On February 24, 2026, the SEC’s Division of Enforcement announced significant updates to its Enforcement Manual—the first major revision since 2017—framed as a push for fairness, transparency, consistency, and efficiency in investigations.
Here’s the SEC press release
For public companies, regulated firms, and executives, the practical takeaway is straightforward: the SEC is standardizing key process steps (especially around Wells notices), tightening internal consistency, and making investigation timelines more predictable—without signaling that enforcement is going away.
Why this matters
Most enforcement pain isn’t just about the outcome—it’s about uncertainty:
- unclear timelines,
- uneven process from office to office,
- and limited visibility into how staff will weigh facts, cooperation, and settlement posture.
The SEC says these updates are intended to improve uniformity and efficiency and will be reviewed yearly going forward.
1) A more uniform Wells process (the biggest operational change)
A “Wells notice” is the SEC staff’s notice that they are considering recommending enforcement action and giving the recipient an opportunity to respond.
The updated manual emphasizes open, informed dialogue and sets clearer timing expectations:
- Four weeks is now the ordinary period for a Wells submission (many matters historically ran on shorter timelines).
- Wells meetings will be scheduled within four weeks after the SEC receives the Wells submission, and will include a member of senior leadership in the Division.
- The SEC also added guidance on what makes a Wells submission most useful to staff and the Commission (i.e., sharpening the “how to be heard” aspect of the process).
What this means in practice: companies and executives should treat a Wells notice less like an ad hoc scramble and more like a structured “mini-proceeding”—with a predictable window to assemble facts, legal framing, remediation evidence, and settlement posture.
2) Settlement and waiver requests can be considered at the same time
The SEC’s updated manual reflects that the Commission has “restored” a prior practice: allowing a settling party to request simultaneous consideration of:
- an offer of settlement, and
- a related request for a Commission waiver from automatic disqualifications or other collateral consequences tied to the enforcement action.
This matters because many regulated firms (and capital markets participants) worry less about the headline settlement and more about collateral consequences—eligibility impacts, disqualifications, and knock-on effects that can be business-threatening.
Why it’s meaningful: the SEC is explicitly framing this as a way to improve transparency and conserve resources by letting parties understand the “full cost” of settlement sooner.
3) A clearer cooperation framework (including civil penalty impact)
The SEC also highlighted updates that “detail the Division’s framework for evaluating cooperation,” including how cooperation may affect civil penalties.
Why this matters: “cooperation” often gets discussed vaguely. More formalized criteria can help counsel and management make earlier, more disciplined decisions around internal investigations, productions, remediation, and self-reporting posture.
4) Other process changes: internal collaboration, formal orders, and criminal referrals
Beyond Wells and settlement/waivers, the SEC flagged additional updates that are likely to influence the rhythm of investigations:
- steps intended to encourage more consistent internal collaboration within Enforcement,
- updates regarding the formal order process (often central to subpoena authority and scope),
- an updated framework for referrals to criminal authorities, and
- other changes aimed at reflecting “current best practices” within the Division.
And importantly: the manual will be reviewed annually going forward—suggesting this is not a one-off rewrite, but an ongoing effort to institutionalize process updates.
Practical implications for issuers and executives
A) Build a “Wells-ready” playbook before you need it
If you’re a public company (or a company that operates in regulated capital markets), you want:
- a standing escalation protocol,
- an internal investigation workflow,
- a document preservation and collection plan,
- and a communications discipline plan (internal + external).
The four-week Wells window is helpful—but only if your house is organized enough to use it strategically.
B) Expect more structured engagement—and be prepared to meet it with substance
The SEC is explicitly emphasizing “open, informed dialogue.” That rewards parties who can bring:
- clean timelines,
- credible documentary support,
- and evidence of remediation and controls.
C) Treat collateral consequences as a first-class issue early
If waivers/disqualifications could materially affect your business, this update reinforces that settlement strategy should be built with collateral consequences front and center—not as an afterthought.
Bottom line
The SEC’s 2026 Enforcement Manual updates are best read as a process modernization—particularly around Wells notices, settlement + waiver coordination, and cooperation evaluation—aimed at greater uniformity and transparency.
For companies, the message is: enforcement engagement is becoming more standardized. The winners will be issuers and management teams with disciplined compliance, documentable controls, and investor-grade financial communication—because those same disciplines reduce both enforcement risk and enforcement friction.
If you want, I can adapt this into a DiedrichCo-branded version with a closing section on how you help clients stay “investigation-ready” through clean reporting, disclosure consistency, and governance/corporate-record discipline (without turning it into legal advice).