It is our great privilege and honor to lead what we consider to be the most effective law enforcement staff in government.

Your talents, creativity and commitment to vigorous enforcement of the securities laws make sure investors are protected, wrongdoers are held accountable, and future misconduct is deterred. Nowhere is this better evidenced than in the settlements we have obtained after meticulous investigations and careful analysis of the evidence. Our settlements consistently achieve a broad measure of public accountability, deterrence, and punishment. As you know, the Commission has broad discretion in deciding the terms of settlement in our enforcement actions. Like most civil regulators, the Commission has generally settled its cases without the defendant admitting the allegations of the complaint. Unlike many other civil regulators, though, our settlements also prohibit the defendants from denying our allegations. Settling cases without requiring the defendant to admit the Commissions allegations is often important to achieve the key goals of our enforcement program: deterring misconduct through the imposition of appropriate sanctions; protecting investors by barring wrongdoers from employment and positions that place investors at risk; achieving corporate reform and other relief calculated to prevent future violations; and swiftly returning money to harmed investors. Achieving such results quickly also allows us to deploy our limited resources efficiently and without litigation risk. Recently, we have begun to review our approach to ensure we make full and appropriate use of our leverage in the settlement process, including a discussion of the neither admit nor deny approach. While the no admit/deny language is a powerful tool, there may be situations where we determine that a different approach is appropriate. We currently do not enter no-admit-no deny settlements in cases in which the defendant admitted certain facts as part of a guilty plea or other criminal or regulatory agreement. Beyond this category of cases, there may be other situations that, after considering the goals set forth above, justify requiring the defendants admission of allegations in our complaint or other acknowledgment of the alleged misconduct as part of any settlement. In particular, there may be certain cases where heightened accountability or acceptance of responsibility through the defendants admission of misconduct may be appropriate, even if it does not allow us to achieve a prompt resolution. We have been in discussions with Chair White and each of the other Commissioners about the types of cases where requiring admissions could be in the public interest. These may include misconduct that harmed large numbers of investors or placed investors or the market at risk of potentially serious harm; where admissions might safeguard against risks posed by the defendant to the investing public, particularly when the defendant engaged in egregious intentional misconduct; or when the defendant engaged in unlawful obstruction of the Commissions investigative processes. In such cases, should we determine that admissions or other acknowledgement of misconduct are critical, we would require such admissions or acknowledgement, or, if the defendants refuse, litigate the case. Of course, we recognize that insisting upon admissions in certain cases could delay the resolution of cases, and that many cases will not fit the criteria for admissions. For these reasons, no-admit-no-deny settlements will continue to serve an important role in our mission and most cases will continue to be resolved on that basis. We will also continue

to strongly defend our discretion to reach such settlements in response to inquiries from courts. We will be holding a Town Hall in the coming days to further solicit and discuss your views. In the meantime, we encourage you to assess each of your ongoing investigations and pending actions with a view to whether the conduct and circumstances warrant consideration of public acceptance of responsibility by the defendant(s). If you believe admissions may be appropriate, please advise your supervisor and OCC so that we can begin an early dialogue about the case. Thank you for all that you do on a daily basis to advance the SECs mission.