Los Angeles Trust Deed & Mortgage Exchange v. Securities & Exchange Commission

The Securities and Exchange Commission (sometimes hereinafter referred to as the SEC) filed a complaint for an injunction against three corporate defendants: Los Angeles Trust Deed & Mort *201 gage Exchange, Trust Deed & Mortgage Exchange, and Trust Deed & Mortgage Markets, to prevent the sale of certain alleged securities.

An answer was filed generally denying all allegations in the original complaint.

Pursuant to order of court duly obtained, the plaintiff filed on October 8, 1958, an Amended and Supplemental Complaint.

Count I was the same in the Amended Complaint as in the original. Count II added the following material facts as having not been stated by defendants to their customers: (e) “the losses sustained by investors”; (f) the sources of the funds used to inventory or “warehouse” notes secured by deeds of trust; (g) the financial condition of the corporate defendants; (h) the fact that this action had been brought by the SEC; (k) the background, integrity, and qualifications of the officers and personnel of the corporate defendants.

Counts III and IV in the Amended Complaint were enlarged by reference to and inclusion of enlarged Count II, and Count V remained the…