You’re never risking jail time with the SEC. They’re civil enforcement so they can only pursue fines and injunctions.

Like all civil matters, a person can negotiate with the (allegedly) aggrieved party, in this case the SEC, and settle the matter with them before a suit is filed.

> You’re never risking jail time with the SEC.

That's not true.

> They’re civil enforcement so they can only pursue fines and injunctions

A lot of SEC things are both civil and criminal, and while the SEC doesn't file criminal charges, it does send referrals to DOJ. So, yes, though there are more steps before it gets to jail time, disputes with the SEC do carry that risk.

I think you misunderstood my question. Let's say the SEC tells you "don't do X or we will sue you" but you believe that the SEC's request is invalid for whatever reason. Is there a way to get a judge to decide on whether you are right, before you do X and get sued?

> Let's say the SEC tells you "don't do X or we will sue you" but you believe that the SEC's request is invalid for whatever reason. Is there a way to get a judge to decide on whether you are right, before you do X and get sued?

I believe you can file an action seeking a declaratory judgement, but as I understand there is generally little reason: a Wells Notice is not, as I understand it, a “we might sue you if you do X” thing but more of “our staff have determined you have done X and that we should sue you for it on basis Y, but you have an opportunity to submit a legal brief to convince us that our staff are wrong before we approve their recommendation” thing.

Ok thanks, that's more clear.