408.201(1)(d)
(d) Becomes responsible for or in place of any other person described as an issuer in this section.
408.201(2)
(2) With respect to obligations on or defenses to a security, a guarantor is an issuer to the extent of his or her guaranty, whether or not his or her obligation is noted on a certificated security or on statements of uncertificated securities sent under
s. 408.408.
408.201(3)
(3) With respect to registration of transfer, pledge or release (
ss. 408.401 to
408.406), "issuer" means a person on whose behalf transfer books are maintained.
408.201 History
History: 1985 a. 237.
408.202
408.202
Issuer's responsibility and defenses; notice of defect or defense. 408.202(1)
(1) Even against a purchaser for value and without notice, the terms of a security include:
408.202(1)(a)
(a) If the security is certificated, those stated on the security;
408.202(1)(b)
(b) If the security is uncertificated, those contained in the initial transaction statement sent to the purchaser or, if his or her interest is transferred to him or her other than by registration of transfer, pledge or release, the initial transaction statement sent to the registered owner or registered pledgee; and
408.202(1)(c)
(c) Those made part of the security by reference, on the certificated security or in the initial transaction statement, to another instrument, indenture or document or to a constitution, statute, ordinance, rule, regulation, order or the like to the extent that the terms referred to do not conflict with the terms stated on the certificated security or contained in the statement. A reference under this paragraph does not of itself charge a purchaser for value with notice of a defect going to the validity of the security even though the certificated security or statement expressly states that a person accepting it admits notice.
408.202(2)
(2) A certificated security in the hands of a purchaser for value or an uncertificated security as to which an initial transaction statement has been sent to a purchaser for value, other than a security issued by a government or governmental agency or unit, even though issued with a defect going to its validity, is valid with respect to the purchaser if he or she is without notice of the particular defect unless the defect involves a violation of constitutional provisions, in which case the security is valid with respect to a subsequent purchaser for value and without notice of the defect. This subsection applies to an issuer that is a government or governmental agency or unit only if either there has been substantial compliance with the legal requirements governing the issue or the issuer has received a substantial consideration for the issue as a whole or for the particular security and a stated purpose of the issue is one for which the issuer has power to borrow money or issue the security.
408.202(3)
(3) Except as provided in the case of certain unauthorized signatures (
s. 408.205), lack of genuineness of a certificated security or an initial transaction statement is a complete defense, even against a purchaser for value and without notice.
408.202(4)
(4) All other defenses of the issuer of a certificated or uncertificated security, including nondelivery and conditional delivery of a certificated security, are ineffective against a purchaser for value who has taken without notice of the particular defense.
408.202(5)
(5) Nothing in this section shall be construed to affect the right of a party to a "when, as and if issued" or a "when distributed" contract to cancel the contract in the event of a material change in the character of the security that is the subject of the contract or in the plan or arrangement pursuant to which the security is to be issued or distributed.
408.202 History
History: 1985 a. 237.
408.202 Annotation
Guarantying municipal bonds. Minge, 1974 WLR 89.
408.203
408.203
Staleness as notice of defects or defenses. 408.203(1)(1) After an act or event creating a right to immediate performance of the principal obligation represented by a certificated security or that sets a date on or after which the security is to be presented or surrendered for redemption or exchange, a purchaser is charged with notice of any defect in its issue or defense of the issuer if:
408.203(1)(a)
(a) The act or event is one requiring the payment of money, the delivery of certificated securities, the registration of transfer of uncertificated securities or any of these on presentation or surrender of the certificated security, the funds or securities are available on the date set for payment or exchange and he or she takes the security more than one year after that date; and
408.203(1)(b)
(b) The act or event is not covered by
par. (a) and he or she takes the security more than 2 years after the date set for surrender or presentation or the date on which performance became due.
408.203(2)
(2) A call that has been revoked is not within
sub. (1).
408.203 History
History: 1985 a. 237.
408.204
408.204
Effect of issuer's restrictions on transfer. A restriction on transfer of a security imposed by the issuer, even though otherwise lawful, is ineffective against any person without actual knowledge of it unless:
408.204(1)
(1) The security is certificated and the restriction is noted conspicuously thereon; or
408.204(2)
(2) The security is uncertificated and a notation of the restriction is contained in the initial transaction statement sent to the person or, if his or her interest is transferred to him or her other than by registration of transfer, pledge or release, the initial transaction statement sent to the registered owner or the registered pledgee.
408.204 History
History: 1985 a. 237.
408.205
408.205
Effect of unauthorized signature on certificated security or initial transaction statement. An unauthorized signature placed on a certificated security prior to or in the course of issue or placed on an initial transaction statement is ineffective, but the signature is effective in favor of a purchaser for value of the certificated security or a purchaser for value of an uncertificated security to whom such initial transaction statement has been sent, if the purchaser is without notice of the lack of authority and the signing has been done by:
408.205(1)
(1) An authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security, of similar securities, or of initial transaction statements or the immediate preparation for signing or any of them; or
408.205(2)
(2) An employe of the issuer or of any of the foregoing entrusted with responsible handling of the security or initial transaction statement.
408.205 History
History: 1985 a. 237.
408.206
408.206
Completion or alteration of certificated security or initial transaction statement. 408.206(1)
(1) If a certificated security contains the signatures necessary to its issue or transfer but is incomplete in any other respect:
408.206(1)(a)
(a) Any person may complete it by filling in the blanks as authorized; and
408.206(1)(b)
(b) Even though the blanks are incorrectly filled in, the security as completed is enforceable by a purchaser who took it for value and without notice of the incorrectness.
408.206(2)
(2) A complete certificated security that has been improperly altered, even though fraudulently, remains enforceable but only according to its original terms.
408.206(3)
(3) If an initial transaction statement contains the signatures necessary to its validity, but is incomplete in any other respect:
408.206(3)(a)
(a) Any person may complete it by filling in the blanks as authorized; and
408.206(3)(b)
(b) Even though the blanks are incorrectly filled in, the statement as completed is effective in favor of the person to whom it is sent if he or she purchased the security referred to therein for value and without notice of the incorrectness.
408.206(4)
(4) A complete initial transaction statement that has been improperly altered, even though fraudulently, is effective in favor of a purchaser to whom it has been sent, but only according to its original terms.
408.206 History
History: 1985 a. 237.
408.207
408.207
Rights and duties of issuer with respect to registered owners and registered pledgees. 408.207(1)
(1) Prior to due presentment for registration of transfer of a certificated security in registered form, the issuer or indenture trustee may treat the registered owner as the person exclusively entitled to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner.
408.207(2)
(2) Subject to
subs. (3),
(4) and
(6), the issuer or indenture trustee may treat the registered owner of an uncertificated security as the person exclusively entitled to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner.
408.207(3)
(3) The registered owner of an uncertificated security that is subject to a registered pledge is not entitled to registration of transfer prior to the due presentment to the issuer of a release instruction. The exercise of conversion rights with respect to a convertible uncertificated security is a transfer within the meaning of this section.
408.207(4)
(4) Upon due presentment of a transfer instruction from the registered pledgee of an uncertificated security, the issuer shall:
408.207(4)(a)
(a) Register the transfer of the security to the new owner free of pledge, if the instruction specifies a new owner (who may be the registered pledgee) and does not specify a pledgee;
408.207(4)(b)
(b) Register the transfer of the security to the new owner subject to the interest of the existing pledgee, if the instruction specifies a new owner and the existing pledgee; or
408.207(4)(c)
(c) Register the release of the security from the existing pledge and register the pledge of the security to the other pledgee, if the instruction specifies the existing owner and another pledgee.
408.207(5)
(5) Continuity of perfection of a security interest is not broken by registration of transfer under
sub. (4) (b) or by registration of release and pledge under
sub. (4) (c), if the security interest is assigned.
408.207(6)
(6) If an uncertificated security is subject to a registered pledge:
408.207(6)(a)
(a) Any uncertificated securities issued in exchange for or distributed with respect to the pledged security shall be registered subject to the pledge;
408.207(6)(b)
(b) Any certificated securities issued in exchange for or distributed with respect to the pledge security shall be delivered to the registered pledgee; and
408.207(6)(c)
(c) Any money paid in exchange for or in redemption of part or all of the security shall be paid to the registered pledgee.
408.207(7)
(7) Nothing in this chapter shall be construed to affect the liability of the registered owner of a security for calls, assessments or the like.
408.207 History
History: 1985 a. 237.
408.207 Annotation
The issuer may continue to recognize the registered owner of a security, even after the security has been transferred, so long as the new owner has not made a due presentation for registration of transfer. Huffman v. Altec International, Inc. 200 W (2d) 78, 546 NW (2d) 162 (Ct. App. 1996).
408.207 Annotation
Owner of stock could not hold corporation liable for wrongfully redeeming stock that owner had left in possession and registered in name of owner's agent. Kerrigan v. American Orthodontics Corp.,
960 F. 2d 605 (1992).
408.208
408.208
Effect of signature of authenticating trustee, registrar or transfer agent. 408.208(1)
(1) A person placing his or her signature upon a certificated security or an initial transaction statement as authenticating trustee, registrar, transfer agent, or the like, warrants to a purchaser for value of the certificated security or a purchaser for value of an uncertificated security to whom the initial transaction statement has been sent, if the purchaser is without notice of the particular defect, that:
408.208(1)(a)
(a) The certificated security or initial transaction statement is genuine;
408.208(1)(b)
(b) His or her own participation in the issue or registration of the transfer, pledge or release of the security is within his or her capacity and within the scope of the authority received by him or her from the issuer; and
408.208(1)(c)
(c) He or she has reasonable grounds to believe that the security is in the form and within the amount the issuer is authorized to issue.
408.208(2)
(2) Unless otherwise agreed, a person by so placing his or her signature does not assume responsibility for the validity of the security in other respects.
408.208 History
History: 1985 a. 237;
1991 a. 316.
PURCHASE
408.301
408.301
Rights acquired by purchaser. 408.301(1)
(1) Upon transfer of a security to a purchaser (
s. 408.313) the purchaser acquires the rights in the security which his or her transferor had or had actual authority to convey unless the purchaser's rights are limited by
s. 408.302.
408.301(2)
(2) A transferee of a limited interest acquires rights only to the extent of the interest transferred. The creation or release of a security interest in a security is the transfer of a limited interest in that security.
408.301 History
History: 1985 a. 237.
408.302
408.302
"Bona fide purchaser"; "adverse claim"; title acquired by bona fide purchaser. 408.302(1)
(1) A "bona fide purchaser" is a purchaser for value in good faith and without notice of any adverse claim:
408.302(1)(a)
(a) Who takes delivery of a certificated security in bearer form or in registered form, issued or endorsed to him or her or in blank;
408.302(1)(b)
(b) To whom the transfer, pledge or release of an uncertificated security is registered on the books of the issuer; or
408.302(2)
(2) "Adverse claim" includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in the security.
408.302(3)
(3) A bona fide purchaser in addition to acquiring the rights of a purchaser (
s. 408.301) also acquires his or her interest in the security free of any adverse claim.
408.302(4)
(4) Notwithstanding
s. 408.301 (1), the transferee of a particular certificated security who has been a party to any fraud or illegality affecting the security, or who as a prior holder of that certificated security had notice of an adverse claim, cannot improve his or her position by taking from a bona fide purchaser.
408.302 History
History: 1985 a. 237.
408.303
408.303
"Broker". "Broker" means a person engaged for all or part of his or her time in the business of buying and selling securities, who in the transaction concerned acts for, buys a security from, or sells a security to, a customer. Nothing in this chapter determines the capacity in which a person acts for purposes of any other statute or rule to which the person is subject.
408.303 History
History: 1985 a. 237.
408.304
408.304
Notice to purchaser of adverse claims. 408.304(1)
(1) A purchaser, including a broker for the seller or buyer but excluding an intermediary bank, of a certificated security is charged with notice of adverse claims if:
408.304(1)(a)
(a) The security, whether in bearer or registered form, has been endorsed "for collection" or "for surrender" or for some other purpose not involving transfer; or
408.304(1)(b)
(b) The security is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor. The mere writing of a name on a security is not such a statement.
408.304(2)
(2) A purchaser, including a broker for the seller or buyer, but excluding an intermediary bank, to whom the transfer, pledge or release of an uncertificated security is registered is charged with notice of adverse claims as to which the issuer has a duty under
s. 408.403 (4) at the time of registration and which are noted in the initial transaction statement sent to the purchaser or, if his or her interest is transferred to him or her other than by registration of transfer, pledge or release, the initial transaction statement sent to the registered owner or the registered pledgee.
408.304(3)
(3) The fact that the purchaser, including a broker for the seller or buyer, of a certificated or uncertificated security has notice that the security is held for a 3rd person or is registered in the name of or endorsed by a fiduciary does not create a duty of inquiry into the rightfulness of the transfer or constitute constructive notice of adverse claims. However, if the purchaser, excluding an intermediary bank, has knowledge that the proceeds are being used or the transaction is for the individual benefit of the fiduciary or otherwise in breach of duty, the purchaser is charged with notice of adverse claims.
408.304 History
History: 1985 a. 237.
408.305
408.305
Staleness as notice of adverse claims. An act or event that creates a right to immediate performance of the principal obligation represented by a certificated security or sets a date on or after which a certificated security is to be presented or surrendered for redemption or exchange does not itself constitute any notice of adverse claims except in the case of a transfer:
408.305(1)
(1) After one year from any date for presentment or surrender for redemption or exchange; or
408.305(2)
(2) After 6 months from any date set for payment of money against presentation or surrender of the security if funds are available for payment on that date.
