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SEC Drops 20% Of Probes After 'Wells Notice'

Publication Date: 
October 09, 2013
The Wall Street Journal
Jean Eaglesham

Stanford Law Professor and former SEC commissioner Joseph Grundfest is quoted on the high number of SEC investigations left unpursued in The Wall Street Journal. 

About 20% of the people who were warned over a two-year period that they might be sued by U.S. regulators for allegedly violating securities law ended up not facing charges, government figures show.

The previously undisclosed numbers track the Securities and Exchange Commission's use of a powerful enforcement tool—called a Wells notice—to alert people that the agency might take enforcement action.


Stanford University law professor Joseph Grundfest said he expected the percentage to be lower than 20% based on what he saw as an SEC commissioner from 1985 to 1990.