SEC announces significant updates to Enforcement Manual: Key changes

The United States Securities and Exchange Commission (SEC)’s Division of Enforcement has announced significant updates to its Enforcement Manual, which had not been revised since 2017.

In the announcement on February 24, 2026, SEC Chairman Paul S. Atkins characterized the updates as “an important and long-overdue step that builds on the Division of Enforcement's commitment to transparency, fairness, and process.” The Commission also announced that the Enforcement Manual will undergo yearly reviews going forward.

In this alert, we detail key changes to the Enforcement Manual and provide takeaways.

Key changes

• Standardized Wells process: The updated Enforcement Manual emphasizes the importance of open, informed, and thoughtful dialogue between SEC staff and potential respondents and defendants, with the goal of producing better outcomes and ensuring the fair and timely resolution of investigations. Under the revised framework, recipients of a Wells notice – which informs a party that the staff has made a preliminary decision to recommend an enforcement action – will ordinarily receive four weeks to make Wells submissions to the Commission. The update also provides guidance on what makes a Wells submission most helpful to the staff and the Commission, including a list of topics for parties to address in their submissions. Following the submission, Wells meetings will be scheduled within four weeks of receipt of the Wells submission and will include a member of senior leadership within the Division of Enforcement. According to Division of Enforcement Director Margaret A. Ryan, a “compelling” response by parties facing a Wells notice could be the difference between whether commissioners vote to approve an enforcement action. Commission approval of an enforcement action is a multi-step process in which SEC staff present their findings and recommendations to the Commission, which then votes to authorize, modify, or decline the proposed action.
  
  
• Simultaneous settlement and waiver consideration: The updated Enforcement Manual reflects that the Commission has restored its prior practice of permitting a settling party to request that the Commission simultaneously consider 1) an offer of settlement and 2) any related request for a Commission waiver from automatic disqualifications and other collateral consequences that result from the underlying enforcement action. This restored practice provides potential parties with greater visibility into the collateral effects of a settlement and is intended to conserve Commission resources and enhance the transparency of its processes.
  
  
• Cooperation framework: The updated Enforcement Manual details the Division’s framework for evaluating cooperation, including the impact of cooperation on civil penalties. This includes a detailed framework for how the SEC’s staff will consider cooperation in possibly reducing recommended penalties.

The revised manual also includes changes intended to encourage more consistent internal collaboration, updates regarding the formal order process, an updated framework for referrals to criminal authorities, and additional changes intended to conform the Enforcement Manual to the current best practices within the Division.

Takeaways

These updates signal a shift in the SEC’s enforcement approach under Chairman Atkins’s leadership. The standardization of the Wells process – with defined response periods and guaranteed meetings with senior leadership – provides greater predictability for companies and individuals facing potential enforcement actions.

Notably, these changes will also give parties more time to make Wells submissions than previously allowed in many cases, in addition to ensuring the involvement of senior leadership at Wells meetings. The restoration of simultaneous waiver consideration is particularly significant for regulated entities, as it allows parties to understand the full scope of collateral consequences before agreeing to settle an enforcement action.

Companies and individuals under SEC investigation are encouraged to consider how these changes may affect their engagement with the Division of Enforcement, particularly with respect to Wells submissions and settlement negotiations.

For more information, please contact the authors.