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if supported by evidence, shall be conclusive, and its recommendation, if any, for the modification or setting aside of the original order. The jurisdiction of the court shall be exclusive and its judgment and decree, affirming, modifying, or setting aside, in whole or in part, any order of the Commission, shall be final, subject to review by the Supreme Court of the United States upon certiorari or certification as provided in sections 239 and 240 of the Judicial Code, as amended (U.S.C., title 28, secs. 346 and 347).

(b) The commencement of proceedings under subsection (a) shall not, unless specifically ordered by the court, operate as a stay of the Commission's order.

PENALTIES

SEC. 25. Any person who willfully violates any provision of this Act or any rule or regulation made thereunder, or any undertaking filed thereunder, or any person who willfully and knowingly makes, or any person, including a director, officer, accountant, or other expert thereof who willfully and knowingly is responsible for any statement in any application, report, or document required to be filed under this Act or any rule or regulation thereunder or in any communication, oral or otherwise, subject to the provisions of section 8(a) (5), which statement is, in the light of the circumstances under which it was made, false or misleading in any matter sufficiently important to influence the judgment of an average investor, shall upon conviction be fined not more than $25,000 or imprisoned not more than ten years, or both, except that when such person is an exchange, a fine not exceeding $500,000 may be imposed.

JURISDICTION OF OFFENSES AND SUITS

Sec. 26. (a) The district courts of the United States, the United States courts of any Territory, and the Supreme Court of the District of Columbia shall have jurisdiction of offenses and violation under this Act and of all suits in equity and actions at law brought (otherwise than against any agency charged with the administration of this Act, or any officer or employer thereof) to enforce any liability or duty created by this Act. Any such criminal proceeding may be brought in the district wherein any act or transaction constituting the offense or violation occurred. Any such civil suit or action may be brought in any such district or in the district wherein the defendant is found or is an inhabitant or transacts business, and process in such cases may be served in any other district of which the defendant is an inhabitant or wherever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in sections 128 and 240 of the Judicial Code, as amended (U.S.C., title 28, secs. 225 and 347). No costs shall be assessed for or against the Commission in any proceeding under this Act brought by or against it in the Supreme Court or such other courts.

(b) In case of contumacy or refusal to obey a subpena issued to any person, any of the said United States courts within the jurisdiction of which said person guilty of contumacy or refusal to obey is found or resides, upon application by the Commission may issue to such person an order requiring such person to appear before the Commission, or one of its examiners designated by it, there to produce documentary evidence if so ordered, or there to give evidence touching the matter in question; and any failure to obey such order of the court may be punished by said court as a contempt thereof.

(c) No person shall be excuse from attending and testifying to or from producing books, papers, contracts, agreements, and other records before the Commission, or in obedience to the subpena of the Commission or any member thereof or any officer designated by it, or in any cause or proceeding instituted by the Commission, on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty of forfeiture; but no individual shall be prosecuted or subject to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after having claimed his privelege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying.

EFFECT ON EXISTING LAW

Sec. 27. (a) The rights and remedies provided by this Act shall be in addition to any and all other rights and remedies that may exist at law or in equity. Nothing in this Act shall affect the jurisdiction of the securities commission (or any agency or office performing like function) of any State over any security or any person insofar as does not conflict with the provisions of this Act or the rules and regulations of the Commission thereunder.

(b) Nothing in this Act shall be construed to modify existing law with regard to the binding effect on any member of any exchange of any action taken by the authorities of such exchange to settle disputes between members or with regard to the binding effect of such action on any person who has agreed to be bound thereby or with regard to the binding effect on any member of any disciplinary action taken by the authorities of the exchange as a result of violation of any rule of the exchange, insofar as the action taken is not inconsistent with the provisions of this Act or the rules and regulations of the Commission thereunder,

VALIDITY OF CONTRACTS

Sec. 28. (a) Any condition, stipulation, or provision binding any person to waive compliance with any provision of this Act or of any rule or regulation made thereunder, or of any rule of an exchange required thereby shall be void.

(b) Every contract, including any contract for listing a security on an exchange, made in violation of any provision of this Act or of any rule or regulation thereunder and every contract heretofore made the performance of which involves the continuance of any relationship or practice prohibited by this Act or any rule or regulation thereunder shall be void as regards any cause of action arising after the effective date of such provision, rule, or regulation. This section shall not afford any grounds for defense to any suit brought to enforce the collection of any evidence of indebtedness by any person who acquired the same in good faith for value without actual knowledge of such illegality.

FOREIGN SECURITIES EXCHANGES SEC. 29. It shall be unlawful for any broker or dealer, directly or indirectly, to make use of the mails or of any means or instrumentality of transportation or communication in interstate commerce for the purpose of effecting on an exchange situated in a place not subject to the jurisdiction of the United States any transaction in any security the issuer of which is a resident of or is organized under the laws of, or has its principal place of business in a place subject to the jurisdiction of the United States in contravention of such rules and regulations as the Commission may deem necessary or appro priate in the public interest or for the protection of investors or to prevent the evasion of this Act.

REGISTRATION FEES Sec. 30. Every national securities exchange shall pay an annual registration fee for the privilege of doing business as a national securities exchange during the preceding calendar year or any part thereof. Such fee shall be paid to the Commission on or before March 15 of each calendar year. Such fee shall be an amount equal to one five hundredths of 1 per centum of the aggregate dollar amount of the sales of securities transacted on such national securities exchange during the preceding calendar year,

JURISDICTION OF OTHER AGENCIES OF THE UNITED STATES SEC. 31. All powers given and duties imposed hereunder to or upon the Commission insofar as they apply to national banking associations or to a receiver, conservator, or other liquidating agent thereof shall be exercised or performuel by the Comptroller of the Currency, and all applications, reports, and documents to be filed by such associations or persons shall be filed with the Comp troller of the Currency; and all powers given and duties imposed hereundet to or upon the Commission insofar as they apply to state member banks of tle Federal Reserve System shall be exercised and performed by the Federal

Reserve Board, and all applications, reports, and documents to be filed by such banks shall be filed with the Federal Reserve Board. All powers and duties imposed hereunder to or upon the Commission insofar as they apply to persons subject to the provisions of Section 20 of the Interstate Commerce Act, as amended, shall be exercised and performed by the Interstate Commerce Commission, and all applications, reports, and documents to be filed by such persons shall be filed with the Interstate Commerce Commission.

MEMBERS AND EMPLOYEES OF FEDERAL TRADE COMMISSION SEC. 32. (a) The Federal Trade Commission shall hereafter be composed of seven commissioners, who shall be appointed by the President, by and with the advice and consent of the Senate, and not more than four of whom shall be members of the same political party. The two additional commissioners who shall be appointed pursuant to this Act shall continue in office through September 25, 1936, and September 25, 1937, respectively, the term of each to be designated by the President, but their successors shall be appointed for terms of seven years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the commissioner whom he shall succeed. No commissioner shall engage in any other business, vocation, or employment, or hereafter effect any transaction in any security (other than exemipted security) unless ten days prior to such transaction he shall notify in writing the other members of the Commission of his intention to effect such transaction, and shall also notify in writing the Commission that such transaction has been effected, which later notice shall immediately be made a matter of public record by the Commission. The President is authorized by his order to divide the members of the Commission into as many divisions (each to consist of not less than three members) as he may deem necessary, which may be changed from time to time. Any commissioner may be assigned to and may serve on such division or divisions as the President may direct, and the senior in service of the commissioners constituting any of said divisions hall act as chairman thereof. In case of vacancy in any division, or of absence or inability to serve thereon of any commissioner thereto assigned, the chairman of the Commisison or any commissioner designated by him for that purpose, may temporarily serve on said division until the President shall otherwise order. The Commission may by order direct that any of its work, business, functions, or powers arising under this Act, an Act to provide full and fair disclosure of the character of securities sold in interstate and foreign commerce and through the mails, and to prevent frauds in the sale thereof, and for other purposes, approved May 27, 1933; an Act to encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works, and for other purposes, approved June 16, 1933; an Act to promote export trade, and for other purposes, approved April 10, 1918; an Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes, approved October 15, 1914; and an Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes, approved September 26, 1914; or under any statutory provisions amendatory thereof or supplemental thereto, or under any amendment which may be made to any of said Acts, or under any other Act or joint resolution which has been or may be approved, or in respect of any matter which has been or may be referred to the Commission, be assigned or referred to any of said divisions for action thereon, and may by order at any time amend, modify, supplement, or rescind any such direction. All such orders shall take effect forthwith and remain in effect until otherwise ordered by the Commission. In conformity with and subject to the order or orders of the Commission in the premises, each division so constituted shall have power and authority by a majority thereof to hear and determine, order, certify, report, or otherwise act as to any of said work, business, functions, or powers so assigned or referred to it for action, and in respect thereof the division shall have all the jurisdiction and powers now or then conferred by law upon the Commission, and be subject to the same duties and obligations. Any order, decision, report made or other action taken by any of said divisions in respect of any matters so assigned or referred to it shall have the same force and effect, and may be made, evidenced, and enforced in the same manner as if made, or taken by the Commission. The Secretary and seal of the Commission shall be the secretary and seal of each division thereof. After a decision,

order, requirement, rule, or regulation has been made by any said division, any party aggrieved thereby may, according to such regulations as may be pre scribed by the full Commission, make application for rehearing of the same, or any matter determined therein. If sufficient reason be made to appear for granting such a rehearing, the full Commission in its discretion shall do so, and the rehearing shall be held before the full Commission. In case a rehearing is granted, the proceedings thereupon shall conform as nearly as may be to the proceedings in the original hearing, except as the full Commission may other wise direct; and if, in its judgment, after such rehearing and the consideration of all facts, including those arising since the former hearing, it shall appear that the original decision, order, or requirement is in any respect unjust or unwarranted, the full Commission may reverse, change, or modify the same accordingly. Any decision, order, or requirement made after such rehearing, reversing, changing, or modifying the original determination shall be subject to the same provisions as an original order. No such application for a rehearing shall excuse any person from complying with or obeying any decision, order, or requirement of a division, or operate in any manner to stay or postpone the enforcement of any decision, order, requirement, rule or regulation, without the special order of the full Commission.

(b) For the purposes of this Act and of the Securities Act of 1933, the Federal Trade Commission may select, employ, and fix the compensation of such attorneys, examiners, and other special experts as shall be necessary for the transaction of the business of the Commission with respect to such Acts without regard to the provisions of other laws applicable to the employment and compensation of officers or employees of the United States.

SEPARABILITY OF PROVISIONS

Sec. 33. If any provisions of this Act, or the application of sach provision to any person or circumstance, shall be held invalid, the remainder of this Act, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.

EFFECTIVE DATE

SEC. 34. This Act shall become effective upon its enactment, except that section 5 and section 11 (b) (c) (d) (e) shall become effective on July 1. 1934, and sections 4, 6, 7, 8 (a) (8), 9, 10, 11 (a), 12, 13, 14, 15, 16, 17, 18, and 29 shall become effective on August 1, 1934.

The CHAIRMAN. I have communications and statements here from the following gentlemen, which will be inserted in the record at this point: Mr. Arthur W. Sewell, Philadelphia, Pa.; the New York Produce Exchange, 2 Broadway, New York, N.Y.; National Association of Mutual Savings Banks, 343 Madison Avenue, New York, N.Y.; a letter from J. Harry Covington, Esq., counsel for the American Institute of Accountants, submitting a statement on behalf of the American Institute of Accountants; Daniel J. Hennessy, president Controllers Institute of America, 1 East Forty-second Street, New York, N.Y., enclosing a statement by the Controllers Institute of America; the National Association of Building Owners and Managers, signed by Mr. R. B. Beach, executive secretary, 134 South LaSalle Street, Chicago, Ill.; Mr. Harry J. Gerrity, 1001 Hill Building, Washington, D.C., with a statement of Mr. Richard G. Babbage, representing the Real Estate Board of New York, N.Y.; a statement from Mr. John C. Legg, Jr., representing 18 broker-dealers of Baltimore, Md.; the Merchants Association of New York, N.Y., by Mr. Louie K. Comstock, president, enclosing a statement by that association; the National Association of Railroad and Utilities Commissioners, by Mr. John E. Benton, general solicitor, enclosing a memo

randum by Mr. Adolph Johnson, chief counsel, Public Service Commission of Wisconsin; and the National Association of Manufacturers of the United States, 11 West Forty-second Street, New York, N.Y., by Mr. George H. Houston, vice president. (The communications and statements referred to are as follows:)

PHILADELPHIA, March 9, 1934. Hon. SAM RAYBURN,

Chairman House of Representatives, Washington, D.C. DEAR MR. RAYBURN: As you see, I am taking the liberty of forwarding to you under this cover duplicates of arguments submitted yesterday to the Senate Committee on the National Securities Exchange Act of 1934, which were received by said committee and made part of the record.

Myself and my associates, Mr. Harrison Hoblitzelle, president General Steel Castings Corporation, Eddystone, Pa., and Mr. Edward B. Leisenring, president Westmoreland Coal Co., Philadelphia, would be very much pleased and distinctly benefited should you feel that you consistently can accept the written part of the arguments that we placed before the Senate committee and make them a part of the House record in the premises if, as seems to be the necessary condition, we have passed the time when we could appear and make an oral argument before your honorable body. With the hope that this can be done, we shall be deeply pleased if you would be so kind as to permit the distribution of the enclosed mimeographed copies of arguments to the members of your committee whose names appear on the margin.

May I add that in case you should wish us to come to a later hearing and shall so inform us, we shall be delighted to come back to Washington for oral argument on short notice. With assurances of our highest consideration, I beg you to believe me, Sincerely yours,

ARTHUR W. SEWALL.

NATIONAL SECURITIES EXCHANGE ACT OF 1934 On Friday, February 23, 1934, a gathering of those interested in the above act was held at the Midday Club, Philadelphia, at 4 o'clock in the afternoon and it was attended by a representative group of upward of 200 manufacturers, business men, insurance company executives, and bankers.

At this meeting the following resolutions were adopted:

Resolved, that it is the sense of this meeting that the National Securities Exchange Act of 1934 in the form now before the respective committees of the Senate and House of Representatives of the United States Congress is detrimental to the business interests of this country and to the individuals interested in the welfare of the corporations; it produces a conflict of authority between the Federal Trade Commission and other constituted governmental agencies competent to regulate the corporations subject to their jurisdiction, such as financial institutions, railroads, and public utilities, and appears to destroy completely the jurisdiction of many State regulatory bodies.

"Resolved that it is the sense of this meeting that the National Securities Exchange Act should be opposed in its present form, and that unless so amended that its harmful and objectionable features are eliminated, the passage of this bill by the United States Congress should be opposed and the efforts of those represented by this meeting should be directed to accomplish its defeat.

** Resolved that the chairman of the meeting be and is hereby requested and authorized to appoint a committee of such number as he may deem proper to act for the interests represented by this meeting with power to take such steps as in their judgment may seem necessary to bring to the attention of the members of the Senate and House of Representatives of the Congress of the United States the reason why the National Securities Exchange Act should not be passed in its present form." Mr. Joseph Wayne, Jr.,

president of the Philadelphia National Bank and president of the Philadelphia Clearing House Association, presided, and, as authorized by this meeting, appointed the following committee:

Mr. Benjamin Rush, president, Insurance Co. of North America, Philadelphia; Mr. Arthur W. Sewal, president, General Asphalt Co., Philadelphia; Mr. Harrison Hoblitzelle, president, General Steel Castings Corporation, Eddystone, Pa.; Mr.

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