What is a Wells Notice from FINRA?
A Financial Industry Regulatory Authority (FINRA) Wells Notice notifies you or your company of charges FINRA intends to bring against you and/or your company for engaging in unlawful activity. The Notice is very serious and needs to be addressed immediately.
A Wells Notice is a notification from FINRA that informs you or your company that FINRA’s enforcement branch plans to bring a civil action against you and/or your company alleging that you and/or your company engaged in unlawful conduct such as securities fraud.
The Wells Notice is a preliminary step that FINRA is required to take before FINRA decides to move forward with official charges against you and/or your company.
In other words, a Wells Notice is an invitation that allows you to respond to the charges that are being contemplated against you and/or your company.
This response to the Wells Notice is called a “Wells Response” or “Wells Submission.” A Wells Submission is a brief written statement that you and/or your company submit to FINRA explaining your side of the story regarding the charges.
The Wells Notice does not mean that you are guilty of the charges. It is instead an opportunity to explain to FINRA why FINRA should not bring such charges or why FINRA is contemplating bringing charges based on inaccurate and/or untrue facts.
What Should I Do If I Receive a Wells Notice from FINRA?
Receiving a Wells Notice from FINRA is an extremely serious and important matter. It should be addressed immediately.
FINRA is a regulatory agency that investigates and brings charges against individuals and companies for engaging in unlawful activity such as securities fraud.
FINRA’s enforcement division is responsible for bringing charges against individuals and companies that engage in unlawful conduct.
The Wells Notice is sent to you at the preliminary stage of the investigation. This allows you an opportunity to present your side of the story to FINRA so that it can consider your side of the story before moving forward with the charges.
The Wells Notice is a critical opportunity for you and/or your company to explain to FINRA why FINRA should not bring the charges, which charges FINRA should not bring, and/or why FINRA has mistakenly interpreted facts.
A Wells Notice should be taken seriously and responded to imminently. Take the first step in resolving the matter by hiring legal counsel with experience in FINRA matters.
What Happens If I Don’t Respond to the Wells Notice?
As mentioned above, FINRA will not bring the charges against you and/or your company immediately. The Wells Notice is a preliminary step.
If you do not respond to the Wells Notice, FINRA will interpret this as a sign that you and/or your company are guilty of the charges.
Therefore, you should always respond to the Wells Notice and provide your side of the story, especially if you are innocent of the charges.
What Should I Write in My Wells Submission?
A Wells Submission is a formal document that presents your side of the story to FINRA.
The Wells Submission gives you an opportunity to explain to FINRA why it should not bring the charges it is contemplating against you and/or your company.
The Wells Submission is an invitation and opportunity to demonstrate to FINRA that the wrongful conduct it is accusing you of is wrong, based on inaccurate facts, or otherwise untrue.
Wells Submissions are typically drafted by legal counsel. Many individuals and companies retain an attorney when they receive a Wells Notice.
It is important to note that the reason the Wells Submission is so important is because FINRA is required to provide you with an opportunity to be heard.
If you do not submit a Wells Submission, FINRA will not have anything to read from your side of the story. This makes it very likely that FINRA will move forward with the charges.
Some reasons why you should consider submitting a Wells Submission include the following:
- If you do not submit a Wells Submission, FINRA will not have anything to consider from you and will likely assume that you are guilty
- A Wells Submission could persuade FINRA not to move forward with the charges or to bring fewer charges
- A Wells Submission could demonstrate to FINRA why the facts it has are inaccurate, misleading, or untrue
- A Wells Submission could convince FINRA that its charges against you and/or your company are not worth the time and resources to pursue
- A Wells Submission could protect against negative media coverage and other harmful publicity that could result if FINRA brings charges against you and/or your company
- A Wells Submission could help preserve your reputation because FINRA is required to consider your side of the story before filing the charges
When you do receive a Wells Notice, you should contact an attorney who has experience dealing with FINRA. An attorney will draft and submit the Wells Submission on your behalf and protect your rights throughout the process.
Do I Need an Attorney?
Receiving a Wells Notice from FINRA is a very serious matter. It means that FINRA’s enforcement branch is contemplating charging you and/or your company with a civil action for engaging in unlawful conduct.
When you receive a Wells Notice, it is a sign that FINRA is required to give you an opportunity to explain your side of the story.
The Wells Notice allows you and/or your company to respond to FINRA by submitting a Wells Submission. The Wells Submission is your chance to convince FINRA not to move forward with the charges.
A Wells Submission is a formal document. It is usually drafted by legal counsel. You should consider hiring an attorney who has experience dealing with FINRA.
An attorney can help you navigate through the FINRA process and protect your rights. An attorney can also explain to you the steps in the FINRA process and what to expect next.
It is important to take the Wells Notice very seriously. If you do not respond to the Wells Notice, FINRA will likely assume you are guilty of the charges and move forward with the charges.
