I’ve previously argued that individuals should consider litigating against the SEC. But in early December 2006, the SEC’s nationwide head of enforcement, Linda Chatman Thomsen, publicly touted the strength of its litigation program last year, noting that it had won every single case it had litigated in federal court. As Thomsen put it, “We’re 10 for 10.” Does this change my recommendation? No.

While the SEC’s statement is technically correct, it is also misleading. During the past year, for example, the SEC lost on summary judgment in three cases that the commission does not include in its “10 for 10″ calculus. Such defeats are just as much a loss as defeats at trial. In fact, they are worse because it means the SEC lacked sufficient evidence to get those cases to a jury. Moreover, in two of the SEC’s claimed victories, the commission actually lost significantly at the remedies phase of the trials.

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