INDEX DIGEST The following digest of decisions presents a consolidated sum- The case headnotes have not been carried over verbatim into this * During the period covered by this volume there were no opinions containing case headnotes 663 PART I SECURITIES ACT OF 1933 REGULATION A EXEMPTION Where underwriter in connection with sale of stock exempted from registration under Regulation A made false representations with respect to business of the issuer and value of the shares, sold shares in states other than those listed in letter of notification filed with the Commission, and sent to prospective purchasers sales literature not filed with the Commission, exemption permanently suspended, it being immaterial that the officers of the issuer had no knowledge of the misrepresentations, the sales outside the scope of the letter of notification, or the necessity for filing the sales literature... Page 454. Where, subsequent to an order temporarily suspending exemption under Regulation A, issuer rescinded all sales of securities made under exemption and sold all its assets to other companies, held, temporary suspension order vacated... Page 342. STOP-ORDER PROCEEDINGS Misstatements and Omissions Where notice of stop-order proceedings relating to registration statement filed by company which proposed to construct a hotel alleged inadequate disclosure concerning, among other things, property to be acquired and the price to be paid therefor, transactions with affiliates and use of proceeds, and registrant consented to issuance of stop order, held, stop order should issue suspending effectiveness of registration statement... Page 421. Motion to dismiss stop-order proceedings for failure to accord opportunity to achieve compliance, assertedly required by Section 9(b) of Administrative Procedure Act, and to provide more specific statement of matters to be considered at hearing, denied, such proceedings being within exception expressly provided in Section 9(b) assuming section is applicable, and registrant being sufficiently apprised of matters to be defended against ... Page 595. Where registration statement contains materially misleading statements and omissions with respect to, among other things, the history and business of the enterprise, previous sales of securities, and transactions with promoters, held stop order will issue suspending effectiveness of registration statement... Page 618. 36 S. E. C. PART II SECURITIES EXCHANGE ACT OF 1934 BROKER-DEALER REGISTRATION Cancellation of Registration Where registered broker-dealer is not engaged in business as a broker or dealer, registration may be cancelled... Page 368. Extension of Credit Where member of national securities exchange extended credit to customers without complying with Regulation T, held, willful violations of Section 7 (c) (2) of Securities Exchange Act of 1934... Page 460. Evidence Where findings of the Commission differ from findings of hearing examiner, held, on petition for rehearing, Commission's findings are properly based on whole record and it was not necessary that the Commission specifically overrule examiner's finding on basis of "a very substantial preponderance" of evidence... Page 443. Excessive Trading-Secret Profits Where broker-dealer induced transactions in accounts of customers which were excessive in volume and frequency in view of character of the accounts, and took secret profits therefrom, held, violations of Section 17(a) of the Securities Act and Sections 10(b) and 15(c)(1) of the Securities Exchange Act and Rules X-10B-5 and X-15C1-2 thereunder... Page 467. GROUNDS FOR REVOCATION Where broker-dealer sold shares, as underwriter of new corporation formed to acquire oil and gas interests, on basis of prospectus referring to contract for purchase of initial interests, without disclosing default under contract and amendment of contract providing for increase in purchase price and forfeiture of amounts paid in event of further default, and made affirmative misrepresentations as to the issuer's activities and prospects, held willful violations of Section 17(a) of the Securities Act of 1933 and Section 15(c)(1) of the Securities Exchange Act of 1934 requiring revocation in the public interest... Page 12. Where dealer made misleading representations in connection with sale of stock of uranium company, including false statements regarding amount and quality of ore available, held, willful violation of anti-fraud provisions of Securities Act of 1933 requiring revocation of registration in the public interest... Page 15. Where registrant has been enjoined from engaging in certain practices in connection with transactions in securities held registration revoked Where registered broker-dealer made false statements and representations Where registered broker-dealer sold unregistered securities, made false Where registrant misappropriated proceeds of sale of customers' securi- Where registered broker, who had been specifically advised of the illegal- Where registered broker-dealer and controlling person thereof obtained Where registrant's books used fictitious names and addresses of salesmen Where registered broker-dealer sold securities at prices bearing no reason- Securities Exchange Act of 1934 and Rules X-10B-5 and X-15C1-2 thereunder... Page 298. Where registered broker and dealer used mails and facilities of interstate commerce to sell securities not registered under the Securities Act of 1933, held, willful violation of Section 5(a)(1) of that Act, requiring in the public interest suspension from membership in national securities association . . . Page 327. Where registered broker-dealer firm and its president are enjoined from purchase or sale of securities for misrepresentation of value of stock and financial condition of issuer, and consent to such injunction although denying allegations of complaint, held, public interest required registration be revoked... Page 340. Where applicant for registration as broker-dealer, in willful violation of Exchange Act, had effected through use of the mails over extended period of time transactions as broker-dealer while unregistered despite repeated advices from representative of Commission that registration was required, had made false representations to a customer as to the price obtainable for securities and, after the customer had turned over securities to him for sale, as to the amount of such securities that applicant had sold, and had improperly accounted for the sale of customer's securities; and where report of financial condition filed by applicant in connection with his application failed to include certain liabilities, held, public interest required denial of application... Page 357. Where a registered broker-dealer corporation and its president are permanently enjoined from engaging in improper and fraudulent acts and practices in connection with the purchase and sale of securities, held, in the public interest to revoke broker-dealer's registration and not to permit withdrawal to become effective... Page 373. Where petition for rehearing in respect of order denying application for registration states no facts not previously considered, held, rehearing denied ... Page 443. Where financial statement filed is deficient in failing to disclose all liabilities of registrant, held, such deficiency may not be avoided by showing unreported assets as offsetting unreported liabilities... Page 443. Where registered broker-dealer, as an accommodation to its customers and without any expectation of compensation, accepted subscriptions for unlisted stock publicly offered by issuer, transmitted payments to issuer and delivered stock to customers, but did not confirm or keep records of transactions, held, willful violations of Sections 15 (c) (1) and 17(a) of Securities Exchange Act of 1934 and Rules X-15C1-4 and X-17A-3 thereunder... Page 460. Where registered broker-dealer accepted from both residents and nonresidents of state subscriptions for stock publicly offered by issuer when it knew or should have known that issuer intended to confine sales to residents in order to qualify offering for exemption from registration under Securities Act of 1933, held, willful violation of Section 5(a)(1) of that Act despite fact that it acted for the accommodation of its customers without any expectation of compensation... Page 460. Where broker-dealer which acted as underwriter had withheld a portion of |