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(b) Motions to Commission. All motions and applications not required to be made to the hearing officer pursuant to Rule 11 shall be made to and ruled upon by the Commission.
(c) Filing of motions to Commission; briefs; stays. Motions or applications calling for determination by the Commission shall be filed with the Secretary or other duly authorized officer of the Commission in writing, provided that motions or applications calling for determination by the Commission but made in the course of a hearing may be filed, in writing with the hearing officer, who shall refer such motion or application to the Commission. Any such motion or application shall be accompanied by a written brief of the points and authorities relied upon in support of the same. Any party may file an answering brief within 5 days after service upon him of such motion or other application as provided in Rule 23 unless otherwise directed by the Commission. Motions and applications will be considered on the briefs filed following the time for filing the answering brief, unless otherwise directed by the Commission. No oral argument will be heard on such matters unless the Commission so directs. Unless otherwise ordered by the Commission or the hearing officer, the hearing shall continue pending the determination of the motion or application by the Commission. Where a stay of effectiveness of an order of the Commission is sought, application therefor shall be made prior to the filing of a petition to review or, in connection with a petition pursuant to Section 15 A (b) (4) of the Securities Exchange Act of 1934, at any time when a petition for review of the disqualifying order of the Commission is not pending.
(d) Motions to set aside defaults. In order to prevent injustice and on such conditions as may be appropriate, the hearing officer at any time prior to the filing of his initial decision or the Commission at any time, may for good cause, set aside a default under Rule 6(e) or Rule 7(e). Any motion to set aside a default shall be made within a reasonable time, and shall state the reasons for the failure to file or appear and specify the nature of the proposed defense in the proceedings. Rule 13. Extension of Time and Adjournments.
(a) Commission or hearing officer may extend, postpone or adjourn. Except as otherwise
provided by law, the Commission at any time, or the hearing officer at any time prior to the filing of his initial decision or, if no initial decision is to be filed, at any time prior to the closing of the record, for cause shown, may extend or shorten any time limits prescribed by these rules for filing any papers and may postpone or adjourn any hearing
(b) Limitation on extensions. In no event shall any extensions of time for filing papers granted by a hearing officer pursuant to this rule exceed a total of 30 days.
(c) Limitations on postponements and adjournments. A hearing before a hearing officer shall begin at the time and place ordered by the Commission, provided that, within the limits provided by statute, the hearing officer may for good cause postpone the commencement of the hearing for not more than 30 days or change the place of hearing. Any convened hearing may be adjourned to such time and place as may be ordered by the Commission or by the hearing officer. It is the policy of the Commission that such adjournments shall be for not more than 30 days and in no event shall a hearing officer order an adjournment for a period in excess of 45 days. Rule 14. Evidence.
(a) Presentation and admission of evidence. All witnesses at a hearing for the purpose of taking evidence shall testify under oath or affirmation, which shall be administered by the hearing officer. Every party shall have the right to present such oral or documentary evidence and to conduct such cross-examination as may be required for a full and true disclosure of the facts. The hearing officer shall receive relevant and material evidence, rule upon offers of proof and exclude all irrelevant, immaterial or unduly repetitious evidence.
(b) Subpoenas; motions to quash or modify; service.
(1) Issuance of subpoenas ad testificandum and subpoenas duces tecum. The hearing officer, or in the event he is unavailable, any member of the Commission, or any other officer designated by the Commission for the purpose, in connection with any hearing ordered by the Commission, shall issue subpoenas requiring the attendance and testimony of witnesses and subpoenas requiring the production of documentary or other tangible evidence at any designated place of hearing upon request therefor by any party; provided, however, that, where it appears to the person requested to issue the subpoena that the subpoena sought may be unreasonable, oppressive, excessive in scope, or unduly burdensome, he may in his discretion, as a condition precedent to the issuance of the subpoena, require the person seeking the subpoena to show the general relevance and reasonable scope of the testimony or other evidence sought. In the event the person requested to issue the subpoena shall after consideration of all the circumstances determine that the subpoena or any of its terms are unreasonable, oppressive, excessive in scope, or unduly burdensome, he may refuse to issue the subpoena, or issue it only upon such conditions as fairness requires. In making the foregoing determination, where he can do so without undue inconvenience to the participants in the proceeding, the person requested to issue the subpoena may inquire of the other participants whether they will concede the facts sought to be proved; but in this connection, except with permission of the person seeking the subpoena, he shall not disclose the identity of the person sought to be subpoenaed. A person whose request for a subpoena has been denied or modified may not request any other Commission official to issue the subpoena; but he may appeal to the Commission from the denial or modification.
(2) Motions to quash. Any person to whom a subpoena is directed may, prior to the time specified therein for compliance, but in no event more than 5 days after the date of service of such subpoena, apply to the hearing officer, or if he is unavailable, to the Commission, to quash or modify such subpoena, accompanying such application with a brief statement of the reasons therefor. The hearing officer or the Commission, as the case may be, may deny the application, or upon notice to the person upon whose request the subpoena was issued, and opportunity for reply, may, (i) deny the application, (ii) quash or modify the subpoena or (iii) condition denial of the application to quash or modify the subpoena upon just and reasonable conditions, including, in the case of a subpoena duces tecum, a requirement that the person in whose behalf the subpoena was issued shall advance the reasonable cost of transporting docu
mentary or other tangible evidence to the designated place of hearing.
(3) Service of subpoenas. Service of a subpoena upon a person named therein shall be made by delivering a copy of the subpoena to such person and by tendering the fees for 1 day's attendance and the mileage as specified by Rule 14(c). When the subpoena is issued at the instance of any officer or agency of the United States, fees and mileage need not be tendered at the time of service. Whenever service is to be made upon a person who is represented in the pending proceeding by an attorney, the service may be made upon the attorney. Delivery of a copy of a subpoena and tender of the fees to a natural person may be made by handing them to the person; or leaving them at his office with the person in charge thereof; or, if there is no one in charge, leaving them in a conspicuous place therein; or leaving them at his dwelling place or usual place of abode with some person of suitable age and discretion then residing therein; or mailing them by registered or certified mail to him at his last known address; or by any method whereby actual notice is given to him and the fees are made available prior to the return date. When the person to be served is not a natural person, delivery of a copy of the subpoena and tender of the fees may be effected by handing them to a registered agent for service, or to any officer, director, or agent in charge of any office of such person, or by mailing them by registered or certified mail to such representative at his last known address; or by any method whereby actual notice is given to such representative and the fees are made available prior to the return date. The provisions of Rule 14(b) (3) shall apply to investigations as well as hearings.
(c) Witness fees and mileage. Witnesses summoned before the Commission shall be paid the same fees and mileage that are paid to witnesses in the courts of the United States, and witnesses whose depositions are taken and the persons taking the same shall severally be entitled to the same fees as are paid for like services in the courts of the United States. Witness fees and mileage shall be paid by the party at whose instance the witnesses appear.
(d) Official notice. In any proceeding official notice may be taken of any material fact which might be judicially noticed by a district court of the United States, any matter in the public official records of the Commission, or any matter which is peculiarly within the knowledge of the Commission as an expert body. If official notice is requested or taken of a material fact not appearing in the evidence in the record, the parties, upon timely request, shall be afforded an opportunity to establish the contrary.
(Amended Rule 14(b)(2), eff. Apr. 1, 1966, Release 33-4827.) Rule 15. Depositions and Interrogatories.
(a) Applications and orders for depositions. Any party desiring to take a deposition shall make written application therefor, setting forth the reasons why such deposition should be taken, the name and residence of the witness, the matters concerning which it is expected to question the witness, and the time and place proposed for the taking of the deposition. If it appears that a prospective witness may be unable to attend or may be prevented from attending a hearing, that his testimony is material and that it is necessary to take his deposition in the interest of justice, the hearing officer or the Commission, as the case may be, may in his or its discretion, issue an order which will name the witness whose deposition is to be taken, state the scope of the testimony to be taken, and specify the time when, the place where, and the designated officer before whom the witness is to testify. Such order shall be served upon the parties by the Secretary, or other duly designated officer of the Commission, a reasonable time in advance of the time fixed for taking testimony.
(b) Testimony on depositions. Witnesses whose testimony is taken by deposition shall be sworn or shall affirm before any questions are put to them. Each question propounded shall be recorded and the answers shall be taken down in the words of the witness. Examination and cross-examination of deponents may proceed as permitted at the hearing.
(c) Objections to questions or evidence. Objections to questions or evidence shall be in short form, stating the grounds of objection relied upon, but no transcript filed by the officer shall include argument or debate. Objections to questions or
evidence shall be noted by the officer upon the deposition, but he shall not have power to decide on the competency or materiality or relevance of evidence. Failure to object to questions or evidence before the officer shall not be deemed a waiver unless the ground of the objection is one which might have been obviated or removed if presented at that time.
(d) Filing of depositions. The testimony shall be reduced to writing by the officer, or under his direction, after which the deposition shall be subscribed by the witness and certified in usual form by the officer. The original deposition and exhibits shall be forwarded under seal to the Secretary of the Commission with such number of copies as may be requested by the Secretary of the Commission. Upon receipt thereof the Secretary or other duly designated officer shall file the original in the proceeding and shall forward a copy to each party or his attorney of record.
(e) Form of depositions. Such depositions shall conform to the specifications of Rule 22(e), (f) and (g), but deficiencies of form shall not invalidate the deposition if properly executed.
(f) Depositions as part of the record. At a hearing, a part or all of a deposition, so far as otherwise admissible in the proceeding, may be used if it appears: (1) that the witness is dead; (2) that the witness is out of the United States, unless it appears that the absence of the witness was procured by the party offering the deposition; (3) that the witness is unable to attend or testify because of age, sickness, infirmity or imprisonment; (4) that the party offering the deposition has been unable to procure the attendance of the witness by subpoena; or (5) upon application and notice, that such exceptional circumstances exist as to make it desirable, in the interest of justice and with due regard to the importance of presenting the testimony of witnesses orally in open hearing, to allow the deposition to be used. If only part of a deposition is offered in evidence by a party, any other party may require him to introduce all of it which is relevant to the part introduced, and any party may introduce any other parts. Any part of a deposition not received in evidence at a hearing before the Commission or a hearing officer shall not constitute a part of the record in such proceeding, unless the parties so agree or the Commission so orders.
(g) Interrogatories. Depositions may also be taken and submitted on written interrogatories in substantially the same manner as depositions taken by oral examination upon application of any party as provided in paragraph (a) of this rule. The interrogatories shall be filed with the application in triplicate. Within ten (10) days after service, any party may file with the Secretary his objections, if any, to such interrogatories, and may file such cross-interrogatories as he desires to submit. Such objections and cross-interrogatories shall be filed in triplicate and all other parties shall have ten (10) days after service to file their objections, if any, to such interrogatories. Objections to interrogatories or cross-interrogatories shall be settled by the hearing officer. Objections to interrogatories shall be made before the order for taking the deposition issues and if not so made shall be deemed waived. When a deposition is taken upon written interrogatories and cross-interrogatories, no party shall be present or represented, and no person other than the witness, a stenographic reporter, and the officer shall be present at the examination of the witness, which fact shall be certified by the officer, who shall propound the interrogatories and cross-interrogatories to the witnees in their order. The testimony shall be reduced to writing by the officer or under his direction and shall be subscribed by the witnesses and certified in usual form by the officer.
(Amended paras. (a), (b), and (f) eff. Aug. 2, 1966, Release 33–4842.) Rule 16. Proposed Findings and Conclusion;
Initial Decision. (a) Content of initial decisions. An initial decision shall include: findings and conclusions, with the reasons or bases therefor, upon all the material issues of fact, law or discretion presented on the record; an appropriate order; a statement of the time within which a petition for review of the initial decision may be filed; a statement that pursuant to Rule 17(f) of these rules the initial decision shall become the final decision of the Commission as to each party unless he files a petition for review of the initial decision (pursuant to Rule 17(b) of these rules) or the Commission (pursuant to Rule 17(c) of these rules) determines on its own initiative to review the initial decision as to him; and a statement that if a party timely files a peti
tion for review or the Commission takes action to review as to a party, the initial decision shall not become final with respect to that party.
(Adopted para. (a), eff. Apr. 1, 1966, Release 334827.)
(b) When initial decision required. The hearing officer shall make an initial decision in any proceeding in which a hearing is required to be conducted in conformity with Section 7 of the Administrative Procedure Act, unless an initial decision is waived by all parties who appear at the hearing and the Commission does not subsequently order that an initial decision nevertheless be made by the hearing officer, and in any other proceeding in which the Commission directs him to make such a decision.
(d) Proposed findings and conclusions; briefs. In any proceeding involving a hearing or an opportunity for hearing, the parties may file in writing proposed findings and conclusions. Proposed findings of fact shall indicate the basis therefor by appropriate citations to the record. Briefs in support of such proposals may be filed therewith or as a part thereof, and any proposed finding or conclusion not briefed may be regarded as waived.
(e) Time for filing proposed findings and briefs prescribed by hearing officer. At the end of every hearing, the hearing officer shall, after consultation with the parties, prescribe the period within which such proposed findings and conclusions and supporting briefs are to be filed and shall direct such filings to be either simultaneous or successive, provided, however, that the period within which the first filing is to be made normally should be no more than 30 days, and shall not exceed 60 days, after the close of the hearing. If successive filings are directed the proposed findings and conclusions of the moving party shall be set forth in serially numbered paragraphs and any counter statement of proposed findings and conclusions must, in addition to any other matter, indicate as to which paragraphs of the moving party's proposals there is no dispute. Reply briefs may be filed by the moving party or, where simultaneous filings are directed, reply briefs may be filed by all parties, within the period prescribed therefor by the hearing officer.
(f) Service of record; preparation and filing of initial decision. In proceedings in which an initial decision by a hearing officer is to be made, the record in the proceeding shall, promptly after the time for the last filing of briefs in reply to proposed findings, be served by the Records Officer upon the hearing officer. The hearing officer shall file his initial decision with the Secretary within 30 days after such service. The Secretary shall promptly serve the initial decisions upon the parties and shall promptly publish notice of the filing thereof in the Securities and Exchange Commission News Digest; provided, however, in private proceedings, no such notice shall be published unless the Commission otherwise directs.
(g) Oral argument. At his discretion the hearing officer may hear oral argument by the parties any time before he files his initial decision with the Secretary.
(Amended para. (f), eff. Apr. 1, 1966, Release 33-4827.) Rule 17. Review by the Commission of Initial
Decisions by Hearing Officers. (a) Petition for review; when available. In any proceeding in which an initial decision is made by a hearing officer, any party to the proceeding, and any person who would have been entitled to judicial review of the final order entered in the proceeding if the Commission itself had made the initial decision, may file a petition for Commission review of the initial decision.
(b) Petition for review; procedure. Any person who seeks Commission review of an initial decision by a hearing officer shall, within 15 days after service of such initial decision, serve and file a petition for Commission review containing exceptions thereto indicating specifically the findings and conclusions as to which exceptions are taken together with supporting reasons for such exceptions. These reasons may be stated in summary form. Any objections to an initial decision not saved by written exception filed pursuant to this rule will be deemed to have been abandoned and may be disregarded.
(c) Review by the Commission on its own initiative. The Commission may on its own initiative order review of any initial decision by a hearing officer within 30 days after the initial decision has been served on all parties. When parties who do not intend to file a petition for
review desire this determination to be made in a shorter time, they may so advise the Commission in writing, stating that they waive their right to file a petition for review. Notice of any order of the Commission directing review on its own initiative shall be served on all parties by the Secretary.
(d) Review by the Commission pursuant to petition for review. After a petition for review has been filed the Commission may decline to review the initial decision except that it will order review where (1) the initial decision :
(i) suspends, denies or revokes a brokerdealer registration pursuant to Section 15(b) of the Securities Exchange Act of 1934; or
(ii) suspends, denies or withdraws any registration or suspends or expels a member of a national securities exchange pursuant to Section 19(a) of the Securities Exchange Act of 1934; or
(iii) suspends trading on an exchange pursuant to Section 19(a) of the Securities Ex
change Act of 1934; or (2) the petition for review makes reasonable showing that:
(i) a prejudicial procedural error was committed in the conduct of the proceeding; or (ii) the initial decision embodies
(A) a finding or conclusion of material fact which is clearly erroneous; or
(B) a legal conclusion which is erroneous; or
(C) an exercise of discretion or decision of law or policy which is important
and which the Commission should review. After ordering review the Commission may summarily affirm the initial decision except where the petition for review presents a matter within subparagraph (2) hereof.
(e) Time for filing briefs. (1) Unless the Commission has summarily affirmed the initial decision, the petitioner and any other person entitled to Commission review may serve and file briefs in support of the petition within 30 days after the Commission has ordered review pursuant to a petition for review. Other persons entitled to Commission review in the proceeding may serve and file reply briefs within 30 days after service of a brief in support of the petition. (2) When the Commission orders review on its own initiative