We recently discussed the Wells Process, that procedural crossroads where advocacy and enforcement meet. And as it turns out, what’s old is new—and newly open—again. Under Chair Paul Atkins, the SEC has begun to revisit an idea first floated nearly two decades ago: the “open jacket policy”—a term that, in all my years as both an SEC Trial Attorney and SEC defense counsel, I had never once heard anyone at the SEC actually say out loud.

Back in 2008, long before the phrase started making the rounds again at SEC Speaks 2025, Atkins proposed a simple but radical concept for the Commission’s Division of Enforcement: before recommending an enforcement action, the staff should share its investigative file—including exculpatory evidence—with defense counsel. Notably, Chair Atkins called it not only efficient but moral. As he put it:

“One item that I would like to see in that manual is a written and uniform ‘open jacket’ policy for Enforcement matters. That means the government shows defense counsel the evidence it has against the defendant. That is called due process.”

He elaborated:

“If we have a strong case and feel we can win in court… should we not be open with our evidence? We should take every step to apply this policy across all the regions and headquarters—not only because it works, but because it is the right thing to do.”

That philosophy—what Atkins once called “the essence of due process”—has reemerged as the Atkins Commission signals a renewed commitment to transparency in enforcement proceedings

From Brady to the SEC: Where the Analogy Fits—and Where It Doesn’t

Atkins’ “Open Jacket” proposal borrows its moral center from the Brady doctrine, a creature of criminal law and procedure, named after the Supreme Court’s 1963 landmark decision in Brady v. Maryland. There, the Court held that due process is violated when prosecutors withhold evidence favorable to the accused. As Justice Douglas wrote for the Court, “Our system of the administration of justice suffers when any accused is treated unfairly.”

Subsequent cases—Napue v. Illinois and Giglio v. United States—expanded that duty to include impeachment and credibility evidence. Collectively, these cases reflect a simple truth: justice requires transparency, even when that transparency is inconvenient.

But here’s the catch: Brady and its progeny apply only to criminal prosecutions, not civil enforcement. And, despite Chair Atkins’ appeal to such disclosure as essential to “due process,” courts have repeatedly declined to extend those protections to SEC cases.

In SEC v. Watson, 2025 U.S. Dist. LEXIS 124166 (S.D.N.Y. June 30, 2025), the Southern District of New York squarely rejected a defendant’s claim that the SEC violated Brady by withholding exculpatory material:

“The Brady Rule requires the disclosure to a criminal defendant of any exculpatory evidence possessed by the government, but Brady is inapplicable where, as here, the SEC’s claims are brought in a civil suit brought by the SEC in federal court.”

The court cited earlier precedent from SEC v. Pentagon Capital Management PLC and reasoned that defendants in SEC civil enforcement actions already enjoy broad discovery rights, eliminating the need for Brady-style protections.

That logic is tidy—but it ignores the reality of modern enforcement. SEC actions may be civil in name, but their consequences often rival criminal sanctions in severity: significant financial penalties, injunctions, lifetime bars, reputational ruin, and lost livelihoods.

The Enforcement Manual’s Ambivalent Middle Ground

The SEC’s Enforcement Manual gestures toward Brady but ultimately retreats from it. The Manual provides:

“The Division of Enforcement must make available to respondents certain documents obtained prior to the institution of proceedings… However, this does not impose an affirmative duty to disclose all exculpatory evidence.”

Notably, the Manual adds that, “This power to withhold does not authorize the Division of Enforcement to withhold, contrary to the doctrine of Brady v. Maryland, documents that contain material exculpatory evidence.”

But it immediately limits this with a familiar caveat:

“The Manual is intended to provide guidance only to the staff of the Division. It is not intended to create any rights, substantive or procedural, enforceable at law by any party.”

In practice, that means disclosure is entirely discretionary, meaning staff can withhold exculpatory evidence from defense counsel. Whether defense counsel sees the evidence depends on the staff attorney’s judgment—and, increasingly, on the prevailing philosophy of the Commission itself. And while this evidence can be (read: should be) requested during Rule 26 discovery, that does not help a defendant who wishes to fend off an enforcement action in the first instance, which would be easier to do with exculpatory evidence in hand.  This is a point the Watson court missed, as the mere filing of an SEC enforcement action alleging misconduct by a defendant could result in serious reputational harm, loss of employment, and the like.

Why the Open Jacket Debate Matters Now

Recent commentary from enforcement leaders suggests that the pendulum may be swinging back toward transparency. During SEC Speaks 2025, Deputy Enforcement Director Antonia Apps endorsed a “more open and informed dialogue” with defense counsel, emphasizing that staff should, wherever possible, share transcripts, exhibits, and key documents during the Wells Process

This renewed openness reflects Atkins’s original point: that fairness and efficiency are not mutually exclusive. As he put it in 2008, “showing the evidence is called due process.”

The New Civil Liberties Alliance (NCLA) has argued that civil enforcement actions “can be just as coercive and abusive as criminal processes,” urging the adoption of a uniform rule requiring affirmative disclosure of material exculpatory evidence. From a policy perspective, extending Brady-like disclosure obligations to SEC enforcement actions would be neither revolutionary nor radical. 

In short, the moral rationale of Brady—fairness, transparency, and due process—fits neatly within the SEC’s own mission as a disclosure agency. What’s inconsistent is the idea that those values apply to public companies but not to the government actors enforcing them.

Looking Forward

Under Chairman Atkins, the SEC appears to be rediscovering the virtues of its own past. The “open jacket” approach he championed in 2008 was not a call for leniency—it was a call for confidence. A confident regulator, he argued, has nothing to fear from sunlight.

If the Commission formalizes this practice, the benefits would flow both ways: staff decisions would be better informed, and respondents would have a meaningful chance to present their case before reputational damage becomes irreversible.

Whether the SEC ultimately codifies an open jacket policy or continues to implement it as a matter of discretion, the renewed focus on fairness and transparency marks a healthy evolution. As Atkins put it best:

“We should take every step to apply this policy… not only because it works, but because it is the right thing to do.”

There is no better reason than this to make this mandatory SEC policy.

Key Takeaways for Respondents

• Ask early, ask specifically. When responding to a Wells notice, counsel should request access to non-privileged portions of the investigative file and cite the staff’s discretionary authority under the Enforcement Manual.
• Frame it as fairness, not entitlement. The Manual’s language supports disclosure “on a case-by-case basis.” Framing the request as advancing fairness and accuracy, not as a demand, increases the likelihood of success.
• Document cooperation. Atkins’s own remarks and the Manual’s factors both favor transparency when respondents have cooperated fully.
• Use the precedent. Cite the SEC’s renewed emphasis on dialogue—as voiced by Antonia Apps and endorsed by Chair Atkins—to justify the request.
• Stay professional. The open jacket discussion signals cultural change, not legal obligation. Defense counsel who treat it as an opportunity for productive engagement, not confrontation, are best positioned to benefit.

Contact Us for SEC Investigation Help

If you receive a Wells notice, an SEC subpoena for documents or testimony, a FINRA 8210 request, a FINRA on-the-record (OTR) interview request, or a similar inquiry from a state regulator, such as Florida’s Office of Financial Regulation (OFR), act immediately. Contact Fridman Fels & Soto, PLLC to speak with an experienced SEC defense attorney. Prompt action is critical to protect your rights.

Alejandro Soto is a former federal prosecutor and senior official with the SEC. He leads Fridman Fels & Soto, PLLC’s SEC Defense Practice Group and is admitted in Florida and Washington, DC.