(dissenting) :
Plohn had a considerably stronger case against the appointment of a receiver than the majority opinion indicates. According to its counsel, after the firm discovered in May, 1970, that it was in violation of the net capital rule, NYSE Rule *380325, it took the initiative in bringing this to the attention of the New York Stock Exchange, presented a plan of orderly liquidation to the Exchange and the SEC, and has faithfully adhered to it. Its many branch sales offices were closed, all 130 registered representatives were discharged, and non-sales personnel were reduced from 150 to about 10. Most of the securities owned by the firm were sold, and the proceeds along with customers’ payments of debit balances were used to cut bank loans from $14,-000,000 in May to $275,000 on August 27. In addition, the family of a general partner contributed $1,000,000 in new capital. Furthermore the securities of the 32 customers now illegally hypothecated had not been originally so; the illegality arose from payment of debit balances and Plohn’s inability immediately to raise the $275,000 still owed. There was reason to think this problem would soon be solved by the sale of remaining securities or exchange seats, and Plohn asserts that none of the 32 customers had complained. With all this, there was a substantial question whether, despite Plohn’s admitted violations, the expenses and other attendant problems of a receivership were justified, especially in light of this court’s position that receivership is “an extraordinary remedy to be resorted to only where some injury to property can be avoided in no other way,” Chambers v. Blickle Ford Sales, Inc., 313 F.2d 252, 260 (2 Cir. 1963).
While this recital of what Plohn could have established is needed to place the problem in proper perspective, I do not dispute that an order appointing a receiver would have come within the wide discretion accorded a district judge if it had been made after a fair hearing and on due deliberation, requirements that are of peculiar importance precisely because of the wide discretion allowed him. Yet those elements were conspicuously lacking here.
The only issues properly before the district court on Thursday, August 27 were whether to enter a temporary restraining order and what date to set for the hearing of the SEC’s motions for a preliminary injunction and the appointment of a receiver. Yet, according to the uncontradicted affidavit of Plohn’s attorney, the judge said he had already “lined up a receiver” on the basis of a telephone call from the SEC and without awaiting counsel’s arrival, and after a perfunctory hearing, of which no transcript was made, announced he was appointing one then and there. Although he then acceded to the protest of Plohn’s counsel to the extent of setting a hearing for the next afternoon, that amount of time was totally inadequate in view of the lack of any emergency that required him to act on August 28 rather than let the matter go over for hearing in regular course on September 1 before another judge in the civil motion part. There was equally little justification for disregarding on August 28 the endorsement made by the clerk of this court in accordance with long standing practice now embodied in our Rule 27(a), on which counsel for Plohn had justifiably relied. The SEC made no showing that Plohn was going to divert assets over the weekend; its case rather was that the firm had put the securities of the 32 customers in places where no one save the banks could get at them. The majority recognizes that the receiver did nothing during the week-end, and there seems to have been nothing he could have done. It now appears that disposition of the exchange seats owned by members of the firm, one of the principal assets the receiver was to sell, can probably not be effected without lengthy litigation; while this may be an argument for a receivership, it indicates how little urgency there was about setting it in operation.
I fail to follow the logic that because Plohn was later able to obtain from judges of this court a temporary stay of action by the receiver, which was thereafter vacated, it suffered no prejudice from the denial of a proper hearing on the receiver’s appointment. The issue on which Plohn was entitled to be heard was whether under all the circumstances *381a receiver need be appointed or whether something less drastic would suffice. When the question of a stay came before Judge Feinberg, the issue was posed in the different terms of abuse of discretion, as it is before us. We should reverse this order not “merely in order to vindicate our power under Rule 27 (a)” but to show that in this circuit parties will not be divested of possession of their property even at the suit of the SEC, except in the direst emergency, without a full and fair opportunity to present their case. Cf. SEC v. Frank, 388 F.2d 486 (2 Cir. 1968).
The SEC’s argument that Plohn should have been prepared for a hearing on August 27 because the staff had informed counsel on August 19 that it was seeking the agency’s authority to institute this action leaves me exceedingly cold. If approval by the commissioners was only a rubber-stamp, as the argument seems to imply, that should scarcely have taken a week. While it would have been prudent for Plohn’s counsel to begin getting his ducks in order so as to be prepared if the agency decided to act, he was not obliged to be ready, before being served with any papers, the very moment when the SEC approved the recommendations of the staff. Also, if the appointment of a receiver for Plohn had so little urgency that the SEC could take a week to act on the staff recommendation, it did not have to be pushed through the district court on the same day that' the judge was first presented with an order to show cause, or even on the next day when Plohn’s counsel was absent in justifiable reliance on the endorsement of the clerk of this court.
Apart from these principles of fundamental fairness, such procedings as were taken here are counter-productive in accomplishing anything for the creditors. Counsel for the receiver has advised us of the receiver’s understandable reluctance to take important action while his status is under serious attack in this court. Hence instead of a delay of two business days there has been One of two months in the receiver’s getting started any meaningful way. To be sure there might have been an appeal even if proper procedures had been followed, but we would then have been able to deal with it summarily. in