AB150: Bill Text

AB150,2186,23 551.55 Unlawful representations. Neither the fact that a registration statement or an application for a license has been filed nor the fact that a security is effectively registered or a person is licensed constitutes a finding by the commissioner department that any document filed under this chapter is true, complete and not misleading. Neither any such fact nor the fact that an exemption or exception is available for a security or a transaction means that the commissioner department has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security or transaction. It is unlawful to make, or cause to be made, to any prospective purchaser, customer or client any representation inconsistent with the foregoing.

AB150, s. 6729 Section 6729. 551.56 (1) (intro.) of the statutes is amended to read:

AB150,2186,25 551.56 (1) (intro.) The commissioner department may:

AB150, s. 6730 Section 6730. 551.56 (1) (b) of the statutes is amended to read:

AB150,2187,4 551.56 (1) (b) Require or permit any person to file a statement in writing, under oath or otherwise as the commissioner department determines, as to all the facts and circumstances concerning the matter being investigated;

AB150, s. 6731 Section 6731. 551.56 (2) of the statutes is amended to read:

AB150,2187,13 551.56 (2) For the purpose of any investigation, hearing or proceeding under this chapter, the commissioner department or any officer designated by the commissioner department may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of any books, papers, correspondence, memoranda, agreements or other documents or records which the commissioner department deems relevant or material to the inquiry. Failure to obey a subpoena or give evidence may be dealt with in accordance with s. 885.12.

AB150, s. 6732 Section 6732. 551.56 (3) (a) of the statutes is amended to read:

AB150,2187,25 551.56 (3) (a) No person is excused from attending and testifying or from producing any document or record before the commissioner department, or in obedience to the subpoena of the commissioner department or any officer designated by the commissioner department, or in any proceeding instituted by the commissioner department, on the ground that the testimony or evidence required of the person may tend to incriminate him or her or subject the person to a penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of his or her testimony or evidence, after claiming his or her privilege against self-incrimination, except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.

AB150, s. 6733 Section 6733. 551.57 of the statutes is amended to read:

AB150,2188,13 551.57 Injunctions. Whenever it appears to the commissioner department that any person has engaged or is about to engage in any act or practice constituting a violation of this chapter or any rule or order hereunder, the commissioner department may bring an action in the name of the state in the circuit court of the appropriate county to enjoin the acts or practices and to enforce compliance with this chapter or any rule or order hereunder, or the commissioner department may refer the matter to the attorney general or the district attorney of the appropriate county. Upon a proper showing, the court may grant a permanent or temporary injunction or restraining order, or may appoint a receiver for the defendant or the defendant's assets, or may order rescission of any sales or purchases of securities determined to be unlawful under this chapter or any rule or order hereunder. The court may not require the commissioner department to post a bond.

AB150, s. 6734 Section 6734. 551.58 (2) of the statutes is amended to read:

AB150,2188,21 551.58 (2) The commissioner department may refer such evidence as is available concerning violations of this chapter or of any rule or order under this chapter to the attorney general or the district attorney of the appropriate county, who may, with or without any reference, institute the appropriate criminal proceedings under this chapter. If referred to a district attorney, the district attorney shall, within 90 days, file with the commissioner department a statement concerning any action taken or, if no action has been taken, the reasons therefor.

AB150, s. 6735 Section 6735. 551.59 (6) (a) of the statutes is amended to read:

AB150,2189,10 551.59 (6) (a) No purchaser may commence an action under this section if, before suit is commenced, the purchaser has received a written offer stating the respect in which liability under this section may have arisen and fairly advising the purchaser of his or her rights; offering to repurchase the security for cash payable on delivery of the security equal to the consideration paid, together with interest at the legal rate under s. 138.04 from the date of payment, less the amount of any income received thereon or, if the purchaser no longer owns the security, offering to pay the purchaser upon acceptance of the offer an amount in cash equal to the damages computed in accordance with sub. (1); and stating that the offer may be accepted by the purchaser at any time within a specified period of not less than 30 days after the date of receipt thereof or such shorter period as the commissioner department may by rule prescribe; and the purchaser has failed to accept such offer in writing within the specified period.

AB150, s. 6736 Section 6736. 551.59 (6) (c) of the statutes is amended to read:

AB150,2189,17 551.59 (6) (c) Offers shall be in the form and contain the information the commissioner department by rule prescribes. Every offer under this subsection shall be delivered to the offeree or sent by certified mail addressed to the offeree at the offeree's last-known address. If an offer is not performed in accordance with its terms, suit by the offeree under this section shall be permitted without regard to this subsection.

AB150, s. 6737 Section 6737. 551.60 (title) of the statutes is amended to read:

AB150,2189,19 551.60 (title) Miscellaneous powers of commissioner.

AB150, s. 6738 Section 6738. 551.60 (1) of the statutes is amended to read:

AB150,2189,25 551.60 (1) The commissioner department may by rule or order require any issuer of securities registered or exempted by order of the commissioner department under this chapter or predecessor laws to file with the commissioner department and distribute to its security holders in this state at least annually specified financial or other information concerning the issuer.

AB150, s. 6739 Section 6739. 551.60 (2) (a) of the statutes is amended to read:

AB150,2190,6 551.60 (2) (a) If the commissioner department has reason to believe that any offer or sale of an unregistered security is, has been or would be unfair, inequitable or fraudulent to offerees or purchasers, the commissioner department may by order summarily prohibit further offers or sales of such security in this state until it is registered under this chapter.

AB150, s. 6740 Section 6740. 551.60 (2) (b) of the statutes is amended to read:

AB150,2190,12 551.60 (2) (b) If the commissioner department has reason to believe that any security is being or has been offered or sold in this state by any unlicensed person in violation of this chapter or any rule or order hereunder, the commissioner department may by order summarily prohibit such person from further offers or sales of securities in this state until licensed under this chapter.

AB150, s. 6741 Section 6741. 551.60 (2) (c) of the statutes is amended to read:

AB150,2190,19 551.60 (2) (c) If the commissioner department has reason to believe that any unlicensed person is transacting or has transacted business in this state as an investment adviser in violation of this chapter or any rule or order promulgated under this chapter, the commissioner department may by order summarily prohibit such person from further engaging in such activity in this state until licensed under this chapter.

AB150, s. 6742 Section 6742. 551.60 (3) of the statutes is amended to read:

AB150,2191,11 551.60 (3) If the public interest and the protection of investors so require, the commissioner department may by order summarily suspend all trading in this state by broker-dealers and agents in any security for any period specified. No broker-dealer or agent may effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state in which trading is so suspended, except in performance of a contract previously entered into. At any time after the issuance of an order under this subsection, any interested person may in writing request that the suspension of trading be vacated. Upon the receipt of a written request, the matter shall be noticed for hearing and a hearing shall be held in the manner provided in s. 551.61 (2). After the hearing, the commissioner department may order the suspension to be continued until modified or vacated by further order upon a finding that trading in the security will be unfair or inequitable or will tend to work a fraud upon the purchasers or sellers of the security. Otherwise, the commissioner department shall vacate the suspension of trading and no further order may be entered under this subsection with respect to the same security in the absence of changed circumstances justifying an order.

AB150, s. 6743 Section 6743. 551.60 (4) of the statutes is amended to read:

AB150,2191,21 551.60 (4) Every corporation, partnership or association having its principal office in this state or whose securities have been registered under this chapter or predecessor laws shall, within 20 days after receipt of written request from the commissioner department made in connection with any investigation under s. 551.56 (1), furnish the commissioner department with a list of all or part of its security holders as the commissioner department requests, showing the amount of securities held by each security holder and the date of issuance of such securities and information reasonably related thereto, signed by the president, secretary or partner of the issuer or a person occupying a similar status or performing similar functions.

AB150, s. 6744 Section 6744. 551.60 (5) of the statutes is amended to read:

AB150,2191,24 551.60 (5) The commissioner department may take such action as is authorized under 7 USC 13a-2, as amended.

AB150, s. 6745 Section 6745. 551.605 (1) (a) (intro.) of the statutes is amended to read:

AB150,2192,5 551.605 (1) (a) (intro.) The commissioner department or any officer designated by the commissioner department may impose an administrative assessment in the amount provided in par. (b) on any person who is subject to an order that is issued under s. 551.24, 551.28, 551.34, 551.53, 551.60 or 551.63 (1) and (2) in any of the following circumstances:

AB150, s. 6746 Section 6746. 551.605 (1) (a) 1. of the statutes is amended to read:

AB150,2192,9 551.605 (1) (a) 1. Following a hearing under s. 551.61 if the notice delivered to all interested parties includes notice of the commissioner's department's authority to impose an administrative assessment under this subsection.

AB150, s. 6747 Section 6747. 551.605 (1) (c) of the statutes is amended to read:

AB150,2192,13 551.605 (1) (c) The commissioner department shall include any administrative assessment imposed under this subsection in the order issued under any of the sections referred to in par. (a) in the manner described in par. (a) 1. or 2.

AB150, s. 6748 Section 6748. 551.605 (1) (d) of the statutes is amended to read:

AB150,2192,18 551.605 (1) (d) Upon the request of the commissioner department of financial institutions, the department of justice may bring a civil action in the circuit court for Dane county to compel payment of any unpaid administrative assessment, unless payment of the administrative assessment is stayed under s. 227.54.

AB150, s. 6749 Section 6749. 551.605 (2) of the statutes is amended to read:

AB150,2193,3 551.605 (2) Investor education. All moneys collected from the administrative assessment under sub. (1) shall be credited to the appropriation under s. 20.185 (1) (h) 20.144 (1) (i). Subject to s. 20.185 (1) (h) 20.144 (1) (i), the commissioner department shall use moneys credited to that appropriation to provide information to residents of this state about investments in securities to help investors and potential investors evaluate their investment decisions, protect themselves from unfair, inequitable or fraudulent offerings, choose their broker-dealers, agents or investment advisers more carefully, be alert for false or misleading advertising or other harmful practices, and know their rights as investors.

AB150, s. 6750 Section 6750. 551.61 (1) of the statutes is amended to read:

AB150,2193,9 551.61 (1) No order, other than an order issued summarily subject to sub. (2), may be entered by the commissioner department under s. 551.24, 551.28, 551.34 or 551.53 (2) without appropriate prior notice to all interested parties, opportunity for a hearing and, except as provided by s. 551.34 (7), written findings of fact and conclusions of law.

AB150, s. 6751 Section 6751. 551.61 (2) of the statutes is amended to read:

AB150,2193,20 551.61 (2) Within 30 days after the commissioner department has issued an order summarily, an interested party may file a written request with the commissioner department for a hearing in respect to any matters determined by the order, except a party may file a request for a hearing regarding an order issued under s. 551.60 (3) at any time. Within 10 days after an interested person files a written request with the commissioner department for a hearing, the matter shall be noticed for hearing, and a hearing shall be held within 60 days after notice, unless extended by the commissioner department for good cause. During the pendency of any hearing requested under this subsection, the order issued summarily shall remain in effect unless vacated or modified by the commissioner department.

AB150, s. 6752 Section 6752. 551.61 (3) of the statutes is amended to read:

AB150,2194,2 551.61 (3) After a hearing, the commissioner department may issue a final order as appropriate. The final order may affirm, vacate or modify an order issued summarily in effect during the pendency of the hearing as appropriate, or may include such other sanctions as are provided for under s. 551.24, 551.28 or 551.34. An order issued summarily against a party becomes a final order if the party fails to request a hearing under sub. (2) or if the party defaults after requesting a hearing.

AB150, s. 6753 Section 6753. 551.61 (5) of the statutes is amended to read:

AB150,2194,7 551.61 (5) Orders of the commissioner department are subject to judicial review under ch. 227 but orders originally entered without a hearing may be reviewed only if the party seeking review has requested a hearing within the time provided by sub. (2).

AB150, s. 6754 Section 6754. 551.62 (1) of the statutes is amended to read:

AB150,2194,19 551.62 (1) No permanent or temporary injunction, stay, restraining order or other order shall issue in any proceeding under s. 551.56 or 551.61 suspending or staying any order of the commissioner department, except upon application to the circuit court of the appropriate county, notice of which shall be given to the commissioner department and other parties to the proceeding, and except after opportunity for hearing thereon. No permanent or temporary injunction, stay, restraining order or other order shall issue in any other proceeding or action, in any court, which shall have the effect of delaying or preventing any such order from becoming effective, unless the parties to the proceeding before the commissioner department are also parties to the court proceeding or action, and except after notice and opportunity for hearing thereon.

AB150, s. 6755 Section 6755. 551.62 (2) of the statutes is amended to read:

AB150,2195,7 551.62 (2) No permanent or temporary injunction, stay, restraining order or other order shall issue in any proceeding under s. 551.56 or 551.61 or in any other proceeding or action, in any court, suspending or staying any order of the commissioner department or having the effect of delaying or preventing any such order from becoming effective, unless an undertaking is entered into on the part of the petitioner or plaintiff, with a surety and in the sum the court or the presiding judge thereof directs or approves to the effect that the petitioner or plaintiff will pay all damages which any party sustains by the suspension or stay of the order or the delay or prevention of the order from becoming effective, and to such other effect as the court or judge directs, and no order or judgment in any proceeding or action shall be stayed on appeal therefrom unless a like undertaking is entered into by the petitioner or plaintiff in addition to the undertaking under s. 808.07.

AB150, s. 6756 Section 6756. 551.63 (1) of the statutes is amended to read:

AB150,2195,16 551.63 (1) The commissioner department may make, amend and rescind any rules, forms and orders that are necessary to carry out this chapter, including rules and forms governing registration statements, applications and reports, and defining any terms, whether or not used in this chapter, insofar as the definitions are not inconsistent with this chapter. For the purpose of rules and forms, the commissioner department may classify securities, persons and matters within the commissioner's department's jurisdiction, and prescribe different requirements for different classes. Rules shall be made and published in accordance with ch. 227.

AB150, s. 6757 Section 6757. 551.63 (2) of the statutes is amended to read:

AB150,2195,24 551.63 (2) No rule, form or order may be made, amended or rescinded unless the commissioner department finds that the action is necessary or appropriate in the public interest and for the protection of investors. In prescribing rules and forms the commissioner department may cooperate with the securities administrators of other states and the securities and exchange commission with a view to achieving maximum uniformity in the form and content of registration statements, applications and reports wherever practicable.

AB150, s. 6758 Section 6758. 551.63 (3) of the statutes is amended to read:

AB150,2196,7 551.63 (3) The commissioner department may by rule or order prescribe the form and content of financial statements required under this chapter, the circumstances under which consolidated financial statements shall be filed, and whether any required financial statements shall be certified by independent or certified public accountants. All financial statements shall be prepared in accordance with generally accepted accounting practices unless otherwise permitted by rule or order.

AB150, s. 6759 Section 6759. 551.63 (4) of the statutes is amended to read:

AB150,2196,12 551.63 (4) No provision of this chapter imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form or order of the commissioner department, notwithstanding that the rule, form or order may later be amended or rescinded or be determined to be invalid for any reason.

AB150, s. 6760 Section 6760. 551.64 (1) of the statutes is amended to read:

AB150,2196,16 551.64 (1) A document is filed when it is received by the commissioner department or, if authorized under s. 551.32 (1) (a), an organization designated by the commissioner department.

AB150, s. 6761 Section 6761. 551.64 (2) of the statutes is amended to read:

AB150,2196,22 551.64 (2) The commissioner department shall keep a register of all licenses and registration statements which are or have ever been effective under this chapter and predecessor laws and all denial, suspension or revocation orders which have been entered under this chapter and predecessor laws. The register shall be open for public inspection.

AB150, s. 6762 Section 6762. 551.64 (3) of the statutes is amended to read:

AB150,2197,3 551.64 (3) The information contained in or filed with any registration statement, application or report shall be made available to the public in accordance with rules adopted by the commissioner department.

AB150, s. 6763 Section 6763. 551.64 (4) of the statutes is amended to read:

AB150,2197,10 551.64 (4) The commissioner department upon request shall furnish to any person at a reasonable charge photostatic or other copies, certified under the commissioner's seal of office, by the department if certification is requested, of any entry in the register or any order or other document on file in the commissioner's office with the department. Any copy so certified is admissible in evidence under s. 889.18.

AB150, s. 6764 Section 6764. 551.64 (5) of the statutes is amended to read:

AB150,2197,13 551.64 (5) The commissioner department may honor requests from interested persons for interpretative opinions.

AB150, s. 6765 Section 6765. 551.65 (1) of the statutes is amended to read:

AB150,2198,9 551.65 (1) Every applicant for license or registration under this chapter and every issuer which proposes to offer a security in this state through any person acting as agent shall file with the commissioner department or, if applying for a license, with the organization designated by the commissioner department under s. 551.32 (1) (a), an irrevocable consent appointing the commissioner or the commissioner's successor in office department to be his or her attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against him or her or a successor, executor or administrator which arises under this chapter or any rule or order under this chapter after the consent has been filed, with the same validity as if served personally on the person filing the consent. The consent shall be in the form the commissioner department by rule prescribes. The consent need not be filed by a person who has filed a consent in connection with a previous registration or license which is then in effect. Service may be made by leaving a copy of the process in at the office of the commissioner department, but it is not effective unless the plaintiff, who may be the commissioner department in a suit, action or proceeding instituted by the commissioner department, promptly sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at the person's last address on file with the commissioner department, and the plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process, or within such time as the court allows.

AB150, s. 6766 Section 6766. 551.65 (2) of the statutes is amended to read:

AB150,2199,3 551.65 (2) When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this chapter or any rule or order under this chapter, and the person has not filed a consent to service of process under sub. (1) and personal jurisdiction over the person cannot otherwise be obtained in this state, that conduct shall be considered equivalent to the person's appointment of the commissioner department to be his or her attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against the person or the person's successor, executor or administrator which arises out of that conduct and which is brought under this chapter or any rule or order under this chapter, with the same validity as if served on him or her personally. Service may be made by leaving a copy of the process in at the office of the commissioner department, but it is not effective unless the plaintiff, who may be the commissioner department in a suit, action or proceeding instituted by the commissioner department, promptly sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at the person's last-known address or takes other steps which are reasonably calculated to give actual notice; and the plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process or within such time as the court allows.

AB150, s. 6767 Section 6767. 551.65 (3) of the statutes is amended to read:

AB150,2199,8 551.65 (3) When process is served under this section the court, or the commissioner department in a proceeding before the commissioner department, shall order such continuance as is necessary to afford the defendant or respondent reasonable opportunity to defend.

AB150, s. 6768 Section 6768. 552.01 (1) of the statutes is amended to read:

AB150,2199,11 552.01 (1) "Commissioner" " Department" means the commissioner of securities department of financial institutions.

AB150, s. 6769 Section 6769. 552.01 (2) of the statutes is amended to read:

AB150,2199,17 552.01 (2) "Equity security" means any shares of stock or similar securities, or any securities convertible into such securities, or carrying any warrant or right to subscribe to or purchase such securities, or any such warrant or right, or any other security which, for the protection of investors, is deemed an equity security pursuant to rule of the commissioner department.

AB150, s. 6770 Section 6770. 552.03 (1) (intro.) of the statutes is amended to read:

AB150,2199,25 552.03 (1) (intro.) Any person who, after acquiring directly or indirectly the beneficial ownership of any equity security of a target company, is directly or indirectly a beneficial owner of more than 5% of any class of the outstanding equity securities of the issuer shall, within 10 days after such acquisition, file with the commissioner department on a form prescribed by the commissioner department a statement containing the following information and such additional information as the commissioner department by rule prescribes:

AB150, s. 6771 Section 6771. 552.03 (3) of the statutes is amended to read:

AB150,2200,13 552.03 (3) Any person may file with the commissioner department, in lieu of the statement prescribed in sub. (1) and unless otherwise ordered by the commissioner department, a statement containing the person's name and address, the number of shares or units of any equity security of the target company which are beneficially owned directly or indirectly by the person and each of the person's associates, the date of their acquisition and such other information as the commissioner department may by rule prescribe, if the person certifies that such securities were acquired by the person in the ordinary course of the person's business and not for the purpose or having the effect of changing or influencing the control of the issuer nor in connection with or as a participant in any transaction having such purpose or effect, and that the person does not intend to make a take-over offer involving the target company.

AB150, s. 6772 Section 6772. 552.03 (4) of the statutes is amended to read:

AB150,2200,18 552.03 (4) If any material change occurs in the facts set forth in the statement, the person filing the statement shall, within 10 days thereafter, file with the commissioner department an amendment describing the change, in accordance with rules adopted by the commissioner department.