On July 10, 2015, in Montford and Company v. SEC, the US Court of Appeals for the DC Circuit held that Section 4E of the Securities Exchange Act of 1934 does not deprive the SEC of jurisdiction to bring an enforcement action more than 180 days after issuing a Wells Notice (No. 14-1126, (D.C. Cir. July 10, 2015)).

Montford and Company, founded by Ernest Montford, Sr., was a registered investment advisor to institutional investors that advertised itself as independent and impartial. Ernest Montford had a relationship with Stanley Kowalewski, an investment manager specializing in hedge funds, and began recommending Kowalewski to his clients. In 2009, Kowalewski started his own investment management firm, SJK Investment Management LLC. Montford told Kowalewski he would try to convince his clients to transfer their investments to SJK. Eventually, Montford convinced nine of his clients to transfer their investments to SJK and invoiced SJK $210,000 in total for these services. Kowalewski made these payments in addition to waiving Montford's personal IRA fees and covering the expenses on a fishing trip that Kowalewski and Montford took together.

In January 2011, the SEC filed a civil enforcement action against SJK and Kowalewski for securities fraud, alleging that Kowalewski diverted millions of dollars to himself. The SEC then began investigating Montford and Company and Ernest Montford, and issued a Wells Notice to them in March 2011. In September 2011, 187 days later, the SEC instituted administrative proceedings against them, alleging inaccuracies in the firm's promotional materials regarding its independence and impartiality. Montford and Company and Ernest Montford filed a motion to dismiss the proceedings as time-barred under Section 4E of the Exchange Act, which provides that the SEC must file an action or provide notice of its intent not to file an action within 180 days after the Wells Notice. In response, the SEC submitted a declaration that the Director of the Division of Enforcement had extended this deadline under 15 U.S.C. § 78d-5(a)(2). The Administrative Law Judge (ALJ) denied the motion to dismiss for lack of jurisdiction, and ultimately found that Montford and his company had violated various provisions of the Advisors Act and imposed sanctions. The Commission affirmed the ALJ's decision, finding that dismissal of an action was not the appropriate remedy when the time periods set forth in Section 4E are exceeded. Montford and Company and Ernest Montford petitioned the DC Circuit for review.

The DC Circuit denied the petition for review. The court held that the Commission's interpretation of Section 4E, as not imposing a jurisdictional bar, was reasonable and entitled to deference. Under the two-pronged test in Chevron, U.S.A., Inc. v. NRDC, the court found that, first, Section 4E was ambiguous by not specifying any consequence for noncompliance with the 180-day time limitation and, second, the Commission's interpretation of Section 4E was reasonable (467 U.S. 837 (1984)). As a result, the DC Circuit deferred to the Commission's interpretation of the provision. It concluded that the 180-day time period under Section 4E was not jurisdictional and that the Commission was not deprived of jurisdiction to bring an enforcement action more than 180 days after issuing a Wells Notice. The court reiterated that time limitations for filings in statutes are presumptively non-jurisdictional.