Last week on LinkedIn, John Reed Stark shared his perspective on the SEC Enforcement Division’s latest updates to its Enforcement Manual. I think it’s safe to say that he’s a fan. And his post is a helpful explanation for corporate attorneys who may be wondering what the changes really mean in practice. He specifically highlights Section 2.3.

[Section 2.3] directs staff, subject to confidentiality constraints, to inform Wells notice recipients of ‘salient, probative evidence’ that the staff ‘should have reason to believe may not be known to the recipient.’

Staff are further instructed to be ‘forthcoming’ about the contents of the investigative file and, on a case-by-case basis, to ‘make reasonable efforts’ to allow recipients to review relevant portions.”

He notes that the SEC Staff was operating without a formalized policy or uniform practice of sharing relevant evidence with counsel before recommending a civil action to the Commissioners. He calls this a “foundational shift.”

– Meredith Ervine