The US Securities and Exchange Commission (SEC) issued its first Enforcement Manual update since 2017 on February 2026. The update answers years of defense‑bar criticism about inconsistent Wells timing, limited transparency into the Division of Enforcement’s record and the value of cooperation, and uneven practices across offices. The revisions set clearer expectations for Wells submissions and meetings, explain how cooperation can influence penalties, and reaffirm that the timing of SEC’s consideration of settlements will be aligned with related waiver requests. At the same time, the update preserves meaningful discretion: staff can shorten timelines, limit access to materials, and deviate from the stated cadence when circumstances warrant. The result is a framework largely consistent with prior practice but more structured and visible—still ultimately staff‑directed and, therefore, variable depending on who leads the Commission and its Division of Enforcement.
Wells Process: A More Structured—but Still Staff‑Controlled—System
The most visible changes involve the Wells process. The Manual now provides a default rhythm that may be enforced. Wells recipients will ordinarily have four weeks to submit a response, that the staff will ordinarily schedule the Wells meeting within four weeks after receiving the submission, and that senior leadership for the Division of Enforcement will participate in that meeting. The Manual also adds new guidance that signals what the staff (and apparently Judge Ryan) actually wants to see—focused submissions that engage with just the facts and legal theories that matter, not everything that could be said. Notably, the language appears to reflect the quickly formed opinion, and perhaps even frustration, by the Division of Enforcement’s new leadership that Wells recipients frequently respond broadly rather than focus on the facts and legal theories that truly drive the prospective recommendation.
In addition to the views of the Division of Enforcement’s new leadership, the updates to the manual reflect long‑standing practitioner frustrations—Wells recipients have repeatedly sought more time to prepare, greater transparency into the evidentiary record supporting the contemplated charges, and a reliable path to senior decision‑makers. On paper, the update delivers all three. But the qualifier “ordinarily” does important work: it preserves ample room for staff to compress deadlines, accelerate meetings, or depart from the stated cadence whenever they believe circumstances warrant. In matters involving parallel criminal exposure, cross‑border evidence, or extensive data and forensic work, counsel may still encounter shifting expectations—now simply framed against a more formal baseline.
In sum, the revisions respond to those concerns—on paper—but the Manual’s structure continues to vest staff with full discretion over pacing and process. And because the SEC has now articulated a clear default timeline, the Division of Enforcement may begin enforcing it more rigorously internally, which could make the Wells stage faster overall. But what speeds up for the agency may tighten for respondents: less room for informal extensions, less time to engage with the record, and less flexibility to shape the process to the context of a complex investigation.
Access to the Investigative Record
Alongside timing, the Manual reinforces something else counsel have pushed for: a more meaningful look at the record at the Wells stage. Think targeted transcripts and key documents, enough to enable a genuine, informed dialogue rather than a debate in the abstract. But access remains a judgment call. Case‑specific considerations will still determine what is shared, when, and how. For example, staff may withhold materials based on confidentiality obligations, concerns about ongoing investigative steps, or a judgment that providing a particular document is not appropriate at that stage. The expectation of transparency is higher; the entitlement is not.
Be Careful What You Wish For
At the same time, respondents must be mindful that structural reforms come with tradeoffs. Historically, the Wells stage has often dragged. If the Division of Enforcement treats the newly articulated schedule as genuinely enforceable internally, Wells reviews may move faster and become more predictable. But that acceleration comes with pressure: respondents may have to fit their analysis, drafting, and advocacy into a tighter window, without the informal extensions practitioners once relied on. Put differently, the SEC has transformed the Wells stage from a loosely negotiated endgame into something closer to a structured, quasi‑procedural step. Predictability may increase, but potentially at the cost of meaningful flexibility and counsel’s ability to influence the pace at the very point in the process where delays were once common. And the weight of a set timeline may grow even heavier depending on how aggressively the SEC’s leadership chooses to apply it.
Cooperation: More Transparency, Not More Certainty
The Manual also expands on cooperation, offering a clearer description of how staff weighs factors such as timeliness, completeness, remediation, and practical assistance when assessing whether and how to recommend cooperation credit. This added detail responds to the defense bar’s long‑standing frustration with opaque standards and inconsistent explanations of what cooperation actually means in practice. But while the SEC has now said more, it has not promised more. There are no tiers, no fixed credits, no declination grid, and no quantifiable scales—nothing resembling the DOJ’s more structured approach. Cooperation remains a qualitative, case‑by‑case judgment, rooted in staff assessments of whether the party’s efforts genuinely advanced the investigation.
In that sense, the SEC has chosen to explain more without committing more. The bar gets increased visibility into the factors the Division of Enforcement considers, but staff retains full discretion to determine whether a party’s actions merit any cooperation credit at all—and how much. The result is a process that is clearer in description yet unchanged in substance: cooperation remains a flexible tool fully controlled by the Division of Enforcement, not a defined incentive system on which respondents can reliably plan.
Settlements and Simultaneous Consideration of Waiver Requests
The update also largely codifies the policy allowing settling parties to request simultaneous consideration of a settlement offer and any related waiver (such as a WKSI waiver or “bad actor” waiver). This formalizes a change made earlier by the Commission addressing complaints that disaggregating settlement and waiver decisions created unnecessary uncertainty and risk.
In practice, however, this shift largely formalizes what parties were already doing. Even under the separated process, respondents always had the practical ability to walk away from a settlement if the Commission denied a necessary waiver. The update streamlines the process and reduces some of the friction that had developed in recent years, but it doesn’t change underlying leverage dynamics. And, as with the Wells process, the Division preserves flexibility: simultaneous consideration is now “the practice,” but nothing prevents the Commission or staff from sequencing decisions differently when circumstances demand.
Takeaways
The 2026 Manual update is best understood as a codification of norms shaped heavily by years of defense‑bar criticism, paired with a deliberate preservation of Commission and staff discretion. It brings clearer expectations, a more structured Wells process, expanded transparency around cooperation credit (including how timeliness, completeness, remediation, and practical assistance may factor into penalty recommendations), and a formal acknowledgment that settlement decisions and related waivers will typically be considered together at the same Closed Commission Meeting. But respondents should not assume these refinements amount to significant substantive changes that will routinely provide greater rights, more preparation time, or increased negotiating leverage.
In practice, the newly stated Wells timeline may cause the process to move faster, particularly if internal enforcement of the schedule tightens under certain Commission leadership. That acceleration could leave respondents with less room for extensions or tactical pacing at exactly the point in the investigation where delays were once common. Likewise, while access to the evidentiary record may be more readily offered, such transparency will still occur only when and to the extent the Division of Enforcement deems it appropriate. And although simultaneous consideration of settlements and waivers is now explicitly recognized, it largely memorializes a longstanding practical reality: meaningful settlements have almost always been conditioned on the availability of the necessary waiver, regardless of whether the votes were formally taken together or on separate tracks.
The approach to cooperation follows the same pattern. The Manual clarifies how the Division of Enforcement evaluates cooperation and the circumstances under which it may influence penalties, but it does not introduce tiers, fixed credits, or a declination grid. Cooperation remains a qualitative, case‑specific assessment, with discretion remaining central. It does not provide what many in the bar want: DOJ-style comparables data that can be articulated in detail to a client and argued in settlement negotiations.
In short, the SEC heard the bar’s complaints and addressed them—but on terms that may not be completely satisfying and keep ultimate flexibility in the Division of Enforcement’s hands. Decisions about timing, transparency, cooperation credit, and the sequencing of settlements and waivers continue to rest on judgment calls that often turn on subjective, fact‑specific circumstances. The gains are real, but so are the guardrails. And as the defense bar knows well, a more structured process can be a double‑edged sword: if the Wells timeline is applied more rigorously internally, matters may indeed move more quickly—but predictability may come at the cost of the flexibility respondents once valued, especially under more aggressive enforcement leadership.
