Chapter 551

551.603(2)(b)3. 3. Imposing a civil penalty up to $5,000 for a single violation or up to $250,000 for more than one violation; an order of rescission, restitution, or disgorgement directed to a person that has engaged in an act, practice, or course of business constituting a violation of this chapter or the predecessor act or a rule adopted or order issued under this chapter or the predecessor act.

551.603(2)(b)4. 4. Ordering the payment of prejudgment and postjudgment interest.

551.603(2)(c) (c) Order such other relief as the court considers appropriate.

551.603(3) (3) No bond required. The administrator may not be required to post a bond in an action or proceeding under this chapter.

551.603(4) (4) Enhancement of civil penalties.

551.603(4)(a) (a) In any action under this section, if the court imposes a civil penalty under sub. (2) (b) 3. for any violation against another person who is at least 65 years of age when the violation occurs, for each such violation the civil penalty prescribed under sub. (2) (b) 3. for a single violation may be increased by not more than $5,000 and the maximum civil penalty for more than one violation may be increased by not more than $250,000.

551.603(4)(b) (b) This subsection provides for the enhancement of the civil penalties applicable for any underlying violation. If the court is not the trier of fact, the court shall direct that the trier of fact find a special verdict as to the age of any victim at the time of the violation.

551.603(4)(c) (c) It is no defense to the enhancement of civil penalties under this subsection that the defendant did not know the age of the victim or reasonably believed that the victim was not at least 65 years of age.

551.603 History History: 2007 a. 196; 2009 a. 196.

551.604 551.604 Administrative enforcement.

551.604(1) (1) Issuance of an order or notice. If the administrator determines that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter or that a person has materially aided, is materially aiding, or is about to materially aid an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter, the administrator may do any of the following:

551.604(1)(a) (a) Issue an order directing the person to cease and desist from engaging in the act, practice, or course of business or to take other action necessary or appropriate to comply with this chapter.

551.604(1)(b) (b) Issue an order denying, suspending, revoking, or conditioning the exemptions for a broker-dealer under s. 551.401 (2) (d) or (f) or an investment adviser under s. 551.403 (2) (a) 3.

551.604(1)(c) (c) Issue an order under s. 551.204.

551.604(2) (2) Summary process. An order under sub. (1) is effective on the date of issuance. Upon issuance of the order, the administrator shall promptly serve each person subject to the order with a copy of the order and a notice that the order has been entered. The order must include a statement of any civil penalty, restitution, disgorgement, interest, or costs of investigation the administrator will seek, a statement of the reasons for the order, and notice that, within 15 days after receipt of a request in a record from the person, the matter will be scheduled for a hearing. If a person subject to the order does not request a hearing and none is ordered by the administrator within 30 days after the date of service of the order, the order, including the imposition of a civil penalty or requirement for payment of restitution, disgorgement, interest, or the costs of investigation sought in a statement in the order, becomes final as to that person by operation of law. If a hearing is requested or ordered, the administrator, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend it until final determination.

551.604(3) (3) Procedure for final order. If a hearing is requested or ordered pursuant to sub. (2), a hearing must be held pursuant to ch. 227. A final order may not be issued unless the administrator makes findings of fact and conclusions of law in a record in accordance with ch. 227. The final order may make final, vacate, or modify the order issued under sub. (1).

551.604(4) (4) Civil penalty. In a final order under sub. (3), the administrator may impose a civil penalty in the form of an administrative assessment up to $5,000 for a single violation or up to $250,000 for more than one violation except that, if the violation is committed against another person who is at least 65 years of age when the violation occurs, for each such violation the civil penalty may be up to $10,000 for a single violation or up to $500,000 for more than one violation. It is no defense to the enhancement of civil penalties under this subsection that the defendant did not know the age of the victim or reasonably believed that the victim was not at least 65 years of age.

551.604(4m) (4m) Restitution, disgorgement, and interest. In a final order under sub. (3), in addition to any civil penalty under sub. (4) or costs under sub. (5), the administrator may order a person subject to the order to do any of the following:

551.604(4m)(a) (a) Pay restitution to any person suffering loss as a result of the violation.

551.604(4m)(b) (b) Disgorge any profits received as a result of the violation.

551.604(4m)(c) (c) Pay interest at the legal rate under s. 138.04 from the date of the violation.

551.604(5) (5) Costs. In a final order, the administrator may charge the actual cost of an investigation or proceeding for a violation of this chapter or a rule adopted or order issued under this chapter.

551.604(6) (6) Filing of certified final order with court; effect of filing. If a petition for judicial review of a final order is not filed in accordance with s. 551.609, the administrator may file a certified copy of the final order with the clerk of a court of competent jurisdiction. The order so filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court.

551.604(7) (7) Enforcement by court; further civil penalty. If a person does not comply with an order under this section, the administrator may petition a court of competent jurisdiction to enforce the order. The court may not require the administrator to post a bond in an action or proceeding under this section. If the court finds, after service and opportunity for hearing, that the person was not in compliance with the order, the court may adjudge the person in civil contempt of the order. The court may impose a further civil penalty against the person for contempt in an amount not less than $5,000 but not greater than $100,000 for each violation and may grant any other relief the court determines is just and proper in the circumstances.

551.604 History History: 2007 a. 196; 2009 a. 196.

551.605 551.605 Rules, forms, orders, interpretative opinions, and hearings.

551.605(1) (1) Issuance and adoption of forms, orders, and rules. The administrator may do any of the following:

551.605(1)(a) (a) Issue forms and orders and, after notice and comment, adopt and amend rules necessary or appropriate to carry out this chapter, and repeal rules, including rules and forms governing registration statements, applications, notice filings, reports, and other records.

551.605(1)(b) (b) By rule, define terms, whether or not used in this chapter, but those definitions may not be inconsistent with this chapter.

551.605(1)(c) (c) By rule, classify securities, persons, and transactions and adopt different requirements for different classes.

551.605(2) (2) Findings and cooperation. Under this chapter, except as provided under s. 551.412 (4g) (b), (c), and (d), a rule or form may not be adopted or amended, or an order issued or amended, unless the administrator finds that the rule, form, order, or amendment is necessary or appropriate in the public interest or for the protection of investors and is consistent with the purposes intended by this chapter. In adopting, amending, and repealing rules and forms, s. 551.608 applies in order to achieve uniformity among the states and coordination with federal laws in the form and content of registration statements, applications, reports, and other records, including the adoption of uniform rules, forms, and procedures.

551.605(3) (3) Financial statements.

551.605(3)(am) (am) Subject to section 15 (h) of the Securities Exchange Act and section 222 of the Investment Advisers Act of 1940, and except as provided in par. (bm), the administrator may require that a financial statement filed under this chapter be prepared in accordance with generally accepted accounting principles in the United States and comply with other requirements specified by rule adopted or order issued under this chapter. Except as provided in par. (bm), a rule adopted or order issued under this chapter may establish:

551.605(3)(am)1. 1. Subject to section 15 (h) of the Securities Exchange Act and section 222 of the Investment Advisers Act of 1940, the form and content of financial statements required under this chapter.

551.605(3)(am)2. 2. Whether unconsolidated financial statements must be filed.

551.605(3)(am)3. 3. Whether required financial statements must be audited by an independent certified public accountant.

551.605(3)(bm) (bm)

551.605(3)(bm)1. 1. Except as provided in subd. 2., a financial institution holding company whose securities have been registered under this chapter shall not be required to prepare or distribute to shareholders or provide to the department of financial institutions, at any time after such registration, any financial statements, financial information, annual reports, or other periodic reports except to the extent required under ss. 180.1620 and 180.1622.

551.605(3)(bm)2. 2. Each financial institution holding company whose securities have been registered under this chapter and are held by 100 or more persons in this state shall distribute to the security holders not more than 120 days after the end of each fiscal year the annual financial statements prepared under s. 180.1620. This subdivision does not apply to a financial institution holding company that has any securities registered under section 12 of the Securities Exchange Act of 1934 (15 USC 78l).

551.605(3)(bm)3. 3. If any financial statement is required of a financial institution holding company under this chapter, the financial institution holding company shall not be required to do any of the following:

551.605(3)(bm)3.a. a. Except as may be required under s. 180.1620, have the financial statement prepared in accordance with generally accepted accounting principles.

551.605(3)(bm)3.b. b. Have the financial statement examined and reported upon or reviewed by or compiled by any certified public accountant.

551.605(4) (4) Interpretative opinions. The administrator may provide interpretative opinions or issue determinations that the administrator will not institute a proceeding or an action under this chapter against a specified person for engaging in a specified act, practice, or course of business if the determination is consistent with this chapter. A rule adopted or order issued under this chapter may establish a reasonable charge for interpretative opinions or determinations that the administrator will not institute an action or a proceeding under this chapter.

551.605(5) (5) Effect of compliance. A penalty under this chapter may not be imposed for, and liability does not arise from, conduct that is engaged in or omitted in good faith in conformity with a rule, form, or order of the administrator under this chapter.

551.605(6) (6) Presumption for public hearings. A hearing in an administrative proceeding under this chapter must be conducted in public unless the administrator for good cause consistent with this chapter determines that the hearing will not be so conducted.

551.605 History History: 2007 a. 196; 2013 a. 36, 52.

551.606 551.606 Administrative files and opinions.

551.606(1) (1) Public register of filings. The administrator shall maintain, or designate a person to maintain, a register of applications for registration of securities; registration statements; notice filings; applications for registration of broker-dealers, agents, investment advisers, and investment adviser representatives; notice filings by federal covered investment advisers that are or have been effective under this chapter or the predecessor act; notices of claims of exemption from registration or notice filing requirements contained in a record; orders issued under this chapter or the predecessor act; and interpretative opinions or no action determinations issued under this chapter.

551.606(2) (2) Public availability. The administrator shall make all rules, forms, interpretative opinions, and orders available to the public.

551.606(3) (3) Copies of public records. The administrator shall furnish a copy of a record that is a public record or a certification that the public record does not exist to a person that so requests. A rule adopted under this chapter may establish a reasonable charge for furnishing the record or certification. A copy of the record certified or a certificate by the administrator of a record’s nonexistence is prima facie evidence of a record or its nonexistence.

551.606 History History: 2007 a. 196.

551.607 551.607 Public records; confidentiality.

551.607(1) (1) Presumption of public records. Except as otherwise provided in sub. (2), records obtained by the administrator or filed under this chapter, including a record contained in or filed with a registration statement, application, notice filing, or report, are public records and are available for public examination.

551.607(2) (2) Nonpublic records. The following records are not public records and are not available for public examination under sub. (1):

551.607(2)(a) (a) Information and records obtained by the administrator in connection with an audit or inspection under s. 551.411 (4) or a pending investigation under s. 551.602.

551.607(2)(b) (b) A part of a record filed in connection with a registration statement under ss. 551.301 and 551.303 to 551.305 or a record under s. 551.411 (4) that contains trade secrets or confidential information if the person filing the registration statement or record has asserted a claim of confidentiality or privilege that is authorized by law.

551.607(2)(c) (c) A record that is not required to be provided to the administrator or filed under this chapter and is provided to the administrator only on the condition that the record will not be subject to public examination or disclosure.

551.607(2)(d) (d) A nonpublic record received from a person specified in s. 551.608 (1).

551.607(2)(e) (e) Subject to s. 551.406 (6) (a), any social security number, residential address unless used as a business address, and residential telephone number unless used as a business telephone number, contained in a record that is filed.

551.607(2)(f) (f) A record obtained by the administrator through a designee of the administrator that a rule or order under this chapter determines has been appropriately expunged from the administrator’s records by the designee.

551.607(2)(g) (g) Any information or record received under s. 551.202 (26) (k) relating to payments for securities, the copy of the disclosure statement provided to the administrator under s. 551.202 (26) (f) 2., and any information or record obtained by the division under s. 551.205 (1) (c).

551.607(3) (3) Administrator discretion to disclose. If disclosure is for the purpose of a civil, administrative, or criminal investigation, action, or proceeding or to a person specified in s. 551.608 (1), the administrator may disclose a record or information obtained in connection with an audit or inspection under s. 551.411 (4) or a record or information obtained in connection with a pending investigation under s. 551.602.

551.607 History History: 2007 a. 196; 2013 a. 52.

551.608 551.608 Uniformity and cooperation with other agencies.

551.608(1) (1) Objective of uniformity. The administrator shall, in its discretion, cooperate, coordinate, consult, and, subject to s. 551.607, share records and information with the securities regulator of another state, Canada, a Canadian province or territory, a foreign jurisdiction, the Securities and Exchange Commission, the United States Department of Justice, the Commodity Futures Trading Commission, the Federal Trade Commission, the Securities Investor Protection Corporation, a self-regulatory organization, a national or international organization of securities regulators, a federal or state banking or insurance regulator, and a governmental law enforcement agency to effectuate greater uniformity in securities matters among the federal government, self-regulatory organizations, states, and foreign governments.

551.608(2) (2) Policies to consider. In cooperating, coordinating, consulting, and sharing records and information under this section and in acting by rule, order, or waiver under this chapter, the administrator shall, in its discretion, take into consideration in carrying out the public interest the following general policies:

551.608(2)(a) (a) Maximizing effectiveness of regulation for the protection of investors.

551.608(2)(b) (b) Maximizing uniformity in federal and state regulatory standards.

551.608(2)(c) (c) Minimizing burdens on the business of capital formation, without adversely affecting essentials of investor protection.

551.608(3) (3) Subjects for cooperation. The cooperation, coordination, consultation, and sharing of records and information authorized by this section includes:

551.608(3)(a) (a) Establishing or employing one or more designees as a central depository for registration and notice filings under this chapter and for records required or allowed to be maintained under this chapter.

551.608(3)(b) (b) Developing and maintaining uniform forms.

551.608(3)(c) (c) Conducting a joint examination or investigation.

551.608(3)(d) (d) Holding a joint administrative hearing.

551.608(3)(e) (e) Instituting and prosecuting a joint civil or administrative proceeding.

551.608(3)(f) (f) Sharing and exchanging personnel.

551.608(3)(g) (g) Coordinating registrations under ss. 551.301 and 551.401 to 551.404 and exemptions under s. 551.203.

551.608(3)(h) (h) Sharing and exchanging records, subject to s. 551.607.

551.608(3)(i) (i) Formulating rules, statements of policy, guidelines, forms, and interpretative opinions and releases.

551.608(3)(j) (j) Formulating common systems and procedures.

551.608(3)(k) (k) Notifying the public of proposed rules, forms, statements of policy, and guidelines.

551.608(3)(L) (L) Attending conferences and other meetings among securities regulators, which may include representatives of governmental and private sector organizations involved in capital formation, deemed necessary or appropriate to promote or achieve uniformity.

551.608(3)(m) (m) Developing and maintaining a uniform exemption from registration for small issuers, and taking other steps to reduce the burden of raising investment capital by small businesses.

551.608 History History: 2007 a. 196.

551.609 551.609 Judicial review. A final order issued by the administrator under this chapter is subject to judicial review in accordance with ch. 227, but administrative enforcement orders originally entered without hearing may be reviewed only if the party seeking review has requested a hearing within the time provided by s. 551.604 (2).

551.609 History History: 2007 a. 196.

551.611 551.611 Service of process.

551.611(1) (1) Signed consent to service of process. A consent to service of process complying with this section required by this chapter must be signed and filed in the form required by a rule or order under this chapter. A consent appointing the administrator the person’s agent for service of process in a noncriminal action or proceeding against the person, or the person’s successor or personal representative under this chapter or a rule adopted or order issued under this chapter after the consent is filed, has the same force and validity as if the service were made personally on the person filing the consent. A person that has filed a consent complying with this subsection in connection with a previous application for registration or notice filing need not file an additional consent.

551.611(2) (2) Conduct constituting appointment of agent for service. If a person, including a nonresident of this state, engages in an act, practice, or course of business prohibited or made actionable by this chapter or a rule adopted or order issued under this chapter and the person has not filed a consent to service of process under sub. (1), the act, practice, or course of business constitutes the appointment of the administrator as the person’s agent for service of process in a noncriminal action or proceeding against the person or the person’s successor or personal representative.