The new leadership installed at the Securities and Exchange Commission, stung by the financial meltdown and the Madoff embarrassment, has promised Congress and the public a more aggressive and effective enforcement program against suspected securities law violators. As a result, securities lawyers have been counseling their corporate clients to expect the worst. As one lawyer told a gathering of business executives this June, harkening back to the Enron era: “It’s 2002 on steroids.”

Early signs suggest that the SEC is indeed bulking up. The Obama administration has requested a 6 percent budget increase for the SEC in fiscal year 2010, representing a 13 percent increase from 2008, and a large portion of that funding is earmarked for new hires and technological improvements in the enforcement division. The SEC also has raised its enforcement profile significantly in roughly the first half of this year, opening 525 investigations (versus 475 during the same period last year), issuing 275 formal orders (versus 126), seeking 52 emergency temporary restraining orders (versus 21), and filing 397 actions (versus 306).

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