Facts of the Case
This case is here for the second time. In SEC v. Chenery Corp., 318 U. S. 80 , we held that an order of the Securities and Exchange Commission could not be sustained on the grounds upon which that agency acted. We therefore directed that the case be remanded to the Commission for such further proceedings as might be appropriate. On remand, the Commission reexamined the problem, recast its rationale, and reached the same result. The issue now is whether the Commission's action is proper in light of the principles established in our prior decision.
Conclusions
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1. In approving a plan for the reorganization of a holding company under the Public Utility Holding Company Act of 1935, the Securities and Exchange Commission required that preferred stock purchased by the management without fraud or concealment while plans of reorganization were before the Commission should not be converted into stock of the reorganized company, like other preferred stock, but should be surrendered at cost plus interest. In SEC v. Chenery Corp., 318 U. S. 80 , this Court held that this requirement could not be sustained on the sole ground upon which it was based by the Commission -- i.e., principles of equity judicially established. On remand, the Commission reexamined the problem and reached the same result, but based this requirement on the ground that to permit the management to profit from purchases of stock made while reorganization proceedings were pending would be inconsistent with the standards of §§ 7 and 11 of the Act. Held: the new order is sustained. Pp. 332 U. S. 196 -199, 332 U. S. 209 . 2. This Court's earlier decision held only that the requirement could not be supported on the sole ground stated by the Commission in its first order, and, on remand for such further proceedings as might be appropriate, the Commission was not precluded in the performance of its administrative function from reaching the same result on proper and relevant grounds. Pp. 332 U. S. 200 -201.
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