SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
October 30, 1952
ACCOUNTING SERIES RELEASE NO. 73
Findings and Opinion of the Commission In the Matter of Haskins
& Sells and Andrew Stewart, file No. 4-66, (Rules of Practice—
Rule 1 1 ( e ) ).
PRACTICE AND PROCEDURE
Disqualification of Accountant from Practice Before Commission
Where repsondents, a firm of certified public accountants and a
partner therein, certified financial statements in a registration statement
found by the Commission to be materially inadequate and misleading
in that, among other findings, the financial statements grossly
overstated intangible assets as a result of the arbitrary use of the par
and stated value of shares of stock issued to acquire the assets, including
shares expected to be reacquired from promoters as a donation,
and attributed to apparently potentially productive items material
amounts which should have been shown as promotion services, held
respondents have engaged in improper professional conduct making
it appropriate to deny temporarily their privilege of appearing or
practicing before the Commission.
Manuel F. Cohen, for the Office of the Chief Accountant of the
Robert P. Patterson, Boyle, Feller, Stone & McGivern, and Saul
Levy, for respondents.
These private proceedings were instituted under Rule I I (e) of our
Rules of Practice to determine whether the privilege of appearing or
practicing before us should be denied, temporarily or permanently,
to Haskins & Sells, a firm of certified public accountants, and Andrew
Stewart, a member of that firm.1
Hearings were held, and after a recommended decision by the
hearing examiner was dispensed with upon respondents' motion, counsel
for the Office of the Chief Accountant of the Commission and
counsel for the respondents filed briefs and presented oral argument.
On the basis of our examination of the record we make the following
1 Rule II (e) reads as follows :
"The Commission may disqualify, and deny, temporarily or permanently, the privilege
of appearing or practicing before it in any way to any person who is found by the Commission
after hearing in the matter
"(1) not to possess the requisite qualifications to represent others ; or
"(2) to be lacking in character or integrity or to have engaged in unethical or improper