*1 regulations appear me to Since rationality, I think a firm basis have them down. power to strike

we have opinion we, judges, If alternative other conceivable that some opinion preferable, in which

would be join, prepared it I am not

enough the strictures to invoke protection

equal of the Four- clause

teenth Amendment. Petitioner, BECK,

Herbert &

SECURITIES EXCHANGE COMMIS- SION, Respondent. Court of

Sixth Circuit.

July 10, 1969. Gardiner,

Donald B. Columbus, Ohio, Young, David J. Columbus, Ohio, Dun- bar, Murphey, Kienzle & Columbus, Ohio, counsel, North, Walter P. Associate Securities & *2 (1) profit- the his customers C., Philip A. sented to Washington, sion, D. ability in stock of Counsel, of an investment the H. Jr., Loomis, Jacob Thrift, (2) the and Credit Brian Certified Stillman, Asst. General investment, (3) safety the return of the Ex- Eisenberg, Atty., and M. Securities expected, (4) oppor- the Washington, that could be Commission, D. change absorbing resale a tunities for without respondent. for loss, (5) possibilities for the and the McCREE, PECK, and Before listing exchange. of the on an stock Judges. review, petition In for his challenges sufficiency the of the evidence Judge. McCREE, Circuit finding supporting the Commission’s pursuant to review Petitioner seeks .willfully he antifraud that violated the Exchange 25(a) of the Securities Section provisions Act, of the the fair- Securities of 78y(a), order Act, of an 15 U.S.C. § by hearing of him ness accorded Exchange Commission. the Securities Commission, propriety and the of the revoked employ- Commission’s order his registration petitioner’s of broker-dealer ment in the a securities business for employer, Secur- former period of four months. peti- that Corporation, found ities challeng We find the first two anti- tioner’s willful violations es to merit. 25 be without Under Section provisions Act of the fraud Securities findings (a), 78y(a), U.S.C. § cause of Act1 and the were sup the Commission are conclusive if provided, The order revocation. evidence, ported substantial and a re finding however, “not this that view of the record before us makes it operate [petitioner’s] employ- prevent to clear there is substantial evidence in a non- ment in the securities business support in this to the Commission’s supervisory capacity after four findings. peti showing We also determine that if he makes an procedural pro tioner was afforded due adequately supervised.” he will be cess in the to as conducted began working Petitioner for Com- findings. certain these monwealth as a securities previous 1958. He no had connection remaining issue concerns the business, with the securities and his propriety imposed upon of the sanction supervision Common- Under the Securities Ex admittedly inadequate. wealth change In Act, the Commission is invested 1960 he was to instructed sell shares in impose with broad discretion to sanc Corporation, Certified Credit and “appropriate Thrift tions in the inter newly company. est”, formed loan It was in (b)(4), 15 U.S.C. 78o-3 but this § connection with sales of this stock that discretion is not limitless. It is the func provisions violations of the antifraud tion of the courts determine to whether According occurred. to the has, given case, in a ex findings, sion’s misrepre- ceeded the bounds its remedial author- 17(a) Act, gives ap- Section of the Securities ciation unless the Commission 77q(a) ; 10(b) proval. proceeded § U.S.C. and 15 Sections (c) (1) Exchange Act, requisite of the 15 U.S.C. §§ der this Section and made the 78:(b) 78o(c) (1), finding and Rules 10b- cause because this action com- was thereunder, prior 15c-l C.E.R. 240.- §§ menced to the Securities Acts 10b-5 and 240.15cl-2. Amendments of under which the proceed directly can now 15A(b) (4) 2. Under Section of the Ex- impose a salesman and a sanction change Act, 78o-3(b) 15 U.S.C. § regardless any himon of whether sanction finding person that a is a cause of employer. operates on his See Section revocation order him from bar 15(b) (7) Exchange Act, associated with a broker dealer or U.S.C. belonging registered 78o(b) to a asso- § discharge quires ity. for the court In order the four month'bar an effec- us, This, before tive deterrent to future this matter violations. however, speculation necessary articulate that the Commission since the order proposed finding concerning sanction. for the reasons contains the need stated S.E.C. deterrence. As Justice Frankfurter We cannot determine Chenery Corp., 318 U.S. S. whether constitutes *3 a case abuse of L.Ed. 626 the discretion vested in the Com- Ct. grounds upon which the mission without of the rea- disclosure which agency imposition. not acted were son for its re- We therefore administrative mand the the Commission for clear: further not inconsistent with up- be action cannot opinion. findings might merely held because considerations So ordered. made and have been justify would disclosed which Judge (dissenting). safeguard as an There protected Act. interests clearly implied I think the Com- finding. responsible must be such order that mission’s * * * exer- cannot For the courts deter- as a they unless of review cise their by petitioner rent to future violations of the considerations are advised and others. The statute vests the Com- derlying under review. the action with broad in these mission discretion nothing gained by matters re- (2nd C., F.2d E. See Kahn v. S quiring spell out 1961); 297 F.2d E. Berko Cir. v. S. which is I direct enforce- obvious. 1961). (2nd Cir. ment of the Commission’s order. ignored this has to dis principle Its order fails here. why public necessitates interest

close from securities period at of four for a

business responsible perform despite his this time years the violation ance for since six supervised adequately America, trained UNITED STATES Appellee, prestigious brok securities saleman for a erage left house. Petitioner Common v. Corporation in 1961 wealth Securities Defendant, POWERS, John William August, em been Appellant. and since has ployed aas Corporation. re He First Columbus Court opportunity to obtain ade ceived this First Circuit. reputa quate to restore his 14, July 1969. delay year tion three because 10, by' Certiorari Nov. Denied proceeding occasioned Commission’s See 90 S.Ct. 256. pendency criminal action involv of a ing other defendants

(but re petitioner) also who were proceed

spondents in the administrative Armel,

ing. United States See denied, (6th 1967), cert. F.2d 51 Cir. 944, 19 L.Ed.2d 88 S.Ct.

U.S. course, may have

Of re- interest

concluded