EIGHTH ANNUAL A.A. SOMMER, JR. LECTURE ON CORPORATE, SECURITIES, AND FINANCIAL LAW[dagger], THE

Fordham Journal of Corporate & Financial Law, 2008 by Treanor, William Michael, Indek, Ben A, Fisch, Jill E, Atkins, Paul S

The Wells Committee did not conduct extensive independent research and analysis. Instead, the Committee solicited comment from "persons outside the Commission who were affected by the Commission's enforcement activities."88 The Committee started its work in January 1972, and published a report with forty-three recommendations for the Commission in June of the same year.89 Although some believe the Wells Committee specifically recommended a standalone enforcement division, that is not true. Chairman casey, on his own initiative-but apparently with the advice of the Wells Committee-created the Enforcement Division shortly after the Wells Committee report was published.90 Depending on whom you listen to, Chairman casey was either trying to build a national, high-profile enforcement program or he was simply trying to get Irv Pollack91 out of the regulation business. No matter the reason, few would say that the move was a bad one.

The most obvious product of the Wells Committee's efforts was the sec's adoption of a formal "Wells process."92 As most or all of you know, the Wells process allows for respondents in sec proceedings to submit a writing-essentially a brief-to the Commission and its staff after the staffs investigation is completed, but before the staff has made a recommendation to the Commission.93 In many ways, these "Wells Submissions," operate as a last clear chance for respondents to persuade the staff that an enforcement recommendation is not warranted. If that fails, the Wells Submissions are submitted to the Commission, along with a staff recommendation memorandum, so respondents are assured that the Commission has both sides of the story when it considers a recommendation in a contested matter.94

As an aside, believe it or not, when I returned to the SEC as a commissioner after eight years back in the private sector, the practice had developed of not providing commissioners with Wells Submissions in settled cases. At the time, I was wondering why these materials for our closed Commission enforcement meetings had grown so thin! Well, I changed that practice right away, at least with respect to my own office, and asked for all Wells Submissions and all substantive correspondence that is functionally equivalent to Wells Submissions. It is very helpful to understand the evidence and the positions of all parties in the case, so I believe that the whole Commission should read Wells submissions even in settled matters.

The appellation "Wells submission" suggests that the Wells Committee conceived the idea of allowing a respondent to submit a brief with opposing views before final Commission action. However, the real credit for this process should go to former Chairman Hamer Budge95 (who was also called Judge Budge from his service on the bench before he came to the SEC) and his fellow Commissioners.96 So, instead of a "Wells Submission," we could call it a "Judge Budge Brief." A "Wells that Smells" because of shading facts or bad arguments could become a "Budge Fudge." A "Swell Wells," on the other hand, could become a "Budge Nudge," because it nudges the Commission in a different direction. A truly exceptional one could be called a "Hamer Famer" because of its fame and acclaim. A really long Wells-a "Hell's Wells," -would be a "Budge Trudge," because it takes so long to get through it.