SEC Division of Enforcement Publishes Revised Enforcement Manual

On February 24, 2026, the U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement published the first update to its Enforcement Manual in over eight years. The revised manual introduces notable changes to the enforcement procedures followed by the Division’s staff attorneys, with an emphasis on transparency, oversight and greater opportunities for defense advocacy. This client alert summarizes the key changes and their practical significance for companies and individuals navigating SEC investigations. A redline against the previous version of the manual is available here.

Greater Oversight of Wells Notices

Enforcement staff must now obtain the Enforcement Director’s approval before issuing (or declining to issue) a Wells notice, in addition to Associate Director or Unit Chief approval. This added layer of oversight will bring the Director’s attention to the details of potential enforcement actions at an earlier—and often critical—juncture. It may lead to fewer enforcement actions, including because the issuance of a Wells notice is a leverage point in settlement negotiations, and it may yield more resolutions without a Wells notice and its collateral impacts.

Greater Transparency and Access for Wells Recipients

Staff are now encouraged to share “salient, probative evidence” supporting a Wells notice and to make reasonable efforts to allow recipients to review the contents of the investigative file (subject to confidentiality restrictions). The default period for submitting a Wells response has been extended to four weeks, and Wells recipients can generally expect a meeting with the staff, including a supervisor, within four weeks of receipt of the submission. These changes represent a meaningful expansion of the anticipated process for Wells recipients and may facilitate more informed and effective advocacy at the Wells stage.

More Objective Approach to Action Memos

The revised manual requires memos recommending charges to the Commission to include a “comprehensive and objective” explanation of the factual and legal foundations for a recommendation that addresses significant evidentiary issues, litigation risks and key arguments raised in any Wells submissions or White Papers. In addition, White Papers must generally be provided to the Commission, and the staff must explain why any submissions were rejected. This shift toward a more balanced presentation is a noteworthy development for defense practitioners.

Guidance on Effective Wells Submissions

The manual now includes specific guidance on effective Wells submissions. Together with the stated emphasis on objectivity, this guidance aligns with recent public comments from Enforcement Director (and former judge) Margaret A. Ryan, in which she encouraged an approach to Wells submissions and Enforcement recommendations that is more akin to advocacy before a neutral arbiter than to a traditional head of SEC Enforcement—a role that, in the past, was often held by former prosecutors.

Cooperation and Remediation Guidance

The manual provides additional detail on what constitutes effective remediation and cooperation for companies, citing examples such as clawing back executive compensation, making corrective disclosures and retaining independent compliance consultants. The revised manual expressly references the possibility of zero-penalty resolutions for effective cooperation. This express acknowledgment of the potential for no-penalty outcomes underscores the Division’s renewed emphasis on incentivizing meaningful cooperation and is consistent with an approach that seeks to minimize the impacts of corporate penalties on investors.

Clarity on Simultaneous Settlements and Waivers

A new section addresses the Commission’s restored practice of permitting simultaneous consideration of settlement offers and related waiver requests concerning disqualifications and other collateral consequences of a proposed resolution. If a settlement is accepted but the waiver is rejected, the respondent typically has five business days to decide whether to proceed.

Criminal Referral Oversight

Staff must now notify the Division Director and await a response, generally within 48 hours, before making a non-urgent referral to the criminal authorities. In addition, the decision to refer a matter now expressly incorporates consideration of the factors identified in the Commission’s June 2025 Criminal Referral Policy Statement, including harm to investors, potential gain to the defendant and recidivism. These procedural safeguards introduce a measure of deliberateness and oversight to the criminal referral process that was not previously formalized.

Shorter Tolling Agreements

Tolling agreements of up to 90 days require Associate Director or Unit Chief approval, while extensions beyond 90 days require Director or Deputy Director approval, reflecting an ongoing shift away from longer tolling periods. This is consistent with Enforcement Director Ryan’s emphasis in recent public remarks on making investigations shorter and more efficient.

Vulnerable Investors and Resource Allocation

Considerations involving “particularly vulnerable harmed investors” are now an expressly enumerated factor in the Division’s approach to resource allocation. This aligns with an emphasis on retail investors and may signal a focus on investors nearing or in retirement.

Top 5 Matters

The manual introduces “Top 5” priority matters (replacing “National Priority Matters”) and encourages the assignment of two or more staff to those cases. Thus, under certain circumstances, a matter’s staffing may signal the Division’s prioritization of the investigation.

Looking Ahead

The revisions reflect an effort to better inform the public about the Division’s efforts, in addition to updating the Division’s internal processes. “The SEC’s modified Enforcement Manual seeks to clarify, and enhance the public’s understanding of, how we enforce the federal securities laws,” said Director Ryan. “Our updates to the Enforcement Manual ensure greater uniformity, reflect the Division’s best practices, and improve our staff’s ability to carry out the mission-critical work they do on behalf of investors.”

Going forward, the SEC anticipates updating the manual annually, with an emphasis on transparency and fair play. “This is an important and long-overdue step that builds on the Division of Enforcement’s commitment to transparency, fairness, and process while ensuring it remains able to fulfill its mission,” said SEC Chairman Paul S. Atkins. “I applaud Judge Ryan’s and the staff’s work on revisions to the manual and their commitment to a continued review of the manual going forward to ensure its procedures remain current, effective, and relevant.”