On October 7, 2025, U.S. Securities and Exchange Commission ("SEC" or "Commission") Chairman Paul S. Atkins announced procedural reforms aimed at enhancing fairness and transparency in the agency's enforcement program.1 Chairman Atkins emphasized that the reforms focus on the SEC's three-part mission: to protect investors; to maintain fair, orderly, and efficient markets; and to facilitate capital formation. These changes will have implications for companies and individuals facing potential enforcement actions.
Enhanced Wells process protections
The "Wells" process is the procedure that the SEC's Enforcement Division ("Enforcement") staff can use at the conclusion of an investigation to notify potential respondents or defendants of any charges and remedies that the staff intends to recommend to the Commission. The staff typically sends a potential respondent or defendant a letter identifying the potential recommendation(s) (“Wells Notice”) and informs the recipient individual or entity that there is an opportunity to send the staff and the Commission a written or video submission (“Wells Submission”) to explain the recipient's views on the recommendation(s).2 Chairman Atkins announced several enhancements to this procedural safeguard:
Extended timeline for submissions
When sending Wells Notices, the Enforcement staff will provide the recipient(s) with at least four weeks to make Wells Submissions, particularly in complex cases. While the prior practice was typically to set two-week deadlines, this change formally establishes minimum timeframes that will provide parties with an adequate opportunity to prepare comprehensive responses. The Enforcement staff also has discretion to grant extensions.
Improved evidence disclosure
When giving a Wells Notice, Enforcement staff will offer potential respondents or defendants sufficient information to understand the potential charges. Prior to this change, the staff was not always forthcoming with the legal and factual bases for their recommended charges, instead merely providing the legal citations for the recommended charges and a high-level list of potential remedies. Chairman Atkins has now asked the staff to further provide the evidentiary basis for any charges, including testimony transcripts and key documents—often referred to as a "Reverse Proffer." Staff must balance being open about the material in the investigative file and adhering to statutory and programmatic limitations (e.g., the Commission is required to keep certain information confidential, such as information that identifies whistleblowers or would implicate a criminal investigation).
Wells submissions provided to commissioners
Chairman Atkins confirmed that Commissioners will receive every Wells submission whether in settled or litigated cases. This ensures the Commissioners benefit from the full context of both the staff's position and the respondent's perspective before making enforcement decisions.
Early engagement opportunities
Chairman Atkins also endorsed a "White Paper" process if a potential respondent or defendant would like to present its views before the completion of an investigation or where a company has an obligation to publicly disclose a Wells Notice. Addressing a matter early on, particularly if there is a potential mistaken view of the facts, could save both sides time, energy, and resources. The staff and the respondent or defendant might agree to a "White Paper" process prior to the issuance of a "Wells Notice" to avoid any obligation to disclose such notice. Recently, Enforcement staff have shown increased willingness to share areas of concern and the facts that may support a charge before making a final recommendation.
This kind of early engagement will also help to ensure that any meeting with senior Enforcement leadership is efficient and productive. Earlier this year, senior Enforcement leadership announced that they are now open to meetings to discuss Wells submissions and enforcement recommendations, which was not always the case under the prior administration.3
Simultaneous settlement and waiver consideration
Chairman Atkins also discussed the recent modification to the Commission's process for requests for waivers from collateral consequences that could result from SEC actions.4 In September, Chairman Atkins announced that the SEC would once again allow firms to request such waivers simultaneously with the consideration of settlement offers.5 In recent years, the Commission had abandoned the practice of considering enforcement settlements and any related waiver requests concurrently, with potential respondents and defendants negotiating settlements without knowing whether they would receive such waivers.
Restored unified review
The new statement makes clear that staff from the Enforcement and other SEC Divisions will present an offer of settlement in an enforcement action with a concurrent waiver request for simultaneous consideration. Of course, the Commission nonetheless may decide to consider the requests independently. Chairman Atkins explained that this simultaneous approach will enable the Commission to consider efficiently the relevant facts, conduct, and ramifications of the settlement and waivers to ensure the SEC fulfills its mission.
Flexibility for settling parties
There may be instances in which the Commission accepts a settlement offer but rejects a waiver request. In such cases, Chairman Atkins expects the staff to notify the potential respondent or defendant of the planned response. Then, the respondent or defendant must notify the staff if the settlement offer approved by the Commission is acceptable. This process provides parties with meaningful choice when facing, for example, only partial acceptance of settlement terms.
Broader enforcement process reforms
Chairman Atkins also outlined a comprehensive vision for ongoing enforcement reform focused on several key principles:
Rule of law and predictability
The SEC's Enforcement program should endeavor to "respect the rule of law, provide predictability, and protect the rights and interests of those with whom [it] interacts." This program should efficiently conduct investigations and decide whether to recommend enforcement actions or close investigations promptly and without publicity. The approach outlined by Chairman Atkins is consistent with the Department of Justice's focus on fairness and efficiency in corporate enforcement.6
Transparency
Chairman Atkins also emphasized the importance of transparency to ensure the public understands the reasons for SEC actions. Enforcement staff should follow the Commission's public guidance, particularly on penalties and cooperation. More specifically, Commission decisions should clearly explain both the reasons for the initial violation and the justification for the remedies ordered. Investigation closing letters should notify potential respondents or defendants, and recipients of document requests and subpoenas, that the staff has concluded its investigation.
Consistency and coordination
The Enforcement program should seek to achieve uniform outcomes, regardless of which region or unit investigates or litigates. This principle requires ensuring that the Enforcement staff works collaboratively and seeks to achieve the regulatory and policy objectives of the Commission, including those of the other Divisions.
Appropriate incentive structures
The Commission will set priorities for the Enforcement staff and ensure that proper incentive structures are in place. Chairman Atkins is concerned that rewarding Enforcement staff for bringing enforcement actions may discourage staff from closing investigations. Instead, he has suggested that the Commission look beyond the numbers and reward staff for good judgement and high-quality work.
Takeaways
These reforms represent an effort to shift toward greater procedural fairness and transparency in SEC enforcement matters. For companies and individuals who may face SEC investigations or enforcement actions:
- Consider early engagement: Don't wait for a Wells Notice to engage with Enforcement staff if you believe they are operating under factual, legal, or programmatic misunderstandings. This engagement can include starting a "White Paper" process or simply requesting time with the staff to discuss the facts and make legal arguments.
- Take White Papers and Wells submissions seriously: Potential respondents and defendants should give serious consideration to sending a White Paper or making a Wells submission when they have an opportunity, as these submissions are shared with the Commissioners and can and do change the trajectory of enforcement actions—not in every case, but in enough cases to matter.
- Expect more disclosure: The Enforcement staff should share more information about potential charges and the evidentiary basis supporting them, enabling more informed and effective responses.
- Plan for adequate response time: The guaranteed four-week minimum timeline provides greater certainty for preparing comprehensive submissions, though as noted above the Enforcement staff may grant reasonable extension requests.
- Understand settlement dynamics: When negotiating settlements that require waivers, expect simultaneous consideration of both components, and be prepared to address each.
Olivia Hussey (White & Case, Associate, New York) contributed to the development of this publication.
1 Keynote Address at the 25th Annual A.A. Sommer, Jr. Lecture on Corporate, Securities, and Financial Law Paul S. Atkins, Chairman (/about/sec-commissioners/paul-s-atkins) Fordham School of Law | Oct. 7, 2025.
2 When the SEC initiates an enforcement action through an administrative proceeding, the entity or individual charged is called the "Respondent" and when the action is brought in federal court, the entity or individual charged is called the "Defendant." Chairman Atkins acknowledged that there are some circumstances in which the Enforcement staff will not send a Wells Notices (e.g., when the staff must recommend a quick action to prevent the dissipation of ill-gotten assets). The Commissioners are informed by the Enforcement staff when the staff does not send a Wells Notice.
3 Law360, SEC Wells Meetings Likely Back On The Table, Official Says (Jan. 28, 2025), found here.
4 An example of a collateral consequence is the loss of the well-known seasoned issuer status for violations of the anti-fraud provisions. 17 CFR § 230.405. The loss of such status delays securities offerings.
5 Press Release, U.S. Sec. & Exch. Comm'n, Statement on Simultaneous Commission Consideration of Settlement Offers and Related Waiver Requests (Sept. 26, 2025), found here.
6 Dep't of Justice, Head of the Criminal Division, Matthew R. Galeotti Delivers Remarks at SIFMA's Anti-Money Laundering and Financial Crimes Conference (May 12, 2025), found here.
White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.
This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
© 2025 White & Case LLP
