This post has been prepared by my partner John H. Sturc.

The SEC’s Division of Enforcement recently issued its first-ever manual. Intended as a reference for Enforcement Division staff, the Manual provides important insight into SEC decision-making and processes on such key matters as evaluating possible investigations, opening and closing matters, issuing Wells letters, communicating with senior SEC officials, responding to document subpoenas, “witness assurance” letters, contacting current and former employees, and respecting the attorney-client privilege during an investigation. It will be an essential guide for anyone with a matter before the Division of Enforcement.

The Manual memorializes in one place staff policies that have developed over decades but which were applied principally on the basis of oral tradition or internal, unpublished memoranda. A few highlights of the Manual follow. The full text is available on the SEC website here.

Purpose and Scope

The Enforcement Manual is designed as a reference for Division of Enforcement staff. The Manual states that it is “not intended to, does not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law by any party in any matter civil or criminal.” Nevertheless, the Manual serves two very useful purposes. First, it informs persons requested to provide information to the SEC staff of the staff’s expectations. Second, it also provides boundaries that, for the first time, publicly define normative behavior for the SEC staff itself and that potential reviewing courts can use to determine whether agency action is appropriate, whether under an “arbitrary and capricious” or other standard of legal review.

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