Securities and Exchange CommissionEighteenth and Locust Street, Philadelphia 3, Pa.1
COMMISSIONERS Chairman Ganson Purcell Robert E. Healy Robert K. McConnaughey Sumner T. Pike (Vacancy) STAFF Secretary Orbal L. DuBois The Assistant to the Chairman Peter T. Byrne Special Assistant to the Commission Leslie T. Fournier Executive Assistant to the Commission Robert M. Blair-Smith Director of Personnel Philipp L. Charles Solicitor Roger S. Foster Chief Accountant William W. Werntz Director, Corporation Finance Division Baldwin B. Bane Director, Public Utilities Division Milton H. Cohen Director, Trading and Exchange Division James A. Treanor, Jr. Director, Administrative Division Hastings P. Avery
Creation and Authority.--The Securities and Exchange Commission was created under authority of the act approved June 6, 1934, known as the Securities Exchange Act of 1934 (48 Stat. 881; 15 U.S.C. 78a to 78jj). The authority of the Commission has been increased by the passage of the following: the act approved August 26, 1935, known as the Public Utility Act of 1935, title I of which, vesting new duties in the Commission, is known as the Public Utility Holding Company Act of 1935 (49 Stat. 803; 15 U.S.C. 79a to 79z-6); the act approved August 3, 1939, known as the Trust Indenture Act of 1939 (53 Stat. 1149; 15 U.S.C. 77aaa to 77bbbb); the act approved August 22, 1940, known as the Investment Company Act of 1940) (54 Stat. 789; 15 U.S.C. 80a-1 to 80a-52); the act approved August 22, 1940, known as the Investment
Advisers Act of 1940 (54 Stat. 847; 15 U.S.C. 80b-1 to 80b-21). The Commission's authority was further increased by the provisions of Chapter X of the National Bankruptcy Act, as amended, of June 22, 1938 (52 Stat. 883; 11 U.S.C. 501-676).
Purpose.--The Commission was organized on July 2, 1934. Its purpose is to administer the Security Act of 1933, as amended (48 Stat. 74; 15 U.S.C. 77a-77aa), the Securities Exchange Act of 1934, as amended, the Public Utility Holding Company Act of 1935, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, and to perform certain duties in connection with corporate reorganizations in Federal courts, under the provisions of Chapter X of the National Bankruptcy Act, as amended.
Organization.--The Commission is composed of five members appointed by the President by and with the advice and consent of the Senate. Not more than three members may be of the same political party. The statutory term of office of a commissioner is 5 years, with terms arranged in such manner that a term expires each year.
The staff of the Commission has been organized into the following divisions and offices:
Commissioners and Staff
Opinion Writing Office
Office of the Solicitor
Office of the Chief Accountant
Corporation Finance Division
Public Utilities Division
Trading and Exchange Division
The functions of the Commission are divided into the following groups: supervision of registration of security issues and suppression of fraudulent practices in the sale of securities under the Securities Act of 1933; supervision and regulation of transactions and trading in outstanding securities, both on the stock exchanges and in the over-the-counter markets, as provided in the Securities Exchange Act of 1934; regulation of public-utility holding companies under the Public Utility Holding Company Act of 1935; supervision of indentures used in the public offering of new security issues as provided under the Trust Indenture Act of 1939; registration and regulation of investment companies and investment advisers under the Investment Company Act of 1940 and the Investment Advisers Act of 1940; and the preparation of advisory reports on plans, and participation as a party, in corporate reorganizations under Chapter X of the National Bankruptcy Act.
Securities Act of 1933.--This act authorizes the Commission to compel a full and fair disclosure to investors of the material facts regarding securities publicly offered and sold in interstate commerce or through the mails, and to prevent fraud in the sale of securities. Registration statements covering securities to be sold are filed on forms promulgated by the Commission. These registration statements are required to contain specified information, including financial statements, certain exhibits, and the form of the prospectus proposed for use in selling the securities.
No securities may be offered or sold to the public in interstate commerce or through the mail by issuers, underwriters, or dealers unless
there is in effect a registration statement covering the securities, or unless they are exempt from registration under the law. The effective date of a registration statement is the twentieth day after filing or such earlier date as the Commission may determine, having due regard to the adequacy of the information respecting the issuer theretofore available to the public; to the facility with which the nature of the securities to be registered, their relationship to the capital structure of the issuer and the rights of holders thereof, can be understood; and to the public interest and the protection of investors.
A prospectus giving the pertinent facts as to the issue must be delivered to the prospective purchaser in connection with any sale of a registered security involving the mails or interstate commerce. The Commission is empowered to refuse or suspend registration in cases where the information given is incomplete or misleading in any material respect. The act provides for civil and criminal liability on the part of issuers and others for the fraudulent sale of securities.
Securities Exchange Act of 1934.--This act is designed to eliminate abuses in the securities markets, and to make available currently to the public sufficient information concerning the management and financial condition of the corporations whose securities are listed on national securities exchanges to enable the investor to act intelligently in making or retaining his investments and in exercising his rights as a security holder.
The act prohibits the manipulation of securities prices and the use of fraud in securities transactions. It provides for registration of and supervision over stock exchanges, brokers and dealers, and associations of brokers and dealers.
Regulation of the use of the national credit to finance trading in securities is accomplished through margin requirements fixed under this act by regulations promulgated by the Board of Governors of the Federal Reserve System. Such regulations are enforced by the Commission.
The acts provides for the registration of securities listed on exchanges and, under certain circumstances, for the admission of securities to unlisted trading privileges upon exchanges. Where a security is listed and registered on an exchange, the issuer is required to file periodic reports relating to its condition; officers, directors, and principal stockholders are required to report their holdings to the Commission; solicitations of proxies in respect of registered securities must be accompanied by certain information specified in the act and in the rules of the Commission.
Public Utility Holding Company Act of 1935.--This act is designed to eliminate abuses and to provide a greater degree of protection for investors, consumers, and the public in the field of public utility holding company finance and operation.
The duties of the Commission include the effectuation of geographic and corporate simplification of holding-company systems; supervision of security transactions by holding companies and subsidiaries; supervision of acquisitions of securities, utility assets, and other interests by holding companies and their subsidiaries; and supervision of dividends, proxies, intercompany loans, and service, sales, and construction contracts.
Trust Indenture Act of 1939.--This act requires that bonds, notes, debentures, and similar securities (unless exempted by the act) publicly
offered for sale be issued under an indenture which meets certain statutory standards, including provisions for a disinterested corporate trustee with adequate powers and adequate duties and responsibilities with respect to the protection and the enforcement of the rights of the bondholders. Compliance with these requirements is secured through the statutory procedure for qualification of indentures with the Commission.
Investment Company Act of 1940 and Investment Advisers Act of 1940.--The first act provides for the registration and regulation of all types of investment trusts and investment companies. The second act provides for the registration of persons engaged in the investment advisory business and prescribes prohibitions against certain abuses which have been found to exist.
Chapter X of the National Bankruptcy Act, as Amended.--This chapter, which in 1938 extensively revised section 77B of the act, affords the appropriate machinery for the reorganization of corporations in the Federal courts under the bankruptcy power. The duties of the Commission under the chapter are, primarily, to act as a participant in proceedings thereunder, at the request or with the approval of the court, in order to provide independent expert advice on matters arising in such proceedings. The Commission is also empowered to prepare, for the benefit of the courts and security holders, advisory reports on plans or reorganization submitted in such proceedings.
No Guaranty by Commission Against Loss to Investors.--No statue administered by the Commission guarantees investors against loss. The Commission is given certain powers to control the issuance of securities by public utility holding companies and their subsidiaries under the Public Utility Holding Company Act of 1935. With regard to all other issues of securities, however, the Commission can merely require complete disclosure of information, in the light of which an investor may adequately form his own opinion.
Complaints and Inquires Regarding Securities.--Complaints and inquiries should be directed to the Philadelphia office or to any regional office of the Securities and Exchange Commission. Registration statements and other public documents filed with the Commission are available for public inspection at the public reference room at the home office of the Commission in Philadelphia and, to a more limited extent, in its regional offices in New York and Chicago. (Photostatic copies of the material may be purchased from the Commission at a price of 10 cents a page for orders of less than 100 pages and 7 cents for each additional page over 100.)
Divisions and Offices of the Commission
Opinion Writing Office.--This Office is responsible directly to the Commission and is charged with the duty of assisting the Commission in the preparation of findings, opinions, and orders based upon evidence in the records of hearings, for promulgation by the Commission in contested cases arising under the statutes administered by it.
Office of the Solicitor.--This Office has supervision over litigation instituted by or against the Commission, including petitions for review of Commission decision. The Solicitor is the chief legal adviser to the Commission.
Office of the Chief Accountant.--This Office consults and advises with the Commission on accounting matters; exercises general supervisory control over accounting and auditing policies as they relate to financial statements filed with the Commission; exercises supervisory control over the drafting of requirements governing the form and content of financial statements filed with the Commission and requirements regarding uniform systems of accounts; prepares briefs, reports, and memorandums regarding highly technical or controversial accounting and auditing questions; and conducts studies, investigations, and researches involving accounting.
Corporation Finance Division.--This Division is responsible for (1) the examination of statements for the registration of securities under the Securities ct and the Securities Exchange Act (as well as subsequent annual or other periodic reports), the conduct of hearings in refusal or top order proceedings against registration statements for securities under the Securities Act and in proceedings for suspension or withdrawal from registration of securities listed on national securities exchanges under the Securities Exchange Act, and the examination and handling of proxy statements filed under the Securities Exchange Act; (2) the examination of trust indentures filed for qualification under the Trust Indenture Act of 1939; (3) the performance of the duties and functions of the Commission in corporate reorganization proceedings under Chapter X of the National Bankruptcy Act, as amended; (4) the performance of the Commission's duties and responsibilities under the Investment Company Act of 1940; and (5) the supervision and direction of investigations into complaints or other evidences of violation of related provisions of the above-mentioned statutes.
Public Utilities Division.--This Division is responsible for the work involved in the Commission's administration of the Public Utility Holding Company Act of 1935, relating to public utility holding companies and their subsidiary and affiliated companies Included in the matters arising thereunder over which the Commission has jurisdiction are the issue and sale of securities; the acquisition of securities, utility assets, or interests in other businesses; dividend practices; proxy and other solicitations; intercompany loans; maintenance of competitive conditions; service, sales and construction contracts; and geographic and corporate simplification The consideration of these matters involves investigations, financial, and legal analysis, and the conduct of hearings and the development of complete factual records upon which Commission actions are based.
Trading and Exchange Division.--Under the Securities Exchange Act this Division is responsible for the constant surveillance of the securities markets to prevent and to detect manipulation and fraud. The Division supervises the conduct of investigations of manipulative and deceptive acts and practices on national securities exchanges and in the over-the-counter markets upon complaint or where evidence of said practices come to its attention. It is responsible for the registration of national securities exchanges, national associations of securities dealers, and over-the-counter brokers and dealers; the formulation of rules for the regulation of activities in securities markets; superivison of the rules of national securities exchanges and national associations of securities dealers; the conduct of hearings in proceedings
to revoke the registration of over-the-counter brokers and dealers, to suspend or expel members from national associations of securities dealers, and to suspend or expel members from national securities exchanges; and the conduct of research activities and other studies for use by the Commission, and the assembling and maintenance of statistical and analytical information on securities markets. The Division also is responsible for the performance of the Commission's duties and functions under the Investment Advisers Act of 1940.
Administrative Division.--This Division is responsible for the administrative, fiscal, personnel, clerical, and other business management activities of the Commission, and has custody of the dockets and files of the Commission.
Trial Examiners.--The Commission has a staff of Trial Examiners who are assigned to preside at hearings ordered by the Commission, to rule on the evidence offered for introduction at such hearings, and in certain cases to prepare and file with the Commission advisory reports setting forth their findings of fact.
Regional Offices.--The regional offices are charged with the responsibility of conducting trading, accounting, and legal investigations and hearings, with a view to the efficient enforcement of the laws administered by the Commission. The regional offices also participate on behalf of the Commission in reorganization proceedings under Chapter X of the National Bankruptcy Act, as amended, and in injunctive actions instituted by the Commission in the various Federal courts. Each regional office serves the general and investing public by aiding registrants and accounting, legal and investment firms, in complying with the statutes and the rules and regulations administered and enforced by the Commission. Complaints and inquiries may be directed to any regional office of the Commission or to the headquarters office in Philadelphia. Registration statements under the Securities Act and applications for the qualification of indentures under the Trust Indenture Act may be delivered to regional offices for forwarding to Philadelphia. In addition. facilities for the registration of securities and the qualification of indentures are maintained in the San Francisco Office. Registration statements and other public documents filed with the Commission are available for public inspection, to a limited extent, in its regional offices in New York and Chicago.
Regional Offices--Securities and Exchange Commission Location Regional Administrator Address Atlanta 3, Ga. William Green Palmer Building, Forsyth and Marietta Streets Baltimore 2, Md. William M. Malone Room 2410, O'Sullivan Building Boston 9, Mass. Paul R. Bowen Shawmut Bank Building, 82 Devonshire Street Chicago 3, Ill. Thomas B. Hart Bankers Building, 105 West Adams Street Cleveland 13, Ohio Charles J. Odenweller, Jr. Standard Building, 1370 Ontario Street Denver 2, Colo. John L. Geraghty Midland Savings Building, 444 Seventeenth Street Fort Worth 2, Tex. Oran H. Allred 103 U.S. Courthouse, Tenth and Lamar Streets New York 5, N.Y. James J. Caffrey Equitable Building, 120 Broadway San Francisco 5, Calif. Howard A. Judy 625 Market Street Seattle 1, Wash. Day Karr 1411 Fourth Avenue Building
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1. The Washington, D.C. liaison office is located in the Tower Building, 1405 K Street NW.; DIstrict 3633