelligently advise clients of the risks of possible enforcement action, facilitates the preparation of more focused and helpful Wells submissions, and encourages better and quicker resolutions of proposed enforcement actions. Yet the standards governing whether to grant such access, and their application by the staff, are arbitrary and capricious.
Black Box Corp. Discloses Wells Notice Related to Historical Stock Option Practices
Black Box Corp. disclosed yesterday in a Form 8-K filed with the SEC that on Monday, January 26, 2009, it received a Wells Notice from the SEC. The Wells Notice advised Black Box that the SEC’s enforcement staff intends to recommend that the Commission authorize it to file a lawsuit against Black Box relating to [...]
Reserve Management Co. Announces Possible SEC Enforcement Action Against Co. and Three Execs
Reserve Management Company, Inc. announced yesterday that on December 18, 2008, the staff of the SEC’s Division of Enforcement informed RMCI of the staff’s intention to recommend that the SEC bring an enforcement action against RMCI alleging violations of certain provisions of the federal securities laws. In addition, the staff also intends to recommend enforcement [...]
Shuffle Master Discloses SEC Investigation and Wells Notice to Senior Vice President
Shuffle Master, Inc. disclosed today in a Form 8-K filing that its Senior Vice President, R. Brooke Dunn, had received a Wells Notice from the staff of the SEC in connection with an investigation of alleged improper trading in the Company’s stock by an unrelated third party. According to the filing, The Wells Notice to [...]
Termination of Mannatech Investigation Shows Power of SEC’s Wells Process
As I discuss in my Enforcement Action blog (click here) over at Compliance Week, the recent announcement by Mannatech Inc. concerning the termination of an SEC investigation against it is a good reminder of the power of the SEC’s “Wells process.”
Despite Earlier Wells Notices, SEC Staff Will Not Recommend Enforcement Action Against Mannatech and Execs
The staff of the SEC’s Division of Enforcement has notified Mannatech Inc. that despite earlier Wells Notices, it has now completed its investigation of Mannatech and will not recommend enforcement action against the company. Mannatech announced that it has also been informed by the staff that it will not recommend enforcement action against Mannatech’s CFO [...]
SEC Issues Wells Notice to GE Regarding Revenue Recognition
General Electric Co. (GE) disclosed today that the SEC’s Division of Enforcement has issued a Wells Notice to the company after a three-year-old probe that examined how GE recognizes revenue and presents cash flow. GE made the disclosure in a Form 8-K filed after the close of U.S. markets today, and stated in the filing that it “disagree[d] [...]
Mannatech, Executives Receive Wells Notice from SEC
Mannatech, Inc. (MTEX), its Chief Financial Officer and the Chairman of its Audit Committee have received a Wells Notice from the staff of the SEC’s Division of Enforcement. The company announced that the Wells Notice is related to the timing and completeness of Mannatech’s October 2007 disclosure regarding its dismissal of Grant Thornton LLP as [...]
Wachovia Receives Wells Notice From SEC on Bidding Practices
Wachovia Corp. disclosed in its recently filed 10-Q that the SEC’s Division of Enforcement has notified Wachovia Bank that it may recommend that the Commission file charges against it related to alleged anti-competitive bidding practices in municipal derivatives and investment products. Wachovia stated that it “has been informed that in connection with the bidding of [...]