recognition of registrant's continuing status as registered broker-dealer * Page 291

Where registered broker-dealer induced transactions in accounts of customers which were excessive in volume and frequency in view of character of accounts and took secret profits therefrom, and improperly extended and arranged for credit in cash accounts, held, willful violations of Securities Act and Securities Exchange Act and Rules and Regulations thereunder, and public interest requires revocation of broker-dealer registration and denial of request for withdrawal from registration * * * Page 294

Where registered broker-dealer made false entries in its records showing deposits of checks received from president and thereby overstated its bank account balance at times when the account was overdrawn, and repeatedly within a 12 month period engaged in security transactions while in violation of net capital rule, held, in public interest to revoke its registration and to deny its request for withdrawal *** Page 309

Where registered broker-dealer was enjoined from improperly extending credit, failing to send confirmations of transactions with customers and failing properly to record transactions, in violation of Sections 7, 15, and 17 of the Securities Exchange Act, and was convicted of criminal contempt of the injunction, because of violations after its entry, held, in the public interest to revoke broker-dealer's registration and deny its request for withdrawal * * * Page 400

Where registered broker-dealer failed to file required financial report and to file required amendment to application for registration to correct address of principal place of business, and requests withdrawal of registration, held, under all the circumstances, including fact that registrant never actually engaged in securities business, the public interest does not require revocation of registrant's registration but is adequately served by permitting withdrawal *** Page 403 Where registered broker-dealer is permanently enjoined from effecting securities transactions not promptly recorded in his books and records, has failed to keep current required books and records, has employed fraudulent devices in the sale of securities in that he used customers' funds for his own benefit, failed to deliver their securities promptly and sold securities at prices not bearing a reasonable relationship to the market prices, and has sold securities to a customer and prior to delivery thereof has in violation of rule prohibiting hypothecation of customers' securities permitted securities of a like kind owned by him to continue to be subject to a lien for a loan made to him, held, under all the circumstances public interest and protection of investors require revocation of registration, expulsion from national securities association and denial of request for withdrawal of registration *** Page 518 Request for withdrawal from registration by registered broker-dealer who has failed to file required financial reports and who has been permanently enjoined from effecting securities transactions without disclosing that he is unable to meet his current liabilities and from violating the record keeping requirements of Section 17 (a) of the Securities Exchange Act and Rule 17a-3 thereunder, granted, under all the circumstances, including registrant's representation that he intends to limit his future activity in the securities business to employment in a supervised capacity by another broker-dealer and his agreement that evidence in instant proceedings might be used in any proceeding relating to any future registration application involving him * Page 627

Where president and controlling person of registered broker-dealer while an officer of another broker-dealer had caused latter to make false and misleading statements in connection with the sale of securities-concerning, among other

things, prospective increases in market prices, guarantees against loss, listing
on an exchange, and the origin of a newspaper reprint circulated to customers-
and to violate Regulation T by failing to cancel purchases by customers in
special cash accounts when customers did not make full cash payment within
7 days after the date of purchase, and where registrant refused to make its
books and records available for reasonable inspection, held, under all the cir-
cumstances public interest and the protection of investors require revocation
of registration and denial of request for withdrawal of registration
Page 744

Where registered broker and dealer and its principal officers and controlling
stockholders are permanently enjoined by state court from engaging in securi-
ties business in that state other than as salesmen for registered broker-dealers,
and registrant failed to comply with net capital requirements in willful viola-
tion of Section 15(c)(3) of Securities Exchange Act of 1934 and Rule 15c3-1
thereunder, held, under all the circumstances it is necessary and appropriate
in the public interest and for protection of investors to revoke broker-dealer
registration, to expel registrant from national securities association, and to
deny request for withdrawal from registration *** Page 856

Where registered broker-dealer failed to comply with net capital require-
ments in willful violation of Section 15(c)(3) of Securities Exchange Act of
1934 and Rule 15c3-1 thereunder, and is permanently enjoined by Federal
Court from further violation of net capital rule, held, under all the circum-
stances it is in the public interest to revoke broker-dealer registration and to
deny request for withdrawal from registration *** Page 918

NATIONAL SECURITIES ASSOCIATION

Employment of Person Convicted of Felony

Application for approval of continuance in membership in national securities
association of member employing a person who within the preceding 10 years
had been convicted of violation of the antifraud provisions of the Securities
Act of 1933 and the Federal mail fraud statute based on his failure adequately
to supervise salesmen, granted, where none of the charges concerned employee's
own dealings with customers, he will not be employed in any supervisory capac-
ity, and he will be subject to close supervision by officers of applicant *
Page 16

Employment of Person Whose Registration Has Been Revoked

Application by national securities association for approval of continuance in
membership of member with an employee whose registration as broker-dealer
had been revoked five years previously for failing to deliver securities purchased
by one customer and to pay for securities acquired from another, and failing to
disclose to customers the capacity in which he was acting, and failing to keep
books and records and file a financial report, granted, on condition that employee
be bonded *** Page 76

Employment of Person Found Cause of Revocation and Expulsion

Application by national securities association for approval of continuance in
membership of member with employee who had been found cause of revocation
of broker-dealer registration and expulsion from association membership of firm
in which he had been sole general partner, granted, where prior conduct causing
revocation and expulsion related to employee's direction of firm's affairs rather
than his activities as salesman and where employee is to be only a bonded sales-
man under close supervision of employer's partners and will not have custody
of customers' funds or securities * * * Page 397

Application by national securities association for approval of continuance in membership of a broker-dealer while employing as salesman an individual who had been president and a director of firm whose broker-dealer registration had been revoked and which had been expelled from association membership, granted, where 12 years had elapsed since the transactions on which the revocation and expulsion had been based and record indicates no further wrongdoing by employee, and where the employee is to be under close supervision by an officer of the member firm *** Page 602

Application for approval of continuance in membership in national securities association of member employing person who had been found to be the cause of an order of revocation and expulsion based on false entries in records and violations of net capital requirements, granted, under all the circumstances, including fact employee will be subject to close supervision by partner and office manager of employing member *** Page 726

Violations of Rules of Fair Practice

Proceedings for review of action of national securities association suspending and fining member and censuring member and its principal partner, a registered representative, for selling securities at a price that was unfair and not reasonably related to current market price, permitting unregistered salesmen to transact business, failing to disclose to purchasers of securities that the member and the issuer of such securities were under common control, and failing to endorse in writing a record of salemen's transactions, dismissed, the Commission finding that such conduct violated association's rules of fair practice and was inconsistent with just and equitable principles of trade, and that penalties imposed were not excessive or oppressive having due regard to the public interest * Page 314

Proceeding for review of action of national securities association fining and censuring member for selling securities to customers and purchasing securities from customers at prices that were unfair and not reasonably related to current market prices, dismissed, the Commission finding that such conduct was engaged in and violated association's rules of fair practice and was inconsistent with just and equitable principles of trade, and that penalties imposed were not excessive or oppressive, having due regard to the public interest *** Page 908 Where national securities association disciplined member on ground he violated association rule requiring members to observe high standards of commercial honor and just and equitable principles of trade, by failing to make good delivery of stock and to reimburse buyer for damages, and where Commission finds on review that bona fide controversy exists between member and buyer, that member offered to make good delivery and deferred such delivery on buyer's advice, and offered to submit dispute for arbitration, held, conduct of member did not violate the rule, and disciplinary action must be set aside Page 113

REGISTRATION OF SECURITIES ON NATIONAL SECURITIES EXCHANGE Where corporation whose stock is registered on national securities exchange failed to file required reports and filed false, misleading and inadequate reports and preliminary proxy material concerning, among other things, the acquisition and disposition of large blocks of securities, financing and other undertakings with respect thereto, the interest in the transactions of the corporation's president and other insiders, the revision of transactions to the disadvantage of the corporation, increases in the amount of the corporation's outstanding stock, the gain reportedly realized on an acquisition of securities in exchange for other securities, the existence of pending bankruptcy reorganization proceedings in

volving subsidiaries whose securities had been acquired, litigation involving the
corporation, and the president's use for his own benefit of securities owned or
held by the corporation or a subsidiary; and where corporation filed financial
statements which were not certified, held, violations of Sections 13 and 14(a) of
Securities Exchange Act of 1934 and rules thereunder.

Notwithstanding disassociation from corporation of former president who was
principally responsible for corporation's violations of reporting and proxy rules,
and notwithstanding representation of corporation that a new and adequate
board of directors would be sought, held, protection of investors required with-
drawal of exchange registration of corporation's stock, where violations had
been flagrant and continued after institution of proceedings, existing manage-
ment of corporation included persons selected or recommended by former presi-
dent, record indicated lack of candor and reluctance on part of present chief
executive officer of corporation, who had participated in the violations, to dis-
close facts respecting the transactions involved in the violations, and there was
no assurance that an independent management would be elected *** Page 405
Where corporation whose stock is registered on national securities exchange
failed to file required annual, semi-annual and current reports, filed certain
current reports late, and filed false, misleading and inadequate reports, concern-
ing the acquisition of significant amounts of oil, gas and mining properties and
other physical assets, increases and decreases in outstanding securities, and the
distribution of large amounts of unregistered stock in violation of the Securi-
ties Act of 1933, and filed a false and misleading proxy statement as to the man-
agement's intention to issue shares available from an increase in the company's
authorized capitalization, held, violations of Sections 13 and 14(a) of Securities
Exchange Act of 1934 and rules thereunder requiring withdrawal of exchange
registration of stock for the protection of investors * * * Page 475

Where corporation whose stock is registered on national securities exchange
failed to file required annual and current reports and filed false, misleading and
inadequate reports concerning, among other things, the offer and sale of its stock
in violation of registration provisions of Securities Act of 1933, the registration
of such stock under that Act, the issuance of an injunction restraining further
sales of unregistered shares, acquisitions and dispositions of assets and litiga-
tion pertaining thereto, the grant of options to purchase its stock, and control of
corporation, held, violations of Section 13 of Securities Exchange Act of 1934
and rules thereunder ✶ ✶✶ Page 497

Where corporation asserts that violations by it in failing to file required re-
ports and filing false, misleading and inadequate reports were unintentional and
due in large part to reliance on counsel, that it has withdrawn certain stock
options granted by it and intends to seek cancellation of others, and that the
management is engaged in formulating plan of rehabilitation, but is insolvent,
lacks physical assets, has ceased operations and prospect of rehabilitation is
remote, and no attempt has been made to cure reporting deficiencies, held, under
all the circumstances the protection of investors requires withdrawal of exchange
registration of corporation's stock *** Page 497

Where principal promoter of corporation was at most times its largest single
stockholder, selected its president and general counsel, controlled its finances
and operations, negotiated acquisitions and dispositions and determined prices
of properties, participated in board meetings although not a member and called
some of its meetings, and at only meeting of stockholders was corporation's
spokesman together with his son who was vice-president, and where presi-
dent stated that promoter controlled corporation but that most of his proposals
were rejected by board, held, promoter controlled and was parent of corporation

under Commission rules and such fact was required to be disclosed in reports by corporation *** Page 497

Where corporation whose stock is registered on national securities exchange failed to file required annual reports, filed an annual and current report late, and filed an annual report which was false and misleading in overstating development expenses, held, violations of Section 13 of Securities Exchange Act of 1934 and rules thereunder * * * Page 525

Protection of Investors

Where corporation which has failed to comply with reporting requirements over a period of 6 years requests deferment of any order of suspension or withdrawal so as to permit it to comply with such requirements, asserting that during the larger part of the period of non-compliance its officers and records were widely scattered and it had no funds for the employment of accountants or attorneys, held, under all the circumstances, including fact that corporation has not brought its findings up to date and has been substantially inactive and without funds or income for a number of years, the protection of investors requires withdrawal of exchange registration of corporation's stock *** Page 525

Where corporation whose stock is registered on national securities exchange filed required current reports late and such reports contained misleading statements and omitted material facts concerning, among other things, exemptions from registration under Securities Act of 1933, recipients of stock issued for property, and valuation of property, held, violation of Section 13 of Securities Exchange Act of 1934 and rules thereunder * ** Page 538

Where issuer states that violations of reporting requirements were the result of lack of knowledge and legal counsel and it desires to correct information, and where the Commission finds violations did not stem from any plan or intent to defraud investors, held, consistent with protection of investors to suspend the exchange registration of securities for a period of 60 days, provided that if within such period issuer files corrected reports suspension will thereupon be terminated and proceedings discontinued, but if properly amended reports are not filed within the 60-day period exchange registration of securities will be withdrawn * * * Page 538

Where corporation whose stock is registered on national securities exchange failed to file current reports until after institution of proceedings to suspend or withdraw registration and after expiration of prescribed time for filing, held, violations of Section 13 of Securities Exchange Act of 1934 and rules thereunder * * * Page 553

Where corporation failed to file within prescribed time current reports covering dispositions of assets, defaults on debt securities, material litigation and stock options, and annual reports filed subsequent to institution of proceedings failed to include required financial statements, held, under all the circumstances protection of investors requires withdrawal of exchange registration of corporation's stock *** Page 553

Where control of dormant corporation with stock registered on national securities exchange pursuant to Securities Exchange Act of 1934 was acquired by promoter for purpose of acquiring properties by issuance of registrant's stock, a materially false and misleading proxy statement was issued concerning proposed increase in authorized stock in violation of Section 14(a) of the Act and Rule 14a-9, and corporation failed to file required current report of issuance of stock for such properties, in violation of Section 13 of the Act and Rule 13a-11, held, withdrawal of registration of corporation's stock on national securities exchange necessary and appropriate for protection of investors *** Page 559