Fed. Sec. L. Rep. P 95,022 Securities and Exchange Commission v. Jack W. Savage, and National Commodity Research & Statistical Service, Inc.

PER CURIAM. This appeal has been taken from an order of the district court that directed National Commodity Research and Statistical Service (hereinafter, “NAT-COM”) and its president, Jack Savage, to comply in all respects with a subpoena duces tecum issued by the Securities and Exchange Commission (hereinafter, “SEC”). The subpoena required Savage to appear personally and listed by category and called for the production of a great quantity of business records of NATCOM. The Securities Act and the Securities Exchange Act authorize administrative investigations of suspected violations, of those statutes. 15 U.S.C. § 77t(a) and § 78u(a) & (b). The latter section, paralleling the former, provides: “The Commission may, in its discretion, make such investigations as it deems necessary to *189 determine whether any person has violated or is about to violate any provision of this chapter or any rule or regulation thereunder . . .And, in so doing, “the Commission ... is empowered to subpena witnesses, compel their attendance, take evidence, and require the production of any . records which the Commission deems relevant or material to the inquiry”. In November, 1973, pursuant to the above cited statutory authority, SEC had undertaken a formal private investigation to determine whether NATCOM’s acts or practices in connection with “commodity futures contracts” that it offered or sold to its customers involved violations of the registration requirements and the anti-fraud provisions of the federal securities laws. The challenged subpoena issued in furtherance of. that investigation. From the beginning the essential contention of the appellants has been that SEC must establish its “jurisdiction” by showing that appellants’ commodity futures contracts are “securities” within the meaning of the Securities Act before they can be compelled to obey the subpoena. However, the very purpose of the present investigation is to examine the appellants’ course of business in detail and with particularity, a procedure which, in the above quoted language of the statute, “the Commission in its discretion . . . deems necessary” to determine whether the present law is applicable to and is being violated by appellants’ transactions. Thus, the appellants would require SEC to answer at the outset of its investigation the possibly doubtful questions of fact and law that the investigation is designed and authorized to illuminate. The courts should not frustrate the Commission’s performance of its legislatively assigned and specified responsibility by imposing any such requirement. In Oklahoma Press Publishing Co. v. Walling, 1946, 327 U.S. 186, 216, 66 S.Ct. 494, 509, 90 L.Ed. 614, an analogous situation led the Supreme Court to observe that the administrative agency’s “investigative function, in searching out violations with a view to securing enforcement of the Act, is essentially the same as the grand jury’s, or the court’s in issuing other pretrial orders for the discovery of evidence, and is governed by the same limitations”. Accordingly, the Court said that such an inquiry must not be “limited ... by ... forecasts of the probable result of the investigation”. To the same effect, see United States v. Powell, 1964, 379 U.S. 48, 57, 85 S.Ct. 248, 13 L.Ed.2d 112; United States v. Morton Salt Co., 338 U.S. 632, 642-43, 70 S.Ct. 357, 94 L.Ed. 401. In two recent cases the Court of Appeals for the Second Circuit has refused to impose upon SEC just such a burden in justification of an investigative subpoena as appellants would have us impose here. Securities and Exchange Commission v. Brigadoon Scotch Distributors, Ltd., 1973, 480 F.2d 1047, cert. denied 415 U.S. 915, 94 S.Ct. 1410, 39 L.Ed.2d 469; Securities and Exchange Commission v. Wall Street Transcript Corp., 1970, 422 F.2d 1371. In our view those cases were correctly decided. Separately, appellants complain that the subpoena’s demand for records is so comprehensive that it’s enforcement could seriously and unreasonably disrupt NATCOM’s business. Certainly a mass removal of business records currently in use could have that effect. However, counsel for SEC has assured this court that some records can adequately be examined without removal from NAT-COM’s place of business and that any removal of others will be organized and scheduled in cooperation with NATCOM to minimize disruption of business. We have no reason to doubt the good faith of those assurances. However, if particular demands for production or removal of records should threaten unwarranted disruption of NATCOM’s business, appellants shall be free to ask the district court for appropriate protective restrictions. Securities and Exchange *190 Commission v. Wall Street Transcript Corp., supra, at 1381. We find no merit in any other contention advanced by appellants but not discussed in this opinion. The judgment is affirmed. Affirmed.