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Annual Sutherland SEC/FINRA Litigation Study: Taking on Regulators Proves Beneficial

July 30, 2012

WASHINGTON (July 30, 2012) – Sutherland Asbill & Brennan LLP today announced the results of its 2012 Sutherland SEC/FINRA Litigation Study – an annual review of the litigated cases brought by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) against broker-dealers and associated persons. This year, through the study, Sutherland Partner Brian L. Rubin and Associate Jae Yoon found that while most firms and individuals choose to settle, litigation is often a wiser choice.

The attorneys analyzed cases in Fiscal Year (FY) 2011 and the first half of FY 2012 (October 2010 through March 2012) and found that:

  • Almost 13% of all litigated SEC and FINRA charges were dismissed. When represented by counsel, FINRA respondents were successful almost 20% of the time.
  • Nearly 1/3 of the time, the administrative law judge (ALJ) or the Hearing Panel imposed lower monetary sanctions than the SEC or FINRA prosecutors sought.
  • In FINRA hearings, 50% of the time Hearing Panels imposed shorter suspensions and 33% of the time Hearing Panels imposed lower monetary sanctions than those sought by FINRA staff.
  • Nearly 43% of SEC respondents were successful in getting charges dismissed or sanctions reduced when they appealed to the Commission from an Administrative Law Judge decision.

"As we emerge from the financial crises, most firms and individuals think that settling with the SEC and FINRA makes the most sense. However, our studies continue to show that in some circumstances, respondents can litigate successfully, resulting in the dismissal of charges entirely or  decreased sanctions," said Mr. Rubin, who represents firms and individuals being investigated and prosecuted by the SEC, FINRA, and states.

Sutherland has conducted the annual study since 2005. To view this year’s study in full, click here.

SUTHERLAND ASBILL & BRENNAN LLP
Sutherland Asbill & Brennan LLP is a law firm with global reach known for solving challenging business problems and resolving sophisticated legal issues for many of the world’s largest companies. Founded in 1924, the firm handles matters throughout the United States and worldwide. Seven major practice areas—corporate, energy and environmental, financial services, intellectual property, litigation, real estate, and tax—provide the framework for an extensive range of focus areas, allowing Sutherland attorneys to serve a diverse client base that ranges from small and medium-sized start-up businesses to a significant number of Fortune 100 companies.

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