that his belief as to our knowledge of the claim was correct, to accept this argument would require us to disregard the express requirement of the Rule that all of the necessary representations be committed to writing by the registrant so that the report as filed will constitute a complete and accurate public document not only in the interests of administrative regulation but for the protection of persons dealing with the registrant. For similar reasons, Weston's next argument-that he had additional unreported assets which approximately balanced the liability to Miss H-does not meet the issue. Customers and creditors are entitled to a full picture of a registrant's financial condition, and the extent to which their claims may be impaired by the enforcement of other claims.26 Moreover, if Weston possessed the additional assets when the original 1946 statement was filed, his failure to record those assets was in itself a violation of the Rule. We find, as did the hearing examiner, that Weston violated Section 17 (a) of the Securities Exchange Act and Rule X-17A-5. But we do not agree with the examiner that such violations were not willful. In view of all the circumstances described, we find that they were.27 CONVICTION OF CRIMES INVOLVING SECURITIES. In 1946 Weston undertook to act for certain persons in the sale of securities acquired by them in France. The securities were negotiable bonds of American corporations which had been seized from Dutch nationals by the Nazi military governor, subsequently transported by the Nazis to France, and there sold to individuals. Weston's clients acquired them in Paris after the Allied invasion. Although existing United States regulations under the Trading With The Enemy Act made unlawful the importation and holding of such securities without reporting them or forwarding them to the Federal Reserve Bank, the securities in question were not so reported or forwarded by Weston or his clients. On September 10, 1948, Weston and his clients were indicted in the District Court of the United States for the District of Massachusetts for alleged willful violations of the Trading With 26 Total liabilities (exclusive of the balance due on Miss H's note) as shown by the statement of November 30, 1946, amounted to $24,667; total assets (exclusive of the additional cash) amounted to $33,293. 27 The hearing examiner noted the circumstances surrounding the preparation and filing of the reports, including the fact that Weston was attempting to conceal the nature of his dealings with Miss H. However, it appears that he did not distinguish the question whether the violations were willful from the question of public interest in taking disciplinary action on the basis of such violations. The Enemy Act and for conspiracy to violate that Act. At first they pleaded guilty, but when they appeared for sentence they requested permission to withdraw their pleas and to enter pleas of nolo contendere. The Court accepted the pleas of nolo contendere, remarking that the violations were largely technical since some of the applicable regulations had been subsequently rescinded. The Court adjudged Weston "guilty as charged and convicted" and placed him upon probation for a period of two years. Weston's conviction constitutes a statutory ground for revoking his registration as a broker and dealer as well as the registration of Assured Warranty Corporation as an investment adviser, if we find it in the public interest to take such action.28 VIOLATIONS OF INVESTMENT ADVISERS ACT. In the proceedings for revocation of registration of Assured Warranty Corporation as an investment adviser it is alleged that the registrant violated Section 207 of the Investment Advisers Act of 1940 in that it willfully made untrue statements and misleading omissions in its registration application and supplemental reports required to be filed under Sections 203 and 204.29 Specifically, it is alleged, and the evidence shows, that, in response to required items of information, the filings falsely stated that Weston was the beneficial owner of preferred stock in the corporation; that neither the corporation nor its officers accepted discretionary accounts or held funds or securities of clients; and that the corporation transmitted confirmations of transactions to its clients. The hearing examiner found that the Act was willfully violated in these respects, and no exceptions were taken to his findings. After review of the record, we adopt the finding of the hearing examiner that Assured Warranty Corporation, through Weston, willfully violated Section 207 of the Investment Advisers Act. PUBLIC INTEREST. In our opinion the willful violations of the anti-fraud provisions of the Securities Act and Securities Exchange Act, and the willful violations of the filing requirements of the Securities Exchange Act and the Investment Advisers Act, require disciplinary action. As our findings have indicated, all of the violations were directly or indirectly connected with a long course of conduct, whereby See Leo G. Siesfeld, 11 S. E. C. 746 (1942); Alexander Smith, 22 S. E. C. 13 (1946); Jesse S. Lockaby, 29 S. E. C. 271 (1949). 29 Weston signed the application and all supplemental reports as president of the registrant. Weston systematically defrauded a client who reposed great trust and confidence in him, and with his efforts to conceal his improper acts. Furthermore, Weston has been convicted of crimes involving other securities transactions; and in this connection we must note that the District Court which placed him on probation did not have before it the facts revealed by this record respecting Miss H. Under all the circumstances we have concluded that it is necessary and appropriate in the public interest to revoke the registration of Weston as a broker and dealer and to revoke the registration of Assured Warranty Corporation as an investment adviser. To the extent consistent with this opinion, the exceptions to the hearing examiner's recommended decision filed by the parties are sustained; to the extent that they are inconsistent, they are dismissed. An appropriate order will issue. By the Commission (Chairman Hanrahan and Commissioners McEntire and McDonald), Commissioner Rowen not participating. IN THE MATTER OF THE COMMONWEALTH & SOUTHERN CORPORATION (DELAWARE) THE COMMONWEALTH & SOUTHERN CORPORATION THE SOUTHERN COMPANY SOUTHERN SERVICES, INC. CONSUMERS POWER COMPANY CENTRAL ILLINOIS LIGHT COMPANY PENNSYLVANIA POWER COMPANY ALABAMA POWER COMPANY GEORGIA POWER COMPANY GULF POWER COMPANY MISSISSIPPI POWER COMPANY File No. 70-2126, 37-59. Promulgated September 23, 1949. (Public Utility Holding Company Act of 1935-Section 11 (e)) ACQUISITION AND SALE OF STOCK OF MUTUAL SERVICE COMPANY BY REGISTERED HOLDING COMPANY. Applications-declarations of registered holding company and its subsidiaries regarding acquisition of capital stock of mutual service company by holding company and sale of said stock to employees and officers of service company in connection with dissolution of holding company, granted and permitted to become effective. SERVICING OF FORMER AFFILIATES BY INDEPENDENT SERVICE COMPANY. Where a Section 11 (e) plan provided for the liquidation and dissolution of a registered holding company and the divestment of its subsidiaries and the order approving the plan reserved jurisdiction over proposed arrangements for the servicing of former affiliates by the system service company, and where an application has been filed for approval of the proposed servicing of former affiliates by the system service company after it has become an independent service company, held that the application should be granted 30 S. E. C.-35-9362 subject to a continued reservation of jurisdiction over such arrangements and subject further to the imposition of conditions requiring, among other things, the submission of periodic reports for a designated period on business transactions with former affiliates. APPROVAL OF MUTUAL SERVICE COMPANY. Application by company for approval as a mutual service company, granted, the Commission finding that the provisions of Section 13 of the Act and the Rules promulgated thereunder are satisfied. APPEARANCES: George Roberts and Hayden N. Smith, of Winthrop, Stimson, Putnam & Roberts, New York, N. Y., for The Commonwealth & Southern Corporation and its subsidiaries. Alfred J. Snyder and Elizabeth C. Lownsbury, Philadelphia, Pa., stockholders of The Commonwealth & Southern Corporation, pro se and for various common stockholders and option warrant holders. Joseph Paul, Jr., for the Division of Public Utilities of the Commission. FINDINGS AND OPINION OF THE COMMISSION The Commonwealth & Southern Corporation (of Delaware), hereinafter referred to as "Commonwealth", a registered holding company, and the member companies of the Commonwealth holding company system have filed applications and/or declarations pursuant to Sections 6 (a), 7, 9 (a), 10, 12 (f) and 13 (b) of the Public Utility Holding Company Act of 1935 (the "Act"), with respect to (a) the transformation of The Commonwealth & Southern Corporation (of New York), hereinafter referred to as "service Company", the mutual service company of the Commonwealth holding company system, into an independent service company, to be named "Commonwealth Services, Inc." or some other appropriate name, and (b) the creation of a new company, Southern Services, Inc., as a mutual service company for the holding company system of The Southern Company, a registered holding company and a subsidiary of Commonwealth. In accordance with Commonwealth's plan of reorganization filed pursuant to the provisions of Section 11 of the Act, dated July 30, 1947 and approved by this Commission on November 22, 1948, and by the District Court of the United States for the District of Delaware on July 15, 1949, Commonwealth will be dissolved and its portfolio securities distributed to its security holders. Under that plan it was proposed that, following the |