SEC Enforcement Manual 2026 update: One key takeaway and several process changes

On February 24, 2026, the Division of Enforcement of the Securities and Exchange Commission (SEC) announced a broad set of revisions to its Enforcement Manual, last updated in 2017.¹ The SEC will now review and refresh the Manual annually, signaling a sustained commitment to refining how Enforcement conducts investigations and evaluates charging decisions. Most notably, the 2026 updates place heightened and more structured emphasis on cooperation, clarifying what the SEC expects from companies seeking cooperation credit and how that credit may influence enforcement outcomes in practice.

Key Takeaway (cooperation credit in SEC investigations—what companies can do—and what they can get)

The key takeaway that may fundamentally change how companies conduct themselves before and during investigations involves the expansion and restructuring of the SEC’s cooperation framework. A newly created Cooperation Committee must approve recommendations for cooperation agreements, Deferred Prosecution Agreements, Non-Prosecution Agreements, and immunity requests before they go to the Commission—adding a governance layer not present in the 2017 Manual. Cooperation is not automatic and not formulaic; rather, the SEC will evaluate cooperation on a case-by-case basis based on the unique facts and circumstances of every enforcement matter. It is important to emphasize that mere compliance with subpoenas for documents or testimony does not qualify as cooperation and will not result in staff recommending credit. To potentially receive cooperation credit, the SEC emphasized the following:

• Self-Policing (before misconduct is discovered)
  • Effective self-policing through robust compliance procedures, training, and appropriate tone at the top can mitigate enforcement outcomes if violations ultimately occur.
• Self-Reporting (once misconduct is discovered)
  • Promptly report misconduct to the SEC before the staff learns of it from other sources and prior to any imminent threat of disclosure or government investigation.
  • Conduct a thorough internal investigation reviewing the nature, extent, origins, and consequences of the misconduct.
  • Provide complete and accurate disclosures to the SEC and other regulators, as appropriate.
• Remediation (correcting the problem)
  • Effective remediation includes dismissing or appropriately disciplining wrongdoers, modifying and improving internal controls and procedures to prevent recurrence, and appropriately compensating those adversely affected. 
• Active Cooperation (during the investigation)
  • Actively cooperating during investigations includes providing the staff with all factual information relevant to the underlying violations and the company’s remedial efforts, going beyond what is required by law, on a timely basis.
  • Examples include: 
    • voluntarily providing non-privileged factual information;
    • summarizing factual findings from internal investigations, summarizing interviews of witnesses located abroad, and identifying key documents and witnesses; and
    • facilitating voluntary interviews of witnesses, including encouraging employee cooperation and making witnesses available.
• The Outcome (after the investigation) 
  • If companies receive credit for cooperation, it may result in no enforcement action, reduced or narrower charges, a deferred prosecution agreement, a non-prosecution agreement, or reduced or no penalties in a settlement. 
  • The SEC may include favorable language in SEC orders or press releases summarizing the specific cooperation and remedial steps in the order or charging documents. 
• Overall Message (if you want the SEC to consider awarding cooperation credit)
  • Start thinking about cooperation before the SEC calls.
  • Document cooperation efforts carefully.
  • Align internal investigation strategy with cooperation goals.

Process Changes (other changes important for companies and individuals to know about as they go through an investigation)

• The Wells Process
  • A Wells notice is issued only after staff, including an Associate Director or Unit Chief, has reviewed the investigative record, proposed charges, and potential sanctions.
  • The staff should identify salient, probative evidence supporting proposed charges, particularly evidence the recipient may not already know.
  • The staff will provide greater access to the investigative file, evaluating whether providing access would help the recipient respond meaningfully and help both sides assess the strength of the evidence. 
  • Enforcement staff will generally allow four weeks for Wells submissions.
  • Written submissions are generally limited to 40 pages (excluding exhibits); video submissions are limited to 12 minutes. 
• Post Wells Meetings
  • Post Wells meetings must occur within a reasonable time and no later than four weeks after submission, with a senior Enforcement official (Associate Director level or above) participating.
  • These meetings should be treated as a final opportunity to influence staff recommendations.
• Settlements and Waivers
  • The SEC again permits simultaneous Commission consideration of settlements and related waiver requests. If a settlement is approved but a waiver is denied, respondents must promptly decide whether to proceed.
  • Here is an important defense takeaway: Integrate the waiver strategy into settlement negotiations from the outset.
• Termination Notices: Approval requirements for decisions not to issue termination letters have expanded. The staff is encouraged to send termination letters to parties that made substantial productions.
• Document Preservation Letters: A new section directs the staff to issue preservation letters early, covering all documents, including electronic communications, messaging platforms, and personal devices, with written acknowledgment required. 
• Criminal Referrals: The Manual formalizes the criteria and approval levels for criminal referrals, emphasizing egregious conduct, recidivism, and investor harm.
• Investor Engagement: In a new section, the staff is instructed to proactively engage with harmed investors and document all contacts. 

Conclusion

The 2026 revisions to the Enforcement Manual reflect a meaningful evolution in how the SEC evaluates cooperation and exercises enforcement discretion. By standardizing key timelines, expanding and restructuring cooperation guidance, and clarifying procedures around Wells practice, criminal referrals, and document preservation, the SEC is signaling a clear increased focus on rewarding early, substantive, and proactive engagement by respondents as part of a more consistent and transparent enforcement framework. The addition of new sections—such as those addressing investor engagement and the preservation of electronic communications—further underscores the Division’s effort to align its practices with contemporary communication methods and current investor protection priorities.

As the SEC transitions to annual updates of the Manual, companies may want to closely monitor how the SEC applies its expanded cooperation framework in practice. In addition, companies should consider proactively assessing whether their compliance programs, investigative response plans, and cooperation strategies are positioned to receive meaningful credit in future investigations.
__________

If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.

_{1 https://www.sec.gov/newsroom/press-releases/2026-20-secs-division-enforcement-announces-updates-enforcement-manual}