and the poor load factor (now about 55% as compared with Utah Power's 65%), Utah Power does not consider Telluride's rates as excessive. However, it expects immediately to set about improving the quality of Telluride's service; and it anticipates that, with the improvement of Telluride's load factor and the growth of its business, a reexamination of its rate structure will be in order.

Consistently with Sections 10 (c) (1) and 10 (c) (2) of the Act, we find that the proposed acquisitions will not be unlawful as contrary to State law or detrimental to the carrying out of the provisions of Section 11, and that they will serve the public interest by tending towards the economical and efficient development of an integrated public-utility system.

Since the Utah commision has approved the proposed acquisitions, Section 10(f) of the Act is satisfied.

ISSUANCE OF SECURITIES

With respect to the issuance of common stock by Utah Power to effectuate the exchange, we find the provisions of Section 7(c) (1) (A) of the Act are satisfied and that no adverse findings need be made under Section 7(d).

SOLICITATION OF TELLURIDE'S STOCKHOLDERS

Following our approval of the transactions herein described, Utah Power proposes to hold its offer open for 30 days, but may extend the offer for an additional 30 days. It will send to each of Telluride's uncommitted common and second preferred stockholders a letter and other material, including a copy of our Findings and Opinion herein, soliciting acceptance of the exchange offer. We have reviewed this material and conclude that no adverse findings are necessary under the standards of Section 12(e) and Rule 62 promulgated thereunder. It should be understood, however, that in approving the proposed exchange offer, we are not recommending either its acceptance or rejection. Each individual stockholder should determine whether to accept or reject the offer on the basis of his own independent judgment after careful consideration of the material sent

to him.

ACCOUNTING TREATMENT

The utility plant accounts of Utah Power, Western Colorado, and Telluride are stated on their books at original cost, as required by the Uniform Systems of Accounts for Public Utility Companies as prescribed by the regulatory agencies having jurisdiction with. respect thereto. Utah Power will record its investment in Telluride's second preferred stock at the cost thereof, and its investment in

Utah Power will not register its proposed issue of common stock under the Securities Act of 1933 by reason of the exemption provided in Section 3(a) (10) thereof.

Telluride's common stock at an amount equal to the market value of its own common stock issued in exchange therefor, as prescribed in our Uniform System of Accounts for Public Utility Holding Companies. Assuming a market value of $26 per share for its common stock at the date of the exchange and 100% acceptance of the exchange offer, Utah Power will record its investment in the Telluride common stock at $1,376,440, of which $677,632 will be the par value of the 52,940 shares of Utah Power's common stock issued therefor and $698,808 will be premium on capital stock. The proposed accounting treatment appears to be appropriate.

FEES AND EXPENSES

Utah Power has estimated its fees and expenses in connection with the proposed transactions at $6,000, including attorneys' fees $1,000, printing $1,000, Federal stamp taxes $745, listing fees (New York Stock Exchange) $530, auditors' fees $250, transfer agent and registrar $210, and miscellaneous expenses $2,265. We do not find such expenses to be unreasonable.

EXCEPTION FROM COMPETITIVE BIDDING

Utah Power has requested that we except the proposed issuance and sale of its common stock from the competitive bidding requirements of Rule 50 promulgated under the Act. We are of the opinion that competitive bidding is not appropriate to aid us in determining whether the terms and conditions of the proposed exchanges are proper, and the request is accordingly granted.

CONCLUSION

Having considered the proposed transactions and found that they meet the applicable requirements of the Act and our rules thereunder, and observing no basis for making adverse findings in respect thereof, our order will issue granting the application and permitting the declaration to become effective, subject only to the conditions contained in Rule 24.

An appropriate order will issue.

By the Commission (Chairman Gadsby and Commissioners Orrick, Patterson, Hastings and Sargent).

APPENDIX A

UTAH POWER & LIGHT COMPANY AND SUBSIDIARY

Condensed consolidated balance sheet as at November 30, 1957, and pro forma giving effect to the acquisition of all the voting securities of Telluride Power Company

APPENDIX B

UTAH POWER & LIGHT COMPANY AND SUBSIDIARY

Condensed consolidated statement of income for the twelve months ended November 30, 1957, and pro forma, giving effect to the acquisition of all the voting securities of Telluride Power Company

• The second preferred stock of Telluride Power Company is to be acquired by Utah Power and, accordingly, the dividends on such stock are eliminated in consolidation.

IN THE MATTER OF

DEMPSEY & COMPANY

File No. 8-833. Promulgated May 7, 1958

(Securities Exchange Act of 1934-Sections 15 (b) and 15A)

BROKER-DEALER REGISTRATION

Grounds for Revocation of Registration

Grounds for Suspension from National Securities Association

Violations of Securities Act

Offer, Sale and Delivery of Unregistered Securities

Where registered broker-dealer was one of a group purchasing sizable blocks of unregistered convertible debentures from the issuer in purported reliance on exemption from registration for private offerings, and registrant immediately resold some debentures to a small group of friends, relatives and associates, subsequently sold additional debentures to several other friends and associates, and upon learning that issuer's prospects were not as encouraging as anticipated, sought to sell debentures and underlying common stock through another broker-dealer and through the specialist on the stock exchange on which the common stock was listed, and converted a substantial portion of debentures and sold on the exchange the common stock received in exchange therefor, held, registrant was an underwriter as defined in Securities Act, and its sales and offers of unregistered securities constituted violations of Section 5 of the Act. Public Interest

Where registered broker-dealer willfully violated Section 5 of Securities Act through sales of unregistered securities but, among other things, violations appeared to be result of misconceptions regarding availability of exemption for private placements and lack of due care rather than design to violate, and registrant and principal officer have been in securities business for many years and have not been subject to any other disciplinary proceedings, held, under all the circumstances it is appropriate in the public interest and for the protection of investors to suspend registrant from national securities association. APPEARANCES:

Philip A. Loomis, Jr., Walter G. Holden, and John P. Dodge, for the Division of Trading and Exchanges of the Commission.

Milton H. Cohen and Charles E. Pitte of Dallstream, Schiff, Hardin, Waite and Dorschel, for Dempsey & Company and Joseph E. Dempsey.

FINDINGS AND OPINION OF THE COMMISSION

These are proceedings pursuant to Sections 15 (b) and 15A (l) (2) of the Securities Exchange Act of 1934 (“Exchange Act") to determine whether to revoke the registration as a broker and dealer of Dempsey

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