‘Pencils Down’ for Some, Business as Usual for Others
James Lundy of Foley & Lardner LLP described clients split between those who froze all production and those who kept sending documents into the void, unsure if anyone at the SEC was present to read them.
“I’m not rushing them today or tomorrow,” Lundy said, noting that outreach will likely begin next week.
Those Under Investigation May Need to Move Quickly
Jay Dubow of Troutman Pepper Locke LLP warned that individuals and companies under investigation before the shutdown — but who had not yet been threatened with litigation — may need to accelerate their defense strategies now that the agency is back in motion.
A Wells notice, he noted, triggers disclosure obligations for public companies and starts the countdown for the SEC’s response timeline.
But staff has more wiggle room if the notice hasn’t been issued.
“In some cases, staff may consider a pre-Wells discussion or a white paper,” Dubow said — a more flexible, narrative-style submission aimed at dissuading the SEC from pursuing an enforcement action.
