Legal Document

436 U.S. 103 98 Supreme Court Reporter 1702 56 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 148 SECURITIES AND EXCHANGE COMMISSION, Petitioner,v.Samuel or Haw. Hawai‘i KFH45 A2 SLOAN. Number 76-1607. Argued March 27-28, 1978. Decided May 15, Syllabus The Securities and Exchange Commission (Commission) has the authority under § 12(k) of Act 1934 (Act) "summarily to suspend trading in any security . for a period not exceeding ten days" if "in its opinion public interest protection investors so require." Acting pursuant predecessor, issued series summary 10-day orders continuously suspending common stock certain corporation over year. Respondent, who owned 13 shares had engaged substantial purchases short sales stock, filed petition Appeals review orders, contending, inter alia, that "tacking" suspension exceeded Commission's 12(k). Because shortly after suit was brought no order remained effect asserted it plans issue such foreseeable future, claimed case moot. court rejected claim upheld respondent's position on merits. In this Court, contends facts record are inadequate allow proper resolution mootness event consecutive orders. Held : 1. is moot, since "capable repetition, yet evading review," Southern Pacific Terminal company versus ICC, 219 498, 515, 31 279, 283, 55 L.Ed. 310. Effective judicial precluded during life because may last more than 20 days. view numerous violations ascribed involved, there reasonable probability will again be subjected sum ary orders; thus, "reasonable expectation same complaining party" action again. Cf. Weinstein Bradford, 423 147, 96 347, 46 350. Pp. 108-110. 2. does have 12(k), based upon single set circumstances, would beyond initial period, even though periodically redetermines required by "the interest" investors." 110-123. (a) language statute establishes as maximum time which can suspended circumstances. 111-112. (b) congressional recognition other sections long-term sanctions continuation restrictions must accompanied notice an opportunity hearing, absence provision extending suspensions taken clear indication extended authorized 112-114. (c) statutory pattern leaves little doubt designed empower prepare deploy remedies injunctive relief revocation registration, reissue absent discovery new manipulative scheme. 114-115. (d) Those unavailable claims, evidenced very case, where first actually sought injunction against involved principals second approved filing management. Moreover, necessary dissemination marketplace information about schemes, at liberty reveal end let make their own judgments. And mere broad power cannot persuade read broadly scheme reasonably permit. 115-117. (e) Though authorizes successive entitled deference, consideration overcome contrary indications itself, especially when administrative construction with contemporaneous well-reasoned explanation action. Adamo Wrecking States, 434 275, 287-288, 566, 574, 54 538 n. 5. 117-119. (f) There convincing Congress Act. 119-123. 547 Federal Reporter, 2nd 152, affirmed. Harvey L. Pitt, Washington, D. C., petitioner. Samuel Sloan, respondent, pro se. Mr. Justice REHNQUIST delivered Court. 1 Under 1934, ch. 404, 48 Statutes-at-Large 881, require."1 Canadian Javelin, Limited (CJL), Second Circuit held scope authority. 157-158 (1976). We granted certiorari consider important question, 901, 295, L Ed.2d 187 (1977), and, finding ourselves basic agreement Appeals, we affirm. hold periodic redetermination whether investors," empowered issue, period. 2 * On November 29, 1973, apparently CJL disseminated allegedly false misleading press releases concerning business activities, what become from date until January 26, 1975. App. 109. During respondent challenging variety grounds. October 1975, dismissed frivolous all except his allegation indefinite abuse agency's deprivation due process. It further concluded, however, light two events occurred prior argument, could address question time. significance resumption commencement still 15. This begun April fact Royal Mounted Police launched extensive investigation into alleged manipulation American Stock several exchanges. 11-12. 37 separate were issued, 2, 1976. thought before 15 these appeal "without prejudice repleading hearing SEC .," regulation, been offered oral argument. 527 11, 12 (1975), cert. denied, 426 935, 2649, 49 387 3 Thereafter immediately petitioned promised hearing. forthcoming, 23, 1976, effect, p esent 25(a)(1) Act, Code KF62 78y(a)(1) (1976 ed.), He argued, among things, rational basis they supported evidence event, specifically "for days."2 favor latter point. concluded despite moot " 'capable review.' F.2d, 158, quoting 310 (1911). 4 then decided statutes suspensions—§ predecessors—did curtail 157-158. certiorari, directing attention parties mootness, now turn. II 5 Respondent argues because, observed, review."3 Commission, hand, urge demonstrably but rather simply enough determination mootness. expectation" harmed 'the investing ha[ving] apprised relevant facts, concealment threatened disrupt market reason believe again.' Brief Petitioner Pet. Certiorari 7. 149, 348, 350 (1975). concedes, capacity diversified investor, might future some he owns. But provided data number type securities portfolio enable determine "reasonable" likelihood those orders.4 6 Contrary contention, think presently us falls squarely within general principle enunciated supra, clarified class "(1) challenged duration too fully litigated cessation expiration, (2) party again." 349 (emphasis added). That prong test satisfied dispute. A days, making effective impossible likewise part also met here. has, put mildly, history sailing close wind.5 Thus, protestations notwithstanding, expectation, meaning owns suffer injury suffered before. sufficient itself satisfy test. addition, securities, summarily suspended. As admits, only increase harm complaining. thus buttress our conclusion recurring party. III Atlantic 7 Turning merits, note discovering existence affecting 10 days then, improper activity unrelated scheme, ordered suspension.6 Instead lasting year revealing single, likely sizable, scheme.7 confronting whether, "necessity," statutorily circumstances threaten orderly market. must, opinion, answered negative. 8 most salient point leading statute. Section ." 78l (k) ed.) underscored phrase limitation order. So read, indefinitely without procedural safeguards long redetermined every investors. While perhaps reading statute, persuaded natural logical one. appears face just that—a 9 Apart find persuasive reasons adopt place, notice, heard, findings record, awesome potentially devastating impact issuer, shareholders, mandate Congress, found confer power. No less expected authorize extend, virtually limit, periods suspension. unmistakable Indeed, anything, section points opposite direction. Other reinforce area considered somewhat drastic properly used brief When explicitly longer term, temporary, measures person, company, security, invariably requires give sort heard. For example, 12(j) deems investors, registration months makes "on (j) Another empowers broker-dealer made hearing." 78o (b)(4) Still another allows pending final broker-dealer's should revoked, temporarily "after (b)(5) Former 15(b)(6), dealt broker-dealers, lends support notion matter meant take specified allowed postpone appropriate continue postponement matter.8 replaced 15(b)(6) underscores pattern. action—either granting instituting proceedings denied 45 (b)(1) ed.). explicit both past present, difficult silence authorization extension contends. plausible interpretation did intend extend length all, much repeatedly B 11 advances four arguments position, none persuasive. sense out is, discovers suspends surely 30 later eve expiration And, continues nothing schemes evaluating needs different it. argument unpersuasive, follow va ious premises. Even assuming learning threatens stability market, therefore necessarily do discovery. context pattern, viewed device emergency while prepares remedies, temporary restraining order, preliminary permanent injunction, security. render unnecessary greater lesser extent admittedly cumbersome given Closely related second—its furthers statute's remedial purposes. Here merely asserts "has purposes require particular maintain fair capital markets." 37. powers are, insufficient accomplish 14 reject showing ineffective. injunctions obtain obtained wrongdoers stopgap measure marketplace. insufficiencies reiteration familiar many Government agencies semblance adversary proceeding delay imposition result desirable. seems weighing burden imposed private parties, gathering evidence. belies cases. At exactly commenced civil principals, alleging antifraud provisions 1933, reporting various practices, including reports containing information. seeking management prohibit them engaging Acts. Id., 101. 16 overwhelming. enhance marketplace, indicate justified 17 assuming, totally satisfactory remedy—at least viewpoint—is available instance like remedy, inclined amounts ought panacea problem beset appear adopted early 1961 recognized law called gradually carrying predecessors areas using pendente lite keep disposition delisting proceedings. Loss, Regulation 854-855 (2d ed. 1961). 18 author questioned propriety manner, id., 854, questions arise clearly contemplated solution occur place. cure-all. provides powerful weapon dealing problems. limit precisely defined. judicially administratively doubtful need allows. If desirable, source Congress. FMC Seatrain Lines, Inc., 411 726, 744-745, 93 1773, 1784, 36 620 (1973). 19 next statute—that consistent longstanding, dating 1944. great deference. See National Assn. Dealers, 422 694, 719, 95 2427, 2442, 486 (1975); Saxbe Bustos, 419 65, 74, 272, 278, 42 231 (1974). undoubtedly true law, force itself. place apparent occasions addressed detail took said Term 287 5, 574 (1978): 21 "This lack specific Court's pronouncement Skidmore Swift & Co., 323 134, 140, 65 161, 164, 89 124 (1944), one factor giving weight ruling thoroughness evident consideration, validity reasoning, consistency earlier pronouncements, factors persuade, lacking control.' 22 To paraphrase speculate reaching did, issuance concomitant exegesis doing so, obviously lacks "power persuade" Ibid. Nor practice, well-explained one, relieve responsibility practice 23 "The agency charged administering deference courts, ordinarily affirmed 'reasonable law.' NLRB Hearst Publications, 322 111, 131, 64 851, 860, 88 1170; Unemployment Aragon, 329 143, 153-154, 67 245, 250, 251, 91 136. courts f nal authorities issues construction, FTC Colgate-Palmolive 380 374, 385, 85 1035, 1042, 904, 'are obliged stand aside rubber-stamp affirmance decisions deem inconsistent frustrate policy underlying statute.' Brown, 291, 980, 988, 839." Volkswagenwerk FMC, 390 261, 929, 1090 (1968). 24 case—the placed standing, Part III-A mandate. situation U.S., 745, S.Ct., 1785, said: 25 "But administration weight. proposition may, matter, conceded, although tempered caveat bootstrap jurisdiction violating mandate." 26 duty 27 Finally, correct. Not re-enacted disapproving participated drafting legislation occasion views known Committee hearings.9 Furthermore, indicated understood practice.10 Zuber Allen, 396 168, 192, 90 314, 327, 345 (1969); Correll, 389 299, 305-306, 445, 448-449, 537 (1967); Fribourg Navigation Commissioner Internal Revenue, 383 86 862, 868, 751 (1966). 28 course recognize illustrated cases relies, applicable 328, stated enabling "is input interpretational equation. Its carries administrators directly hearings." administrators, far advised, reference present drafted "enabling legislation" here question—the 1934. They subsequent 29 years later, focused Court.11 Although 1964, Report approve scarcely approval referred Zuber, supra. extremely hesitant presume awareness few isolated statements thousands pages legislative documents. Report, additional widespread awareness, invoke presumption this. invocation odds whole, terms untrammeled unreviewable vest regulatory agency. willing sure re-enactment tantamount amendment conceive plain differs significantly 304, 448, pains relying tax Revenue "to words chosen cut either direction, tend defeat Commissioner's Subsequent pronouncements cast value. consolidating former §§ 15(c)(5) 19(a)(4) see 1, enacted 12(j), twelve months, revoke finds, issuer failed comply chapter rules regulations thereunder." new, 78s(a)(2), exercise expanded include trading.12 "With change," Senate Banking, Housing Urban Affairs, use ten-day duration." S.Rep.No.94-75, 106 (1975) added); U.S.Code Cong. Admin.News Page 284. arguendo, 1963 attribute them, that, argues, cover quite range situations 1975 seriously undermining continued 32 sum, intended expect sweeping nature supports expectation. truly view, entire suggesting empowered, correct concluding exists. Accordingly, judgment 33 Affirmed. 34 BRENNAN, whom MARSHALL joins, concurring judgment. 35 N Dec. Immigration Nationality Decisions concur reasoning holding period," ante, 106, join omissions unfortunate dicta. how flagrantly abusive Security been. says, itself" "maximum circumstances." Ante, 112. predecessor statutes, 105 up years. Ltd., Amicus Curiae 1a. 13-year extreme replete better 184-211. agree prohibits practice. unclear, suspension, 1-year here, violates fundamentals process play individual suppose thing. (requiring statement suspended), discussed 121-122. SEC's implementation mocks care justified. shows, EC never reveals orders.1 sure, able through Freedom Information request, tendered heavily excised purports state Commissioners whose issue.2 Nonetheless, finally agreed Javelin state, verified (that oath ) why unrevealed conclusions wrong.3 obscurantism run riot. 38 today leave open tack meet emergent situation, look disfavor effort unless concurrently stating each Without reasons, fear reviewable, circuitous time-consuming path followed 39 reaffirmance increasingly scholastic approach interpreting federal statutes. 117-118. for, notes, whatever "inconsistent mandate," 118, 40 Worse, insistence credited, pay 'specific authorization' operate. 117, (1978). my Brother STEVENS noted dissent Adamo, 302, 577, Norwegian Nitrogen 288 294, 53 350, 77 796 (1933)—perhaps guide says word reduce value "persuasive effect" Instead, understand focuses "contemporaneous men setting machinery motion,"id., 315, 358, assumptions—perhaps unspoken Congress—brought solution. experience tells assumptions everyone often go obviousness negates out. 41 Therefore, dispute opinions scrupulous jot tittle unexplained actions—and certainly keeping norm encouraged—I dismiss, does, well-reasoned, unexplained, actions irrelevant BLACKMUN, 43 judgment, am nonexempt Congress' recognition, acceptance 119-120, nn. 10, 1964 amendments, blunts, me, original literal Banking Committee, "expected use" 12(j)'s amended suspension-of-registration duration," 122, demands circumspection wholly extinguished restrained presented, instance, unable adequately inform suspected remedy aid nonissuer violated registered, interim formal misconduct record. 44 Here, indulged "quite bare findings," borrow Professor Loss' phrase. Beyond opaque suggestion Release, 11,383, awaiting "dissemination authorities," shareholders hint nonnegotiable Until 22, Release 12,361, factual premises right comment useless. such, conclude limits discretion. Given year-long blockade reasoned supposed ex eeds intention. added Public Law 94-29 9, 118. pertinent part: "If require, (other exempted security) member national exchange, broker, dealer shall mails means instrumentality interstate commerce transaction in, induce purchase sale of, suspended." previously substantially identical current traded over-the-counter permitted 78 o (c)(5) 78s(a)(4). consolidated argued rights unconstitutional delegation issues. collateral legal consequences Sibron New York, 392 40, 57, 1889, 1899, 917 contention. mathematical know, addition records, publicly corporations shareholder. datum ascertained accuracy claims representations regarding stages litigation. Compare 153 Response 18. adds pr bability determined revealed securities—those listed York Exchange, example—are seldom Within five twice staff connection attached Division Enforcement indicates six exchanges "chronic violator." 20, 24, 28, 31. continuous [CJL] problems." 61. counsel represented three bases suspensions—alleged manipulation, change failure file reports. Tr. Oral Arg. 17-18. Neither type. Rather, series, predicated mainly major impropriety personnel, requ red protect interest. indicated, suspensions, implicitly discovered independent doubts "reasons" independently regularly "change management." steps down suspicious circumstance advanced suspension—the hardly justification More importantly, remains. Does "roll over" "required" investors? "Pending subsection exceed fifteen if, (which consist solely affidavits arguments), determination, Pending (b)(6). 1963, considering 15(c)(5), informed Subcommittee House Interstate Foreign Commerce One paragraph 30-page report reads follows: "Under 19(a)(4), when, reexamination necessary. serious step, exercised restraint proceeded diligence develop terminated soon possible. proposed 15(c)(5)." Hearings H.R. 6789, 6793, S. 1642 88th Cong., 1st Sess., (1963). Currency, reported amendments disapprove stated: consistently construed permitting determines committee accepts interpretation. recognizes ep prolonged impose considerable hardship stockholders. expects proceed possible." S.Rep.No.379, 66-67 purpose grant deal already consolidate formerly contained two. provision, revokes "[no] revoked preceding sentence." document "Notice Suspension Trading." Numerous copies included Appendix contains boilerplate explanation: "It appearing exchange otherwise investors; [therefore, suspended]." 13, 16, 19, 21, 25, 27, 30, 33, 36, 39, 41, 44, 47, 50, 53, 56, 59, 62, 67, 69, 71, 73, 76, 79, 82, 85, 88, 91, 94, 97, 100, 103, 106. sole exception monotonous lodged SEC. recounted allegations stock. 109-110. consists memoranda Commission. See, e. g., 12, 14, memorandum postdates 12. explaining assumes explain action, assumption apparent. recommendations portion excised, presumably (but required) Exemption EPA Mink, 410 89, 827, 836, 119 (1973), traditional memoranda. 19; 20a-21a.

Classification Label: 7