SECURITIES & EXCHANGE COMMISSION v. CHENERY CORPORATION ET AL., 332 U.S. 194

Summary

Respondent sought approval of an amendment to a reorganization plan to provide for issuance of new common stock of the reorganized company to be distributed to members of its management on the basis of the shares of the old preferred stock which they had acquired during the period of reorganization. Reviewing the transaction under the Public Utility Holding Company Act of 1935, 49 Stat. 803, petitioner Securities and Exchange Commission denied the application, finding that the proposed transaction was inconsistent with the standards of §§ 7 and 11 of the Act. The appellate court reversed petitioner's determination. The court reversed because petitioner's judgment was the type of judgment which it was best equipped to make and which justified the use of the administrative process. The court found that its scope of review of an administrative order wherein a new principle was announced and applied was no different from that which pertained to ordinary administrative action. The court ...