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
408.402(3)(b)
(b) In any other case, a copy of a document showing the appointment or a certificate issued by or on behalf of a person reasonably believed by the issuer to be responsible or, in the absence of that document or certificate, other evidence reasonably deemed by the issuer to be appropriate. The issuer may adopt standards with respect to the evidence if they are not manifestly unreasonable. The issuer is not charged with notice of the contents of any document obtained under this paragraph except to the extent that the contents relate directly to the appointment or incumbency.
408.402(4)
(4) The issuer may elect to require reasonable assurance beyond that specified in this section, but if it does so and for a purpose other than that specified in
sub. (3) (b), both requires and obtains a copy of a will, trust, indenture, articles of partnership, bylaws, or other controlling instrument, it is charged with notice of all matters contained therein affecting the transfer, pledge or release.
408.402 History
History: 1985 a. 237;
1993 a. 490.
408.403
408.403
Issuer's duty as to adverse claims. 408.403(1)
(1) An issuer to whom a certificated security is presented for registration shall inquire into adverse claims if:
408.403(1)(a)
(a) A written notification of an adverse claim is received at a time and in a manner affording the issuer a reasonable opportunity to act on it prior to the issuance of a new, reissued or reregistered certificated security, and the notification identifies the claimant, the registered owner and the issue of which the security is a part, and provides an address for communications directed to the claimant; or
408.403(1)(b)
(b) The issuer is charged with notice of an adverse claim from a controlling instrument it has elected to require under
s. 408.402 (4).
408.403(2)
(2) The issuer may discharge any duty of inquiry by any reasonable means, including notifying an adverse claimant by registered or certified mail at the address furnished by the adverse claimant or if there is no such address at the adverse claimant's residence or regular place of business that the security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within 30 days from the date of mailing the notification, either:
408.403(2)(a)
(a) An appropriate restraining order, injunction or other process issues from a court of competent jurisdiction; or
408.403(2)(b)
(b) There is filed with the issuer an indemnity bond sufficient in the issuer's judgment to protect the issuer and any transfer agent, registrar or other agent of the issuer involved from any loss it or they may suffer by complying with the adverse claim.
408.403(3)
(3) Unless an issuer is charged with notice of an adverse claim from a controlling instrument which it has elected to require under
s. 408.402 (4) or receives notification of an adverse claim under
sub. (1), if a certificated security presented for registration is endorsed by the appropriate person or persons the issuer is under no duty to inquire into adverse claims. In particular:
408.403(3)(a)
(a) An issuer registering a certificated security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent, or correct description of the fiduciary relationship and thereafter the issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security;
408.403(3)(b)
(b) An issuer registering transfer on an indorsement by a fiduciary is not bound to inquire whether the transfer is made in compliance with a controlling instrument or with the law of the state having jurisdiction of the fiduciary relationship, including any law requiring the fiduciary to obtain court approval of the transfer;
408.403(3)(c)
(c) The issuer is not charged with notice of the contents of any court record or file or other recorded or unrecorded document even though the document is in its possession and even though the transfer is made on the indorsement of a fiduciary to the fiduciary himself or herself or to his or her nominee; and
408.403(3)(d)
(d) An issuer registering a transfer of a security upon an indorsement by a corporation, either individually or as fiduciary in whose name the security is registered, is not bound to inquire whether the indorsement is within the authority of the indorsing officer, or to obtain any corporate resolution or supporting paper, and may assume without inquiry that the indorsement is within the authority of the indorsing officer or officers, that each person who executes the indorsement is an incumbent of the office in which capacity he or she purports to sign and that if more than one officer is required to execute the indorsement, all who must execute it have done so.
408.403(4)
(4) An issuer is under no duty as to adverse claims with respect to an uncertificated security except:
408.403(4)(a)
(a) Claims embodied in a restraining order, injunction or other legal process served upon the issuer if the process was served at a time and in a manner affording the issuer a reasonable opportunity to act on it in accordance with the requirements of
sub. (5).
408.403(4)(b)
(b) Claims of which the issuer has received a written notification from the registered owner or the registered pledgee if the notification was received at a time and in a manner affording the issuer a reasonable opportunity to act on it in accordance with the requirements of
sub. (5).
408.403(4)(c)
(c) Claims, including restrictions on transfer not imposed by the issuer, to which the registration of transfer to the present registered owner was subject and were so noted in the initial transaction statement sent to him or her.
408.403(4)(d)
(d) Claims as to which an issuer is charged with notice from a controlling instrument it has elected to require under
s. 408.402 (4).
408.403(5)
(5) If the issuer of an uncertificated security is under a duty as to an adverse claim, he or she discharges that duty by:
408.403(5)(b)
(b) Refusing to register the transfer or pledge of the security unless the nature of the claim does not preclude transfer or pledge subject thereto.
408.403(6)
(6) If the transfer or pledge of the security is registered subject to an adverse claim, a notation of the claim must be included in the initial transaction statement and all subsequent statements sent to the transferee and pledgee under
s. 408.408.
408.403(7)
(7) Notwithstanding
subs. (4) and
(5), if an uncertificated security was subject to a registered pledge at the time the issuer first came under a duty as to a particular adverse claim, the issuer has no duty as to that claim if transfer of the security is requested by the registered pledgee or an appropriate person acting for the registered pledgee unless:
408.403(7)(a)
(a) The claim was embodied in legal process which expressly provides otherwise.
408.403(7)(b)
(b) The claim was asserted in a written notification from the registered pledgee.
408.403(7)(c)
(c) The claim was one as to which the issuer was charged with notice from a controlling instrument it required under
s. 408.402 (4) in connection with the pledgee's request for transfer.
408.403(7)(d)
(d) The transfer requested is to the registered owner.
