I. Overview of the First Half of 2012

The first half of 2012 has shown a continuation of the SEC’s aggressive enforcement strategy even after a record-breaking fiscal year 2011 for the U.S. Securities and Exchange Commission (the “SEC” or “Commission”), which resulted in 735 enforcement actions and over $2.8 billion in penalties and disgorgement ordered. During the first six months of 2012, the SEC filed 110 actions in federal court against a collective 308 defendants. It appears, however, that the SEC is beginning to feel the resource costs of pursuing such cases over time. Specifically, the SEC recently disclosed that it is actively litigating approximately 90 cases, which is an increase of more than 50% in the past year. This recent surge in litigation may have been influenced by many factors, including the increased complexity in cases stemming from the financial crisis and a related increase in charges being filed against individuals. Protracted litigation will place an increasing drain on the agency’s limited resources. Nevertheless, as the current administration’s first term comes to a close and as conduct related to the financial crisis becomes more distant in time, we anticipate that the SEC will sustain its aggressive strategy of filing and, if necessary, litigating cases against prominent defendants in order to bolster public confidence in a vigorous enforcement of the securities laws.

Highlights of the past six months include:

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