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.
408.321
408.321
Enforceability, attachment, perfection and termination of security interests. 408.321(1)
(1) A security interest in a security is enforceable and can attach only if it is transferred to the secured party or a person designated by him or her under
s. 408.313 (1).
408.321(2)
(2) A security interest so transferred pursuant to agreement by a transferor who has rights in the security to a transferee who has given value is a perfected security interest, but a security interest that has been transferred solely under
s. 408.313 (1) (i) becomes unperfected after 21 days unless, within that time, the requirements for transfer under any other provision of
s. 408.313 (1) are satisfied.
408.321(3)(a)1.
1. No filing is required to perfect the security interest; and
408.321(3)(a)2.
2. No written security agreement signed by the debtor is necessary to make the security interest enforceable, except as otherwise provided in
s. 408.313 (1) (h),
(i) or
(j).
408.321(3)(b)
(b) The secured party has the rights and duties provided under
s. 409.207, to the extent they are applicable, whether or not the security is certificated, and, if certificated, whether or not it is in his or her possession.
408.321(4)
(4) Unless otherwise agreed, a security interest in a security is terminated by transfer to the debtor or a person designated by him or her under
s. 408.313 (1). If a security is thus transferred, the security interest, if not terminated, becomes unperfected unless the security is certificated and is delivered to the debtor for the purpose of ultimate sale or exchange or presentation, collection, renewal or registration of transfer. In that case, the security interest becomes unperfected after 21 days unless, within that time, the security, or securities for which it has been exchanged, is transferred to the secured party or a person designated by him or her under
s. 408.313 (1).
408.321 History
History: 1985 a. 237.
REGISTRATION
408.401
408.401
Duty of issuer to register transfer, pledge or release. 408.401(1)(1) If a certificated security in registered form is presented to the issuer with a request to register transfer or an instruction is presented to the issuer with a request to register transfer, pledge or release, the issuer shall register the transfer, pledge or release as requested if:
408.401(1)(a)
(a) The security is endorsed or the instruction was originated by the appropriate person or persons (
s. 408.308);
408.401(1)(b)
(b) Reasonable assurance is given that those endorsements or instructions are genuine and effective (
s. 408.402);
408.401(1)(c)
(c) The issuer has no duty as to adverse claims or has discharged the duty (
s. 408.403);
408.401(1)(d)
(d) Any applicable law relating to the collection of taxes has been complied with; and
408.401(1)(e)
(e) The transfer, pledge or release is in fact rightful or is to a bona fide purchaser.
408.401(2)
(2) If an issuer is under a duty to register a transfer, pledge or release of a security, the issuer is also liable to the person presenting a certificated security or an instruction for registration or his or her principal for loss resulting from any unreasonable delay in registration or from failure or refusal to register the transfer, pledge or release.
408.401 History
History: 1985 a. 237.
408.402
408.402
Assurance that endorsements and instructions are effective. 408.402(1)(1) The issuer may require the following assurance that each necessary endorsement (
s. 408.308) is genuine and effective:
408.402(1)(a)
(a) In all cases, a guarantee of the signature (
s. 408.312 (1) or
(2)) of the person endorsing a certificated security or originating an instruction including, in the case of an instruction, a warranty of the taxpayer identification number or, in the absence thereof, other reasonable assurance of identity;
408.402(1)(b)
(b) If the endorsement is made or the instruction is originated by an agent, appropriate assurance of authority to sign;
408.402(1)(c)
(c) If the endorsement is made or the instruction is originated by a fiduciary, appropriate evidence of appointment or incumbency;
408.402(1)(d)
(d) If there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and
408.402(1)(e)
(e) If the endorsement is made or the instruction is originated by a person not covered by any of the foregoing, assurance appropriate to the case corresponding as nearly as may be to the foregoing.
408.402(2)
(2) A "guarantee of the signature" in
sub. (1) means a guarantee signed by or on behalf of a person reasonably believed by the issuer to be responsible. The issuer may adopt standards with respect to responsibility if they are not manifestly unreasonable.
408.402(3)
(3) "Appropriate evidence of appointment or incumbency" in
sub. (1) means:
408.402(3)(a)
(a) In the case of a fiduciary appointed or qualified by a court, a certificate issued by or under the direction or supervision of that court or an officer thereof and dated within 60 days before the date of presentation for transfer, pledge or release; or
