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.
408.305 History
History: 1985 a. 237.
408.306
408.306
Warranties on presentment and transfer of certificated securities; warranties of originators of instructions. 408.306(1)(1) A person who presents a certificated security for registration of transfer or for payment or exchange warrants to the issuer that he or she is entitled to the registration, payment or exchange. But, a purchaser for value and without notice of adverse claims who receives a new, reissued or reregistered certificated security on registration of transfer or receives an initial transaction statement confirming the registration of transfer of an equivalent uncertificated security to him or her warrants only that he or she has no knowledge of any unauthorized signature (
s. 408.311) in a necessary endorsement.
408.306(2)
(2) A person by transferring a certificated security to a purchaser for value warrants only that:
408.306(2)(b)
(b) The security is genuine and has not been materially altered; and
408.306(2)(c)
(c) He or she knows of no fact which might impair the validity of the security.
408.306(3)
(3) If a certificated security is delivered by an intermediary known to be entrusted with delivery of the security on behalf of another or with collection of a draft or other claim against delivery, the intermediary by delivery warrants only his or her own good faith and authority even though he or she has purchased or made advances against the claim to be collected against the delivery.
408.306(4)
(4) A pledgee or other holder for security who redelivers a certificated security received, or after payment and on order of the debtor delivers that security to a 3rd person, makes only the warranties of an intermediary under
sub. (3).
408.306(5)
(5) A person who originates an instruction warrants to the issuer that:
408.306(5)(a)
(a) He or she is an appropriate person to originate the instruction; and
408.306(5)(b)
(b) At the time the instruction is presented to the issuer he or she will be entitled to the registration of transfer, pledge or release.
408.306(6)
(6) A person who originates an instruction warrants to any person specially guaranteeing his or her signature (
s. 408.312 (3)) that:
408.306(6)(a)
(a) He or she is an appropriate person to originate the instruction; and
408.306(6)(b)
(b) At the time the instruction is presented to the issuer:
408.306(6)(b)1.
1. He or she will be entitled to the registration of transfer, pledge or release; and
408.306(6)(b)2.
2. The transfer, pledge or release requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction.
408.306(7)
(7) A person who originates an instruction warrants to a purchaser for value and to any person guaranteeing the instruction (
s. 408.312 (6)) that:
408.306(7)(a)
(a) He or she is an appropriate person to originate the instruction;
408.306(7)(b)
(b) The uncertificated security referred to therein is valid; and
408.306(7)(c)
(c) At the time the instruction is presented to the issuer:
408.306(7)(c)1.
1. The transferor will be entitled to the registration of transfer, pledge or release;
408.306(7)(c)2.
2. The transfer, pledge or release requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction; and
408.306(7)(c)3.
3. The requested transfer, pledge or release will be rightful.
408.306(8)
(8) If a secured party is the registered pledgee or the registered owner of an uncertificated security, a person who originates an instruction of release or transfer to the debtor or, after payment and on order of the debtor, a transfer instruction to a 3rd person, warrants to the debtor or the 3rd person only that he or she is an appropriate person to originate the instruction and at the time the instruction is presented to the issuer, the transferor will be entitled to the registration of release or transfer. If a transfer instruction to a 3rd person who is a purchaser for value is originated on order of the debtor, the debtor makes to the purchaser the warranties of
sub. (7) (b) and
(c) 2. and
3.
408.306(9)
(9) A person who transfers an uncertificated security to a purchaser for value and does not originate an instruction in connection with the transfer warrants only that:
408.306(9)(a)
(a) His or her transfer is effective and rightful; and
408.306(10)
(10) A broker gives to his or her customer and to the issuer and a purchaser the applicable warranties provided in this section and has the rights and privileges of a purchaser under this section. The warranties of and in favor of the broker acting as an agent are in addition to applicable warranties given by and in favor of his or her customer.
408.306 History
History: 1985 a. 237.
408.307
408.307
Effect of delivery without endorsement; right to compel endorsement. If a certificated security in registered form has been delivered to a purchaser without a necessary endorsement he or she may become a bona fide purchaser only as of the time the endorsement is supplied; but against the transferor, the transfer is complete upon delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied.
408.307 History
History: 1985 a. 237.
408.308
408.308
Endorsements; instructions. 408.308(1)
(1) An endorsement of a certificated security in registered form is made when an appropriate person signs on it or on a separate document an assignment or transfer of the security or a power to assign or transfer it or his or her signature is written without more upon the back of the security.
408.308(2)
(2) An endorsement may be in blank or special. An endorsement in blank includes an endorsement to bearer. A special endorsement specifies to whom the security is to be transferred, or who has power to transfer it. A holder may convert a blank endorsement into a special endorsement.
408.308(3)
(3) An endorsement purporting to be only of part of a certificated security representing units intended by the issuer to be separately transferable is effective to the extent of the endorsement.
408.308(4)
(4) An "instruction" is an order to the issuer of an uncertificated security requesting that the transfer, pledge or release from pledge of the uncertificated security specified therein be registered.
408.308(5)(a)(a) An instruction originated by an appropriate person is:
408.308(5)(a)2.
2. A communication to the issuer in any form agreed upon in a writing signed by the issuer and an appropriate person.
408.308(5)(b)
(b) If an instruction has been originated by an appropriate person but is incomplete in any other respect, any person may complete it as authorized and the issuer may rely on it as completed even though it has been completed incorrectly.
408.308(6)
(6) "An appropriate person" in
sub. (1) means the person specified by the certificated security or by special endorsement to be entitled to the security.
408.308(7)(a)
(a) For an instruction to transfer or pledge an uncertificated security which is then not subject to a registered pledge, the registered owner; or
408.308(7)(b)
(b) For an instruction to transfer or release an uncertificated security which is then subject to a registered pledge, the registered pledgee.
408.308(8)
(8) In addition to the persons designated in
subs. (6) and
(7), "an appropriate person" in
subs. (1) and
(5) includes:
408.308(8)(a)
(a) If the person designated is described as a fiduciary but is no longer serving in the described capacity, then either that person or his or her successor.
408.308(8)(b)
(b) If the persons designated are described as more than one person as fiduciaries and one or more are no longer serving in the described capacity, then the remaining fiduciary or fiduciaries, whether or not a successor has been appointed or qualified.
408.308(8)(c)
(c) If the person designated is an individual and is without capacity to act by virtue of death, incompetence, infancy or otherwise, then his or her executor, administrator, guardian or like fiduciary.
408.308(8)(d)
(d) If the persons designated are described as more than one person as tenants by the entirety or with right of survivorship and by reason of death all cannot sign, then the survivor or survivors.
408.308(8)(e)
(e) A person having power to sign under applicable law or controlling instrument.
408.308(8)(f)
(f) To the extent that the person designated or any of the foregoing persons may act through an agent, — his or her authorized agent.
408.308(9)
(9) Unless otherwise agreed, the endorser of a certificated security or the originator of an instruction by his or her origination by his or her endorsement assumes no obligation that the security will be honored by the issuer but only the obligations provided by
s. 408.306.
408.308(10)
(10) Whether the person signing is appropriate is determined as of the date of signing and an endorsement made by or an instruction originated by him or her does not become unauthorized for the purposes of this chapter by virtue of any subsequent change of circumstances.
