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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 five parts: * Part I, containing decisions under the Securities Act of 1933; Part II, the Securites Exchange Act of 1934; Part III, the Public Utility Holding Company Act of 1935; and Part IV, the Investment Company Act of 1940.

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 in some cases to delete from the headnotes all matter not pertinent to the general proposition for which the headnote stood, i. e., the names of companies, the principal amounts of 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.

*During the period covered by this volume there were no opinions containing case headnotes under the Trust Indenture Act of 1939, or the Investment Advisers Act of 1940.

25 S. L. C.

789

PART I

SECURITIES ACT* OF 1933

BROKER-DEALER REGISTRATION

REVOCATION

Sale of Unregistered Securities Where registered broker-dealer sold and delivered after sale securities without the registration required by the Securities Act of 1933, held, willful violation of Section 5 (a) of that Act . . . Page 372 DENIAL

Where applicant for registration as broker and dealer sold and delivered after sale securities, without the registration required under the Securities Act, held willful violation of Section 5 (a) of the Securities Act of 1933 . . . Page 208

DEFINITIONS

Security Assignments of oil and gas leases sold with an undertaking by the seller to drill a well constitute "investment contracts" and are therefore "securities" under Section 2 (1) of the Securities Act of 1933 . . . Page 372

STOP ORDER PROCEEDINGS

MISSTATEMENTS AND OMISSIONS

Where numerous omissions, inaccuracies and inconsistencies were found in various items in the registration statement as well as in the prospectus and other material required to be filed, concerning, among other things, the control of registrant, the business and property of registrant and subsidiaries, its capital stock, the underwriting and distribution of the securities registered, the acquisitions of various properties, remuneration of officers, principal holdings of securities, interest of affiliates in property acquired, and recent sales of securities, held the registration statement, as a whole, is materially misleading by reason of omissions of material fact and material misstatements and a stop order must issue ... Page 334

Where registered broker-dealer misrepresented the results and prospects of a test oil well, held, willful violation of Section 17 (a) of the Securities Act of 1933 and Sections 10 (b) and 15 (c) (1) of the Securities Exchange Act of 1934 and rules under latter statute . . . Page 372 CONSIDERATION OF AMENDMENTS FILED IN COURSE OF PROCEEDING

Where numerous material deficiencies are found to exist in financial statements included in a registration statement which has been on file for a considerable

*The term "Act" as used in Part I of this Digest refers to the Securities Act of 1933. 25 8. I. C.

791

period of time and where revised financial statements were filed during the
course of stop order proceedings, held that it is appropriate under the circum-
stances, prior to acceptance of the revised financial statements as amendments,
to call to public attention the material deficiencies in the original financial
statements and these deficiencies provide an additional basis for entry of a stop
order . . . Page 334
EFFECT OF INSTITUTION OF STOP ORDER PROCEEDINGS

The institution of a stop order proceeding under Section 8 (d) has the effect
of suspending effectiveness of the registration statement until final determination
of the issues raised therein ... Page
SUSPENSION OF TRADING ON NATIONAL SECURITIES EXCHANGE

Where, after correction by amendment of deficiencies in financial statements
in registration statement filed under Securities Act respecting stock issue, de-
ficiencies which remained in financial statements in annual reports filed under
Securities Exchange Act, were not of such materiality as to require suspension
of trading in the stock until correction of the deficiencies, and where a national
securities exchange had of its own motion continued existing suspension of trad-
ing and it appeared that such trading would not be resumed until investors had
sufficient time to assimilate the information supplies in the revised financial
statements, held, no action by Commission was needed to prevent trading in the
stock on the exchange ... Page 1

25 8. I. C.

PART II

SECURITIES EXCHANGE ACT* OF 1934

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BROKER-DEALER REGISTRATION FAILURE TO REGISTER AS BROKER-DEALER

Where broker-dealer engaged in interstate transactions in securities without registering with this Commission, held, willful violation of Section 15 (a) of the Securities Exchange Act of 1934 ... Page 208 GROUNDS FOR REVOCATION

Proceeding to revoke registration of broker-dealer dismissed where evidence fails to establish that broker-dealer participated in or caused a soliciting group to omit from proxy solicitation material filed with this Commission material facts required to be disclosed by Regulation X-14 . . . Page 492

Where registered broker-dealer willfully violated provisions of Securities Exchange Act of 1934 and Rule promulgated thereunder by failing to file required reports of financial condition, held that it is in the public interest to revoke such registration as broker-dealer ... Page 35 WILLFUL VIOLATION OF RULE

Where registered broker-dealer, despite communications from Commission referring to requirement of Rule calling for filing of financial reports and requesting that he file such reports, failed to file, held his failure under the circumstances constituted "willful” violation of Rule within the meaning of Section 15 (b) of the Securities Exchange Act of 1934, notwithstanding asserted belief that the existence of a temporary injunction against him precluded his filing such reports ... Page 32 FAILURE TO DISCLOSE MARKET CONTROL

Where applicant for registration as a broker and dealer sold securities to customers of the firm employing him without disclosing his control of the market in such securities, held, willful violation of Section 17 (a) of the Securities Act of 1933, Sections 10 (b) and 15 (c) (1) of the Securities Exchange Act of 1934 and rules thereunder ... Page 208 PRACTICE AND PROCEDURE

Certification of Record on Petition for Review In certifying corrected transcript of record pursuant to remand of reviewing court, held index to transcript, prepared by record officer of the Commission after Commission's decision and after the filing of a petition for review, erroneously listing certain exhibits as having been received "for identification only” but in fact received in evidence, was not a part of the record upon which Commission's order was based.

*The term "Act" as used in Part II of this Digest refers to Securities Exchange Act of 1934.

25 S. E. C.

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