sion of the District of Columbia of the issue and sale of securities shall be revoked or otherwise terminated. The order shall further provide that within 10 days after the issue and sale of such bonds the applicant shall file with this Commission a certificate of notification showing that such issue and sale have been effected in accordance with the terms and conditions of, and for the purposes represented by, said amended application. 3 S. E. C. INDEX-DIGEST The following digest of decisions presents a consolidated summary of the case headnotes arranged alphabetically according to topic headings. The digest is divided into three parts: Part I containing decisions under the Securities Act of 1933; Part II, the Securities Exchange Act of 1934; and Part III, the Public Utility Holding Company Act of 1935. The case headnotes have not been carried over verbatim into this digest. To facilitate the grouping together of decisions standing for a similar proposition under a single digest heading, it has been necessary to delete from the headnotes all matter not pertinent to the general proposition for which the headnote stood, i. e., the names of all companies, the principal amounts of all security issues, etc. To the same end, certain case headnotes have been entirely redrafted for the digest so as to conform to a uniform statement of the general proposition. In a few instances, case headnotes, which were not considered important for the purposes of this digest, have been omitted from the digest altogether. 3 S. E. C. 1127 PART I SECURITIES ACT* OF 1933 ACCOUNTING ACCOUNTANTS' CERTIFICATE Financial Information Without Factual Basis Accountant's omission to indicate that material facts as stated in registration statement and prospectus are based upon inadequate records, held to render his certification deficient . . . Page 872. Form and Content Accountants' certificate must comply with rules of Commission and cover all financial data required to be certified . . . Page 872. Scope of Audit Where accountants who certified financial statements filed with registration statement omitted procedures recognized as essentials of an audit of a small loan company which, had they been employed, would have disclosed defalcations of the manager of one of registrant's wholly owned subsidiaries, accountants' certificate stating that their examination was sufficient in scope to satisfy them as to correctness of accounts held to fall short of requirements of Rule 651 . . . Page 407. BALANCE SHEETS Immaterial Inaccuracies and Inadequacies Even though a registrant had failed uniformly to follow proper accounting practices, the resulting untrue statements and omissions held not to be material . Page 601. Must Not Be Misleading Though Not Required Where, although instructions specifically state that balance sheet is not required to be filed, registrant voluntarily files one, it must not be misleading Page 872. CAPITAL STOCK It is misleading to include in the financial statements, as stock issued for cash, stock in fact issued for property . . . Page 872. CASH RECEIPTS AND DISBURSEMENTS Where approximately 521,000 out of 660,000 outstanding shares of stock were not issued for cash, held misleading to include as cash receipts and disbursements total consideration given for "property". . . Page 872. The term "Act" as used in Part I of this Digest refers to the Securities Act of 1933, as amended. |