Duane Morris LLP

The securities, futures and derivatives industries are among the most regulated businesses in the United States and abroad. Within the United States, they are subject to pervasive federal and state laws, as well as the rules and regulations of self-regulatory organizations (SROs) like FINRA and the various securities and futures exchanges (including the NYSE). In recent decades, the industry has come under increasing scrutiny of regulators in all three realms, with criminal sanctions being used more frequently to enforce the law. As the financial markets have truly become "international" in nature, other jurisdictions have implemented comprehensive regulatory schemes as well.

At the same time, professionals in these markets have had to adjust to a business environment transformed and made more competitive by new technologies, where once-reliable businesses suddenly have become unprofitable and novel business models unimagined only a few years ago are vying for competitive footholds and by the globalization of the financial markets.

Duane Morris represents securities, futures and derivatives firms and individual professionals as they meet the dual challenges of increasing regulation and intense competition. Our services are aimed at a broad range of firms catering both to public and institutional customers, and to market-makers, sponsors and operators of electronic communications networks (ECNs), Internet and other online access firms, clearing firms, investment advisors, commodity pool operators, private investment and trading companies and even exchanges themselves. Our clients face a myriad of issues and problems ranging from market fragmentation and internationalization of markets to industry-specific technical matters involving ECNs; quote and order display rules; registration, Security Futures products advertising, books and records concerns, financial responsibility concerns, competing PATRIOT Act and Privacy Act requirements, compliance with new Sarbanes-Oxley requirements; and general securities fraud/litigation and compliance issues. Our attorneys bring decades of accumulated experience to provide a broad range of services.

Litigation and Arbitration

We bring extensive experience in securities industry arbitration, mediation and litigation. We represent broker-dealers, funds, other institutions and investment professionals in the arbitration forums of FINRA, NYSE, NFA, and AAA, as well as handling matters before the state and federal courts.

Since industry participants also regularly face enforcement actions by government agencies and self-regulatory bodies, we also represent clients in all aspects of the enforcement process (including SRO, SEC and state agency investigations, and actions and appeals, both administrative and in court). With many regulatory violations now being treated as criminal offenses, we also represent clients through grand jury investigations and other pre-trial criminal proceedings.

Regulatory Compliance and Enforcement Defense

Concurrent regulation by multiple government agencies, and SROs creates complex and sometimes inconsistent requirements. Our clients - including broker-dealers, exchanges, contract markets, ECNs, futures commission merchants, issuers, underwriters, investment advisors, hedge funds, portfolio managers, commodity pool operators and advisors, floor traders and exchange members - rely on us for advice in:

• Registration and qualification matters
• Financial responsibility, books and records and back office requirements
• Front office and sales practice regulations
• Marketing and advertising initiatives
• Disclosure obligations
• Clearance, prime broker and settlement issues
• Preparation of Supervisory Procedures
• Adherence to new regulatory enactments

As a measure of preventive medicine, we conduct Mock Regulatory Audits so our clients can find and correct problems in these and other areas. Such self-correction generally is the "best defense" against a later regulatory enforcement action.

Managed Investment Programs and Products

Pooled investment vehicles continue to proliferate. Many industry participants, who initially entered the field seeking to avoid regulatory strictures, now face new laws and regulations and are likely to face even more in the years to come. We assist clients in developing managed account programs, trading and hedge funds, commodity pools and market-maker organizations. Both domestic and offshore participants look to us in these ventures to structure their capital raising, advisory, brokerage, clearing, underwriting and distribution relationships. Investment advisors and commodity trading advisors are also subject to equally extensive regulation, and we counsel them, as well.

Strategic Business Planning

We bring our experience in today's highly regulated environment to assist firms and individuals entering and participating in both traditional and electronic marketplaces. Financial responsibility, licensing and other pervasive rules and regulations present unique issues for clients buying or selling securities or futures businesses, or introducing new investment trading programs and instruments. Our attorneys can guide clients through the labyrinth of regulation to minimize its impact on their mergers and acquisitions. We also provide experienced counsel in clearing and operations issues, which have been dramatically affected by the advent of electronic markets and trading facilities, as well as the presence of new global markets.

Derivatives Practice

Our broad derivatives practice covers both transactional and regulatory work. We have represented commercial banks, investment banks and structured finance vehicles in transactions involving credit derivatives (including total return swaps, credit default swaps and credit-linked notes), equity derivatives, interest rate, currency and commodity swaps, foreign exchange, forward and option agreements, repurchase agreements, securities lending agreements, prime brokerage agreements and master netting agreements. Our attorneys have drafted and/or negotiated hundreds of ISDA master agreements and other customized forms that govern derivative transactions in addition to credit support documents.

International Markets

Non-U.S. companies increasingly look to U.S. financial markets as an alternative to their domestic markets or as a means to finance U.S. acquisitions. To assist in this process, our attorneys have advised non-U.S. clients regarding listings and capital raising transactions in the U.S. Through our London office, we also assist our domestic clients in complying with European regulatory requirements and in otherwise dealing with the various industry concerns in Europe.

Strategic Practice Group Liaisons

Although professionals and participants in the financial markets and services are subject to pervasive industry-specific regulation, they must also deal with the broad range of legal issues facing businesses generally. These more traditional business law issues can also be impacted by financial market regulation. For example, labor and employment-related disputes, involving claims of wrongful termination or discriminatory employment or hiring practices, are frequently adjudicated in special arbitration forums, rather than in court. The veritable explosion of licensing agreements correlating to the intellectual property underlying the financial industry's front end and trading platforms, back-end account management and clearing and settlement systems, require both a knowledge of the markets and their users, beyond expertise in the licensing of technology.

The banking and insurance industries are subject to equally pervasive regulatory schemes, and experienced professionals within Duane Morris offer them counsel in the broadest range of their needs and concerns.

Our Broker-Dealer & Securities Regulation Group has established liaisons with experienced professionals in other practice groups to ensure that our financial services and markets clients will receive seamless representation from an experienced team of professionals.

We also offer experienced, mature legal representation in the broadest range of transactional matters relating to the capital markets, or from investment and merchant banking and corporate, structured and municipal finance to M&A transactions and institutional lending.

"In my discussions with Duane Morris leaders, they frequently speak about how diversity within their firm has enabled them to better serve their diverse clients. They understand that investing in diversity is a wise business decision that positions them for the marketplace of the future."

Don Liu
Senior VP, General Counsel & Corporate Secretary
Xerox Corporation

At Duane Morris, achieving diversity is paradoxical. By supporting and celebrating the differences of our attorneys - and the individual strengths that they bring - our firm culture expands, fostering creative solutions for our clients. But diversity at Duane Morris does not mean that we have a certain number of diverse attorneys; true diversity means that it is no longer noteworthy to see diverse lawyers leading our practice groups or managing client relationships. Ascending to positions of leadership and greater responsibility and providing the highest levels of client service is simply what is expected of all our lawyers. Diversity is another strong asset that adds to our collective abilities to meet the needs of our clients.

Our vision of diversity at Duane Morris is to realize an environment in which our lawyers' outstanding qualities are not just measured by ethnicity, race, gender and sexual orientation, but more importantly, that our lawyers are remarkable as excellent attorneys above all else. Only then can we celebrate our differences while focusing on the common pursuit of legal excellence which everyone shares at Duane Morris.

To reach this goal, Duane Morris understands that the familiar diversity strategies and policies that most law firms have are needed. Without demanding results from such policies, most law firms are bound to fail in even achieving numerical hiring and retention goals. Duane Morris has been proactive and ambitious in its efforts to improve diversity at the firm, and has set deadlines for reaching the milestones which mark our progress. To create a more diverse law firm, Duane Morris is:

• Committed to strategically increasing our diversity levels, which is currently at 10 percent.
• Bringing together our Diversity Committee and our Hiring and Retention Committee to raise diversity as an important factor in our hiring decisions.
• Dedicated to improving retention by building upon our monitoring and mentoring program for all diverse associates.

Combining new initiatives with our longstanding diversity efforts, Duane Morris has seen increasingly positive results. In the Minority Law Journal's annual diversity survey of the nation's largest 260 firms, Duane Morris continued to improve its regional and national ranking, rising to number 136 of all firms surveyed. Our strides in Philadelphia are encouraging; in a city known for both the racial diversity of its population and the lack thereof in its law firms, Duane Morris is one of only two law firms to exceed the national average of minority partners at all law firms. Additionally, Duane Morris leads all national law firms based in Philadelphia in the number of Latino partners. Nearly 30 percent of all of our attorneys are women, and more than 20 percent of our partners are women.

In our approach to diversity, progress in racial, gender and cultural diversity cannot be measured in numbers alone. Duane Morris has focused our diversity initiatives on both increasing the number of diverse associates and addressing the challenges diverse attorneys face in building lasting careers and rising to senior and leadership positions. While several of our key practice groups are led by diverse partners and female partners, Duane Morris endeavors to create a culture which will foster a deep pool of such attorneys who can then develop into the firm's future leaders. Duane Morris understands that simply hiring diverse associates will not change the diversity of the firm; Duane Morris is working to mentor and retain diverse associates so that our progress in racial, gender and cultural diversity is also reflected at the highest levels of leadership within the firm.

Our progress on gender diversity has been profound. We have no glass ceilings: women hold positions of leadership at all levels of management at the firm. Women lead a number of our key practice groups, including our Energy, Immigration and International practices, and serve on the firm's Executive Committee. The success of our female attorneys at Duane Morris has not gone unnoticed. Barbara Adams was chair of the firm's Finance Practice until her appointment by Pennsylvania Governor Edward Rendell to serve as General Counsel of the Commonwealth. In 2004, our longtime General Counsel, Gene E.K. Pratter, was approved by the United States Senate and is now a judge for the U.S. District Court for the Eastern District of Pennsylvania.

Our efforts to improve diversity extend beyond our firm's walls. The chair of our Diversity Committee, Nolan N. Atkinson, Jr., recognized the lack of diversity in Philadelphia's legal community and formed the Philadelphia Diversity Law Group. Nolan now serves as the chair of the organization, a consortium of 25 law firms and corporations that commits to employing at least one diverse first-year law student each as a summer associate. From this program, law students of diverse backgrounds gain access to what was once an exclusive legal community, and now have the opportunity to learn and develop their legal careers with experience at Philadelphia's top law firms.

In addition to our involvement in the Philadelphia area, Duane Morris has increased our presence at national conferences and events focused on diversity. We sponsor the Hispanic National Bar Association and its job fair. Duane Morris is also a longtime supporter and sponsor of the Equality Forum, a national gay and lesbian rights organization. Duane Morris continues to sponsor the Minority Corporate Counsel Association, and is active in other associations of diverse attorneys including: the Asian American Bar Association of the Delaware Valley; the Charles Houston Bar Association; Cuban Bar Association; Korean American Lawyers Association; National American Indian Housing Counsel and the National Bar Association.

The challenge of improving gender, ethnic and cultural diversity at Duane Morris is an ongoing effort that has the support of the entire firm. Duane Morris has been at the vanguard in supporting gender diversity throughout the firm beginning a generation ago. Our diversity programs are leading to similar success in improving racial and national origin diversity at Duane Morris. But even as we share these examples of Duane Morris attorneys and our involvement in numerous legal events, associations and programs for diversity, our hope is that such examples will no longer be necessary to mention in the future. We hope that through our efforts, and the efforts of other law firms, these stories become so common that they are no longer the remarkable accomplishments they are today, but simply routine aspects of the legal world tomorrow.