408.312(4)
(4) The guarantor under
subs. (1) and
(2) or the special guarantor under
sub. (3) does not otherwise warrant the rightfulness of the particular transfer, pledge or release.
408.312(5)
(5) Any person guaranteeing an endorsement of a certificated security makes not only the warranties of a signature guarantor under
sub. (1) but also the rightfulness of the particular transfer in all respects.
408.312(6)
(6) Any person guaranteeing an instruction requesting the transfer, pledge or release of an uncertificated security makes not only the warranties of a special signature guarantor under
sub. (3) but also warrants the rightfulness of the particular transfer, pledge or release in all respects.
408.312(7)
(7) No issuer may require a special guarantee of signature (
sub. (3)), a guarantee of endorsement (
sub. (5)), or a guarantee of instruction (
sub. (6)) as a condition to registration of transfer, pledge or release.
408.312(8)
(8) The foregoing warranties are made to any person taking or dealing with the security in reliance on the guarantee and the guarantor is liable to the person for any loss resulting from breach of the warranties.
408.312 History
History: 1985 a. 237.
408.313
408.313
When transfer to purchaser occurs; financial intermediary as bona fide purchaser; "financial intermediary". 408.313(1)(1) Transfer of a security or a limited interest, including a security interest, therein to a purchaser occurs:
408.313(1)(a)
(a) At the time he or she or a person designated by him or her acquires possession of a certificated security;
408.313(1)(b)
(b) At the time the transfer, pledge or release of an uncertificated security is registered to him or her or a person designated by him or her;
408.313(1)(c)
(c) At the time his or her financial intermediary acquires possession of a certificated security specially endorsed to or issued in the name of the purchaser;
408.313(1)(d)
(d) At the time a financial intermediary, not a clearinghouse, sends him or her confirmation of the purchase and also by book entry or otherwise identifies as belonging to the purchaser:
408.313(1)(d)1.
1. A specific certificated security in the financial intermediary's possession;
408.313(1)(d)2.
2. A quantity of securities that constitute or are part of fungible bulk of certificated securities in the financial intermediary's possession or of uncertificated securities registered in the name of the financial intermediary; or
408.313(1)(d)3.
3. A quantity of securities that constitute or are part of a fungible bulk of securities shown on the account of the financial intermediary on the books of another financial intermediary;
408.313(1)(e)
(e) With respect to an identified certificated security to be delivered while still in the possession of a 3rd person not a financial intermediary at the time that person acknowledges that he or she holds for the purchaser; or
408.313(1)(f)
(f) With respect to a specific uncertificated security the pledge or transfer of which has been registered to a 3rd person, not a financial intermediary, at the time that person acknowledges that he or she holds for the purchaser;
408.313(1)(g)
(g) At the time appropriate entries to the account of the purchaser or a person designated by him or her on the books of a clearing corporation are made under
s. 408.320;
408.313(1)(h)
(h) With respect to the transfer of a security interest where the debtor has signed a security agreement containing a description of the security, at the time a written notification, which, in the case of the creation of the security interest, is signed by the debtor (which may be a copy of the security agreement) or which, in the case of the release or assignment of the security interest created under this paragraph, is signed by the secured party, is received by:
408.313(1)(h)1.
1. A financial intermediary on whose books the interest of the transferor in the security appears;
408.313(1)(h)2.
2. A 3rd person, not a financial intermediary, in possession of the security, if it is certificated;
408.313(1)(h)3.
3. A 3rd person, not a financial intermediary, who is the registered owner of the security, if it is uncertificated and not subject to a registered pledge; or
408.313(1)(h)4.
4. A 3rd person, not a financial intermediary, who is the registered pledgee of the security, if it is uncertificated and subject to a registered pledge;
408.313(1)(i)
(i) With respect to the transfer of a security interest where the transferor has signed a security agreement containing a description of the security, at the time new value is given by the secured party; or
408.313(1)(j)
(j) With respect to the transfer of a security interest where the secured party is a financial intermediary and the security has already been transferred to the financial intermediary under
par. (a),
(b),
(c),
(d) or
(g), at the time the transferor has signed a security agreement containing a description of the security and value is given by the secured party.
408.313(2)
(2) The purchaser is the owner of a security held by a financial intermediary, but cannot be a bona fide purchaser of a security so held except in the circumstances specified in
sub. (1) (c),
(d) 1. and
(g). If a security so held is part of a fungible bulk, as in the circumstances specified in
sub. (1) (d) 2. and
3., the purchaser is the owner of a proportionate property interest in the fungible bulk.
408.313(3)
(3) Notice of an adverse claim received by the financial intermediary or by the purchaser after the financial intermediary takes delivery of a certificated security as a holder for value or after the transfer, pledge or release of an uncertificated security has been registered free of the claim to a financial intermediary who has given value is not effective either as to the financial intermediary or as to the purchaser. However, as between the financial intermediary and the purchaser the purchaser may demand transfer of an equivalent security as to which no notice of adverse claim has been received.
408.313(4)
(4) A "financial intermediary" is a bank, broker, clearing corporation or other person, or the nominee of any of them, which in the ordinary course of its business maintains security accounts for its customers and is acting in that capacity. A financial intermediary may have a security interest in securities held in account for its customer.
408.313 History
History: 1985 a. 237,
332;
1991 a. 304 s.
51.
408.314
408.314
Duty to transfer, when completed. 408.314(1)
(1) Unless otherwise agreed if a sale of security is made on an exchange or otherwise through brokers:
408.314(1)(a)
(a) The selling customer fulfills his or her duty to transfer at the time he or she:
408.314(1)(a)1.
1. Places a certificated security in the possession of the selling broker or of a person designated by the broker;
408.314(1)(a)2.
2. Causes an uncertificated security to be registered in the name of the selling broker or a person designated by the broker;
408.314(1)(a)3.
3. If requested, causes an acknowledgment to be made to the selling broker that a certificated or uncertificated security is held for the broker; or
408.314(1)(a)4.
4. Places in the possession of the selling broker or of a person designated by the broker a transfer instruction for an uncertificated security, providing the issuer does not refuse to register the requested transfer if the instruction is presented to the issuer for registration within 30 days thereafter; and
408.314(1)(b)
(b) The selling broker, including a correspondent broker acting for a selling customer, fulfills his or her duty to transfer at the time he or she:
408.314(1)(b)1.
1. Places a certificated security in the possession of the buying broker or a person designated by the buying broker;
408.314(1)(b)2.
2. Causes an uncertificated security to be registered in the name of the buying broker or a person designated by the buying broker;
408.314(1)(b)3.
3. Places in the possession of the buying broker or of a person designated by the buying broker a transfer instruction for an uncertificated security, providing the issuer does not refuse to register the requested transfer if the instruction is presented to the issuer for registration within 30 days thereafter; or
408.314(1)(b)4.
4. Effects clearance of the sale in accordance with the rules of the exchange on which the transaction took place.
408.314(2)
(2) Except as provided in this section and unless otherwise agreed, a transferor's duty to transfer a security under a contract of purchase is not fulfilled until he or she:
408.314(2)(a)
(a) Places a certificated security in form to be negotiated by the purchaser in the possession of the purchaser or of a person designated by the purchaser;
408.314(2)(b)
(b) Causes an uncertificated security to be registered in the name of the purchaser or a person designated by the purchaser; or
408.314(2)(c)
(c) If the purchaser requests, causes an acknowledgment to be made to the purchaser that a certificated or uncertificated security is held for the purchaser.
408.314(3)
(3) Unless made on an exchange a sale to a broker purchasing for his or her own account is within
sub. (2) and not within
sub. (1).
408.314 History
History: 1985 a. 237.
408.314 Annotation
Existence of unendorsed, hence non-negotiable, securities in corporate book held by corporate attorney did not comply with (2). Wolf v. Sachse, 75 W (2d) 147, 248 NW (2d) 407.
408.315
408.315
Action against transferee based upon wrongful transfer. 408.315(1)(1) Any person against whom the transfer of a security is wrongful for any reason, including his or her incapacity, as against anyone except a bona fide purchaser, may:
408.315(1)(a)
(a) Reclaim possession of the certificated security wrongfully transferred;
408.315(1)(b)
(b) Obtain possession of any new certificated security constituting all or part of the same rights;
408.315(1)(c)
(c) Compel the origination of an instruction to transfer to him or her or a person designated by him or her an uncertificated security constituting all or part of the same rights; or
408.315(2)
(2) If the transfer is wrongful because of an unauthorized endorsement of a certificated security, the owner may also reclaim or obtain possession of the security or a new certificated security even from a bona fide purchaser if the ineffectiveness of the purported endorsement can be asserted against him or her under
s. 408.311.
408.315(3)
(3) The right to obtain or reclaim possession of a certificated security or to compel the origination of a transfer instruction may be specifically enforced and the transfer of a certificated or uncertificated security enjoined and a certificated security impounded pending the litigation.
408.315 History
History: 1985 a. 237.
408.316
408.316
Purchaser's right to requisites for registration of transfer, pledge or release on books. Unless otherwise agreed, the transferor of a certificated security or the transferor, pledgor or pledgee of an uncertificated security on due demand must supply his or her purchaser with any proof of his or her authority to transfer pledge or release or with any other requisite necessary to obtain registration of the transfer, pledge or release of the security; but if the transfer, pledge or release is not for value a transferor need not do so unless the purchaser furnishes the necessary expenses. Failure within a reasonable time to comply with a demand made gives the purchaser the right to reject or rescind the transfer, pledge or release.
408.316 History
History: 1985 a. 237.
408.317(1)(1) Subject to
subs. (3) and
(4), no attachment or levy upon a certificated security or any share or other interest represented thereby which is outstanding is valid until the security is actually seized by the officer making the attachment or levy but a certificated security which has been surrendered to the issuer may be reached by a creditor by legal process at the issuer's chief executive office in the United States.
408.317(2)
(2) An uncertificated security registered in the name of the debtor may not be reached by a creditor except by legal process at the issuer's chief executive office in the United States.
408.317(3)
(3) The interest of a debtor in a certificated security that is in the possession of a secured party not a financial intermediary or in an uncertificated security registered in the name of a secured party not a financial intermediary, or in the name of a nominee of the secured party, may be reached by a creditor by legal process upon the secured party.
408.317(4)
(4) The interest of a debtor in a certificated security that is in the possession of or registered in the name of a financial intermediary or in an uncertificated security registered in the name of a financial intermediary may be reached by a creditor by legal process upon the financial intermediary on whose books the interest of the debtor appears.
408.317(5)
(5) Unless otherwise provided by law, a creditor's lien upon the interest of a debtor in a security obtained under
sub. (3) or
(4) is not a restraint on the transfer of the security, free of the lien, to a 3rd party for new value; but in the event of a transfer, the lien applies to the proceeds of the transfer in the hands of the secured party or financial intermediary, subject to any claims having priority.
408.317(6)
(6) A creditor whose debtor is the owner of a security is entitled to aid from courts of appropriate jurisdiction, by injunction or otherwise, in reaching the security or in satisfying the claim by means allowed at law or in equity in regard to property that cannot readily be reached by ordinary legal process.
408.317 History
History: 1985 a. 237.
408.318
408.318
No conversion by good faith conduct. An agent or bailee who in good faith, including observance of reasonable commercial standards if he or she is in the business of buying, selling or otherwise dealing with securities, has received certificated securities and sold, pledged or delivered them or has sold or caused the transfer or pledge of uncertificated securities over which he or she had control according to the instructions of his or her principal is not liable for conversion or for participation in breach of fiduciary duty although the principal has no right so to deal with the securities.
408.318 History
History: 1985 a. 237.
408.319
408.319
Statute of frauds. A contract for the sale of securities is not enforceable by way of action or defense unless:
408.319(1)
(1) There is some writing signed by the party against whom enforcement is sought or by his or her authorized agent or broker sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price;
408.319(2)
(2) Delivery of a certificated security or transfer instruction has been accepted or transfer of an uncertificated security has been registered and the transferee has failed to send written objection to the issuer within 10 days after receipt of the initial transaction statement confirming the registration, or payment has been made but the contract is enforceable under this provision only to the extent of the delivery, registration or payment;
408.319(3)
(3) Within a reasonable time a writing in confirmation of the sale or purchase and sufficient against the sender under
sub. (1) has been received by the party against whom enforcement is sought and that party has failed to send written objection to its contents within 10 days after its receipt; or
408.319(4)
(4) The party against whom enforcement is sought admits in his or her pleading, testimony or otherwise in court that a contract was made for sale of a stated quantity of described securities at a defined or stated price.
408.319 History
History: 1985 a. 237;
1991 a. 316.
408.319 Annotation
When one party delivers stock and receives a check in exchange the requirements of (2) are met even though payment of the check is stopped. Bigley v. Brandau, 57 W (2d) 198, 203 NW (2d) 735.
408.319 Annotation
Oral promise that oral contract to sell securities would be binding without compliance with statute of frauds did not estop promisor from invoking statute. Wamser v. Bamberger, 101 W (2d) 637, 305 NW (2d) 158 (Ct. App. 1981).
408.319 Annotation
Statements of defendant did not satisfy requirements of (4). Gruen Industries, Inc. v. Biller, 608 F (2d) 274 (1979).
408.320
408.320
Transfer or pledge within central depository system. 408.320(1)(1) In addition to other methods, a transfer, pledge or release of a security or any interest therein may be effected by the making of appropriate entries on the books of a clearing corporation reducing the account of the transferor, pledgor or pledgee and increasing the account of the transferee, pledgee or pledgor by the amount of the obligation, or the number of shares or rights transferred, pledged or released, if the security is shown on the account of a transferor, pledgor or pledgee on the books of the clearing corporation; is subject to the control of the clearing corporation; and:
408.320(1)(a)1.
1. Is in the custody of the clearing corporation, another clearing corporation, a custodian bank or a nominee of any of them; and
408.320(1)(a)2.
2. Is in bearer form or endorsed in blank by an appropriate person or registered in the name of the clearing corporation, a custodian bank or a nominee of any of them; or
408.320(1)(b)
(b) If uncertificated, is registered in the name of the clearing corporation, another clearing corporation, a custodian bank or a nominee of any of them.
408.320(2)
(2) Under this section entries may be made with respect to like securities or interests therein as a part of a fungible bulk and may refer merely to a quantity of a particular security without reference to the name of the registered owner, certificate or bond number or the like and, in appropriate cases, may be on a net basis taking into account other transfers, pledges or releases of the same security.
408.320(3)
(3) A transfer under this section is effective (
s. 408.313) and the purchaser acquires the rights of the transferor (
s. 408.301). A pledge or release under this section is the transfer of a limited interest. If a pledge or the creation of a security interest is intended, the security interest is perfected at the time when both value is given by the pledgee and the appropriate entries are made (
s. 408.321). A transferee or pledgee under this section may be a bona fide purchaser (
s. 408.302).
408.320(5)
(5) That entries made on the books of the clearing corporation as provided in
sub. (1) are not appropriate does not affect the validity or effect of the entries or the liabilities or obligations of the clearing corporation to any person adversely affected thereby.
408.320 History
History: 1985 a. 237.
