Electronic Systems Investment Corporation, Petitioner, v. Small Business Administration, Respondent, 405 F.2d 188 (4th Cir. 1968)

Under the Small Business Investment Act of 1958, as amended, 15 U.S.C. §§ 661 et seq. 687a(c), the Administration issued an order on September 21, 1966 requiring Electronic Systems Investment Corporation, chartered in Maryland, to show cause why its license as a small business investment company under the Act should not be suspended for, and the corporation directed to cease and desist from, violating the Act, 15 U.S.C. § 686, and the Administration's regulations, 13 CFR 107.708, 107.716. The breaches laid to Electronic were infractions (1) of those provisions of the Act and the regulations prohibiting, without prior written approval of the Administration, the providing by the investment company of an aggregate of more than 20% of its paid-in capital and surplus, to a single business concern; and (2) infraction of the regulation prohibiting, without such approval, the financing by an investment company of another company which has a common director with the investment company.

After a hearing, the charges were ultimately upheld by the Administration. An order was entered on February 5, 1968 by the Administration directing the investment company to cease and desist from further violation of the Act and the regulations, directing it to divest itself of the alleged illegal financings and suspending its license pending obedience to the order.

This appeal is now taken by Electronic attacking the Administration's order as unwarranted by the evidence and under the law. 15 U.S.C. § 687a(e). On review of the record we cannot say the directive is without substantial proof or is contrary to law. Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 71 S. Ct. 456, 95 L. Ed. 456 (1951). Accordingly, we deny the petition of Electronic to set aside the Administration's rulings.

Petition denied.