An individual who is an agent whose performance of investment advice is solely incidental to the individual acting as an agent and who does not receive special compensation for investment advisory services.
An individual who is employed by or associated with a federal covered investment adviser, unless the individual has a “place of business" in this state, as that term is defined by rule adopted under section 203A of the Investment Advisers Act of 1940 (15 USC 80b-3a
), and, in addition to the place of business, any of the following apply to the individual:
The individual is an “investment adviser representative," as that term is defined by rule adopted under section 203A of the Investment Advisers Act of 1940 (15 USC 80b-3a
The individual is not a supervised person, as defined in section 202 (a) (25) of the Investment Advisers Act of 1940 (15 USC 80b-2
An individual who is excluded by rule adopted or order issued under this chapter.
“Issuer" means a person that issues or proposes to issue a security, subject to the following:
The issuer of a voting trust certificate, collateral trust certificate, certificate of deposit for a security, or share in an investment company without a board of directors or individuals performing similar functions is the person performing the acts and assuming the duties of depositor or manager pursuant to the trust or other agreement or instrument under which the security is issued.
The issuer of an equipment trust certificate or similar security serving the same purpose is the person by which the property is or will be used or to which the property or equipment is or will be leased or conditionally sold or that is otherwise contractually responsible for assuring payment of the certificate.
The issuer of a fractional undivided interest in an oil, gas, or other mineral lease or in payments out of production under a lease, right, or royalty is the owner of an interest in the lease or in payments out of production under a lease, right, or royalty, whether whole or fractional, that creates fractional interests for the purpose of sale.
With respect to a fractional or pool interest in a life settlement investment, “issuer" means every person who creates the fractional or pool interest for the purpose of offering or selling the interest.
With respect to a life settlement investment that is not a fractional or pool interest, “issuer" means the provider, as defined in s. 632.69 (1) (p)
, or the person who purchases or otherwise acquires the life settlement from a provider and then offers or sells life settlement investments except that, under this paragraph, “issuer" does not include a broker-dealer or agent registered under this chapter and does not include the owner of the insurance policy, certificate of insurance, or death benefit underlying the life settlement investment.
“Life settlement investment" means the entire interest or any fractional or pool interest in a life insurance policy or certificate of insurance or in the death benefit thereunder that is the subject of a life settlement, as defined in s. 632.69 (1) (j)
, but does not include any of the following:
The assignment, transfer, sale, devise or bequest of a death benefit, life insurance policy, or certificate of insurance by the owner to a provider pursuant to s. 632.69
The exercise of accelerated benefits pursuant to the life insurance policy or certificate and consistent with applicable law.
“Nonissuer transaction" or “nonissuer distribution" means a transaction or distribution not directly or indirectly for the benefit of the issuer.
“Offer to purchase" includes an attempt or offer to obtain, or solicitation of an offer to sell, a security or interest in a security for value. The term does not include a tender offer that is subject to section 14 (d) of the Securities Exchange Act of 1934 (15 USC 78n
“Person" means an individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity.
“Place of business" of a broker-dealer, an investment adviser, or a federal covered investment adviser means any of the following:
An office at which the broker-dealer, investment adviser, or federal covered investment adviser regularly provides brokerage or investment advice or solicits, meets with, or otherwise communicates with customers or clients.
Any other location that is held out to the general public as a location at which the broker-dealer, investment adviser, or federal covered investment adviser provides brokerage or investment advice or solicits, meets with, or otherwise communicates with customers or clients.
“Price amendment" means the amendment to a registration statement filed under the Securities Act of 1933 or, if an amendment is not filed, the prospectus or prospectus supplement filed under the Securities Act of 1933 that includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and other matters dependent upon the offering price.
“Principal place of business" of a broker-dealer or an investment adviser means the executive office of the broker-dealer or investment adviser from which the officers, partners, or managers of the broker-dealer or investment adviser direct, control, and coordinate the activities of the broker-dealer or investment adviser.
“Record," except in the phrases “
of record," “official record," and “public record," means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
“Sale" includes every contract of sale, contract to sell, or disposition of a security or interest in a security for value, and “offer to sell" includes every attempt or offer to dispose of, or solicitation of an offer to purchase, a security or interest in a security for value. Both terms include all of the following:
A security given or delivered with, or as a bonus on account of, a purchase of securities or any other thing constituting part of the subject of the purchase and having been offered and sold for value.
A gift of assessable stock involving an offer and sale.
A sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer and a sale or offer of a security that gives the holder a present or future right or privilege to convert the security into another security of the same or another issuer, including an offer of the other security.
“Securities and Exchange Commission" means the United States Securities and Exchange Commission.
“Security" means a note; stock; treasury stock; security future; bond; debenture; evidence of indebtedness; limited partnership interest; life settlement investment or similar agreement; certificate of interest or participation in a profit-sharing agreement; collateral trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting trust certificate; certificate of deposit for a security; fractional undivided interest in oil, gas, or other mineral rights; put, call, straddle, option, or privilege on a security, certificate of deposit, or group or index of securities, including an interest therein or based on the value thereof; put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; or, in general, an interest or instrument commonly known as a “security"; or a certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. The term:
Includes both a certificated and an uncertificated security.
Does not include an insurance or endowment policy or annuity contract under which an insurance company promises to pay a fixed or variable sum of money either in a lump sum or periodically for life or other specified period.
Does not include an interest in a contributory or noncontributory pension or welfare plan subject to the Employee Retirement Income Security Act of 1974 or in a governmental benefit plan qualified for federal income tax purposes under the Internal Revenue Code or trust or fund managed by the investment board.
Subject to the exception in par. (e)
, includes all of the following:
An investment in a common enterprise with the expectation of profits to be derived through the essential managerial efforts of someone other than the investor. For purposes of this subdivision, a “common enterprise" is an enterprise in which the fortunes of the investor are tied to the efficacy of the efforts of those seeking the investment or a third party.
Any investment by which an offeree furnishes initial value to an offeror, and a portion of this initial value is subjected to the risks of the enterprise, and the furnishing of the initial value is induced by the offeror's promises or representations which give rise to a reasonable understanding that a valuable benefit of some kind over and above the initial value will accrue to the offeree as a result of the operation of the enterprise, and the offeree does not receive the right to exercise practical and actual control over the managerial decisions of the enterprise.
Includes as an “investment contract," among other contracts, an interest in a limited liability partnership and in a limited liability company; except an interest, or class or series thereof, in a limited liability partnership or limited liability company is not an “investment contract" if any of the following apply:
Each holder of an interest, or class or series thereof, is actively engaged in the management of the limited liability partnership or limited liability company. However, evidence that partners or members vote or have the right to vote, or the right to information concerning the business and affairs of the limited liability partnership or limited liability company, or the right to participate in management, shall not establish, without more, that all partners or members are actively engaged in the management of the limited liability partnership or limited liability company.
Each holder of an interest, or class or series thereof, is authorized under applicable law or under the partnership, operating, or other governing agreement or document to act for and bind the limited liability partnership or limited liability company and the total number of holders of all interests in the limited liability partnership or limited liability company does not exceed 15.
Does not include a time share created and marketed in accordance with ch. 707
if the requirements under s. 707.11
Does not include a membership interest in a domestic mutual holding company, as provided under s. 644.22
Does not include as an “investment contract" any contract excluded by rule adopted or order issued under this chapter.
“Self-regulatory organization" means a national securities exchange registered under the Securities Exchange Act of 1934, a national securities association of broker-dealers registered under the Securities Exchange Act of 1934, a clearing agency registered under the Securities Exchange Act of 1934, or the Municipal Securities Rulemaking Board established under the Securities Exchange Act of 1934.
“Sign" means to do any of the following, with present intent to authenticate or adopt a record:
To attach or logically associate with the record an electronic symbol, sound, or process.
“State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.
A profit-sharing agreement between management and labor in exchange for wage concessions was not a security. Fore Way Express, Inc. v. Bast, 178 Wis. 2d 693
, 505 N.W.2d 408
(Ct. App. 1993).
There is a presumption that every note is a security, which may be rebutted by showing that the note falls within or closely resembles the family of instruments deemed not to be securities. Family resemblance is determined by examining four factors: 1) the motivations of a reasonable seller and buyer; 2) the note's plan of distribution; 3) the reasonable expectations of the investing public; and 4) whether other risk-reducing factors exist, making unnecessary the application of the securities laws to protect the public. State v. McGuire, 2007 WI App 139
, 302 Wis. 2d 688
, 735 N.W.2d 555
When a certificate of stock was mailed to the plaintiff in Wisconsin, and extensive solicitation was conducted by the defendants in Wisconsin, there was an “offer" within former s. 551.02 (11) (b), 1969 stats. Since the securities were neither registered in Wisconsin nor exempt from registration, the plaintiff was entitled to rescind the transaction and recover the purchase price of the securities, plus costs. Hardtke v. Love Tree Corp., 386 F. Supp. 1085
An “offer to sell" under former s. 551.02 (11) (b), 1973 stats., was made when the defendant gave an unexecuted partnership agreement to the plaintiff implicitly inviting the plaintiff to return it completed as to form and amount. Feitler v. Midas Associates, 418 F. Supp. 735
The above annotations refer to ch. 551 as it existed prior to its repeal and recreation by 2007 Wis. Act 196
References to federal statutes.
“Securities Act of 1933" (15 USC 77a
et seq.), “Securities Exchange Act of 1934" (15 USC 78a
et seq.), “Public Utility Holding Company Act of 1935" (15 USC 79
et seq.), “Investment Company Act of 1940" (15 USC 80a-1
et seq.), “Investment Advisers Act of 1940" (15 USC 80b-1
et seq.), “Employee Retirement Income Security Act of 1974" (29 USC 1001
et seq.), “National Housing Act" (12 USC 1701
et seq.), “Commodity Exchange Act" (7 USC 1
et seq.), “Internal Revenue Code" (26 USC 1
et seq.), “Securities Investor Protection Act of 1970" (15 USC 78aaa
et seq.), “Securities Litigation Uniform Standards Act of 1998" (112 Stat. 3227), “Small Business Investment Act of 1958" (15 USC 661
et seq.), and “Electronic Signatures in Global and National Commerce Act" (15 USC 7001
et seq.) mean those statutes and the rules and regulations adopted under those statutes, as in effect on the date of enactment of this chapter, or as later amended.
History: 2007 a. 196
References to federal agencies.
A reference in this chapter to an agency or department of the United States is also a reference to a successor agency or department.
History: 2007 a. 196
Electronic records and signatures.
This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, but does not modify, limit, or supersede section 101 (c) of that act (15 USC 7001
(c)) or authorize electronic delivery of any of the notices described in section 103 (b) of that act (15 USC 7003
(b)). This chapter authorizes the filing of records and signatures, when specified by provisions of this chapter or by a rule adopted or order issued under this chapter, in a manner consistent with section 104 (a) of that act (15 USC 7004
History: 2007 a. 196
EXEMPTIONS FROM REGISTRATION
A security, including a revenue obligation or a separate security as defined in Rule 131 (17 CFR 230.131
) adopted under the Securities Act of 1933, issued, insured, or guaranteed by the United States; by a state; by a political subdivision of a state; by a public authority, agency, or instrumentality of one or more states; by a political subdivision of one or more states; or by a person controlled or supervised by and acting as an instrumentality of the United States under authority granted by the Congress; or a certificate of deposit for any of the foregoing but any revenue obligation payable from payments to be made in respect of property or money used under a lease, sale, or loan arrangement by or for a nongovernmental industrial or commercial enterprise is exempt only as provided under par. (b)
Unless subject to a letter of credit of a bank, savings bank, or savings and loan association as provided in this paragraph, a revenue obligation of an issuer specified under par. (a)
that is payable from payments to be made in respect of property or money used under a lease, sale, or loan arrangement by or for a nongovernmental industrial or commercial enterprise is exempt subject to rules adopted by the division of securities. A revenue obligation is exempt from any filing under the rules of the division if it is the subject of a guarantee or an irrevocable letter of credit from a depository institution in favor of holders of the revenue obligations providing for payment of all principal of the revenue obligations and all accrued and unpaid interest to the date of an event of default on the revenue obligations, and the letter of credit is accompanied by an opinion of counsel stating all of the following:
Either that payment of debt service will not constitute a preference under federal bankruptcy law if a petition in bankruptcy with respect to the enterprise is filed or that the guarantee or letter of credit will provide for reimbursement to holders of the revenue obligations if they are required by order of a federal bankruptcy court to disgorge as a preference any payment of a debt service.
That the enforceability of the guarantee or letter of credit would not be materially affected by the filing of a petition under federal bankruptcy law with respect to the enterprise or any person obligated to reimburse the depository institution for payments made under the guarantee or letter of credit.
A security issued, insured, or guaranteed by a foreign government with which the United States maintains diplomatic relations, or any of its political subdivisions, if the security is recognized as a valid obligation by the issuer, insurer, or guarantor.
A security issued by and representing or that will represent an interest in or a direct obligation of, or be guaranteed by, any of the following:
A banking institution organized under the laws of the United States; a member bank of the Federal Reserve System; or a depository institution a substantial portion of the business of which consists or will consist of receiving deposits or share accounts that are insured to the maximum amount authorized by statute by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, or a successor authorized by federal law or exercising fiduciary powers that are similar to those permitted for national banks under the authority of the Comptroller of Currency pursuant to Section 1 of Public Law 87-722 (12 USC 92a
Any other depository institution, unless by rule or order the administrator proceeds under s. 551.204
A security issued by and representing an interest in, or a debt of, or insured or guaranteed by, an insurance company authorized to do business in this state.
A security issued or guaranteed by a railroad, other common carrier, public utility, or public utility holding company that is any of the following:
Regulated in respect to its rates and charges by the United States or a state.
Regulated in respect to the issuance or guarantee of the security by the United States, a state, Canada, or a Canadian province or territory.
A public utility holding company registered under the Public Utility Holding Company Act of 1935 or a subsidiary of such a registered holding company within the meaning of that act.
A federal covered security specified in section 18 (b) (1) of the Securities Act of 1933 (15 USC 77r
(b) (1)) or by rule adopted under that provision or a security listed or approved for listing on another securities market specified by rule under this chapter; a put or a call option contract; a warrant; a subscription right on or with respect to such securities; or an option or similar derivative security on a security or an index of securities or foreign currencies issued by a clearing agency registered under the Securities Exchange Act of 1934 and listed or designated for trading on a national securities exchange, a facility of a national securities exchange, or a facility of a national securities association registered under the Securities Exchange Act of 1934 or an offer or sale, of the underlying security in connection with the offer, sale, or exercise of an option or other security that was exempt when the option or other security was written or issued; or an option or a derivative security designated by the Securities and Exchange Commission under section 9 (b) of the Securities Exchange Act of 1934 (15 USC 78i
A security issued by a person organized and operated exclusively for religious, educational, benevolent, fraternal, charitable, social, athletic, or reformatory purposes, or as a chamber of commerce, and not for pecuniary profit, no part of the net earnings of which inures to the benefit of a private stockholder or other person, or a security of a company that is excluded from the definition of an investment company under section 3 (c) (10) (B) of the Investment Company Act of 1940 (15 USC 80a-3
(c) (10) (B)); except that with respect to the offer or sale of a note, bond, debenture, or other evidence of indebtedness issued by such a person, a rule may be adopted under this chapter limiting the availability of this exemption by classifying securities, persons, and transactions, imposing different requirements for different classes, specifying with respect to par. (b)
the scope of the exemption and the grounds for denial or suspension, and requiring an issuer to do any of the following:
To file a notice specifying the material terms of the proposed offer or sale and copies of any proposed sales and advertising literature to be used and provide that the exemption becomes effective if the administrator does not disallow the exemption within the period established by the rule.
To file a request for exemption authorization for which a rule under this chapter may specify the scope of the exemption, the requirement of an offering statement, the filing of sales and advertising literature, the filing of consent to service of process complying with s. 551.611
, and grounds for denial or suspension of the exemption.
Any securities of a cooperative corporation organized under ch. 185
or an unincorporated cooperative association organized under ch. 193
An equipment trust certificate with respect to equipment leased or conditionally sold to a person, if any security issued by the person would be exempt under this section or would be a federal covered security under section 18 (b) (1) of the Securities Act of 1933 (15 USC 77r
History: 2007 a. 196
; 2011 a. 178
An isolated nonissuer transaction, whether effected by or through a broker-dealer or not.
A nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter, and a resale transaction by a sponsor of a unit investment trust registered under the Investment Company Act of 1940, in a security of a class that has been outstanding in the hands of the public for at least 90 days if, at the date of the transaction, all of the following apply: