Securities Regulation. - docs.legis.wisconsin.gov · in securities for the account of others or for his (2) ... (9) "Nonissuer" means ... this chater or the security of transaction

SUBCHAPTER I not include an individual who represents an is -TITLE AND DEFINITIONS suer in effecting transactions in a security ex-

empted by s . 551 . . 22, effecting transactions ex-551 .01 . - Short title . This chapter shall be empted by s . 551 . . 23, or effecting other transae- P,

known and may be cited as the "Wisconsin Un- rtions if no commission or other remunerationiform Securities Law" ,is paid or given directly or indirectly for solic-

551.02 Definitions. In this chapter, unless iting any person in this state.. A partner, officerthee context otherwise requires: or director of a broker-dealer or issuer, or a

(1) "Advertising" means any circular, pro- person occupying a similar status or perform-spectus, advertisement or other material or any ing similar functions, is an agent if he comes ~+communication by radio, television, pictures or within this definition .nsimilar means used in connection with a sale or (3) "Broker-dealer" means any person en-purchase or an offer to sell or purchase any se-curity gaged in the business of effecting transactions ~

in securities for the account of others or for his(2) "Agent" means any individual otherthan a broker-dealer who represents a broker- own account . . "Broker-dealer" does not in-

dealer or issuer in effecting or attempting to ef- elude : '!feet transactions in securities . . "Agent" does (a) An agent ;

551.01 SECURITIES LAW 3832

TITLE XLB .

Securities Regulation .

CHAPTER 551 .

WISCONSIN UNIFORM SECURITIES LAW

SUBCHAPT ER I SUBCHAPTER IV'TITLE . AND DEFINITIONS FRAUDULENT PRACTICES

551 01 Short title. 551 41 Sales and purchases. .551 .02 Definitions. 55142 Market manipulation. ,,

SUBCHAPTER ii. 551 43 'Broker-dealer-activities. .REGISTRATION OF SECURITIES SS1„44 - Advisory'3Ctiv1t10S, _

551 .21 Registration requirement, SUBCHAPTER V55 1 222 Exempt securities. GENERAL PROVISIONS551 23 Exempt transactions . 551 51 Administration..551 24 Exemption proceedings. 551.52 Fees and expenses.551 25 Registration by coordination . 551 53 Advertising .551 26 Registrationn by qualification. 551.54 Misleading filings .551 27 General registration provisions . 551 55 Unlawful representations .551 .28 Denial, suspension and revocation of 551 56 Investigations and subpoenass

registrations, 551 .57 Injunctions .SUBCHAPTER m 551 .58 Criminal penalties .

LICENSING OF BROKER-DEALERS, AGENTS AND 551 59 Civil liabilitiesINVESTMENT ADVISERS 551 60 Miscellaneous powers of Commissioner .

551 31 Licensing requirement 551 61 Hearings and judicial review,551 32 Licensing procedure. 551 62 Stay of proceedings .551 .33 Post-licensing provisions. 551.63 Rules, forms and orders . .551 34 Denial, suspension and revocation of licenses . 551.64 Administrative files and opinions.

551 65 Service of process .551 66 Scope of chapter.551 .67 Statutory policy .551 .68 Saving provisions . .551 .69 Effective date . .

Electronically scanned images of the published statutes.

(g) The investment board; or(h) Other persons not within the intent of

thissubsection whom the commissioner by ruleor, order designates :

(8) "Issuer" means any person who issues oxproposes to issue any security and any promot-er who acts for an issuer- to be formed, except :

(a) With respect to certificates of deposit or'trust certificates, "issuer" means the personperforming the acts and assuming the duties ofdepositor, managerr or, trustee pursuant to theprovisions of the trust or other instrument un-der which the security is issued; and

(b) With respect to certificates of interestt orparticipation in oil, gas or mining titless or,leases, . "issuer" means the owner of any suchtitle or lease who creates fractional intereststherein for purposes of ' sale .

(9) "Nonissuer" means not directly or indi-rectly for the benefit of the issuer .

(10) "Person" means an individual, a corpo-ration, apartnership, an association, a Jointstock company a trust where the interests ofthe beneficiaries are evidenced by a security,an unincorporated organization,, a government,a political subdivision of a gove rnment or anyother entity..

(11) (a) "Sale" or "sell" includes every sale,disposition or exchange, and every contract ofsale of, or contract to Sell, a security or interestin a security for value .

(b) "Offer" or "offer to sell" includess everyattempt or offer to selll or dispose of, or solici-tation of an offer to purchase, a security or in-terest in a security for ' value, but does not in-clude solicitation by a licensed broker-dealer oftentative reservations of securities which shallnot be binding upon the purchaser unt il rati-fied by him ' after the securities may legally besold .

(c) Any security given or delivered with, oras a bonus on account of, any purchase of se-curities or any other thing is considered toconstitute part of the subject of the purchaseand to have been offered and sold for value

(d) Every sale or, offer of a warrant or rightto purchase or subscribe to another security ofthe same or another issuer, as well as everysale or offer of a security , which gives the hold-er a pr esent or future right or privilege to con-vest, into another security of the same or an-other, issuer; is considered to include an of ferof the other security.

(e) The terms defined in this subsection 'donot includee any bona fide pledge or loan .

(b) An issuer;(c) A bank ; savings institution or trust com-

pany, when effecting transactions for its ownaccount or as agent under s . 55131 (5);

(d) An executor, administ rator, guardian,conservator or pledgee;

(e) A person who has no place of business inthis state if he effects transactions in this stateexclusively with or through , persons exemptunder s. 551,23 (8);

(f) A person whose dealings in securities arelimited to transactions exempt by s 551,23 (5);

(g) A person licensed as a real estate brokerunder ch 452 and whose transactions in secu-rities are isolated transactions incidental tothat business ; or

(h) The investment board ; or(i) Other persons not w ithin the intent of

this subsection whom the commissioner by ruleor order designates .

(4) "Commissioner" means the commission-er of securities:

(5) "Fraud", "deceit" and "defraud" are notlimited to common law :deceit .(6) "Guaranteed" means guaranteed as to

payment of principal, interest or dividends .(7) "Investment adviser" means any person

who, for compensation, engages in the businessof advising others, either directly or throughpublications or writings, as to the valuee of se-curities or as to the advisability of investing in,purchasing or selling securities, or who, forcompensation and as a part of 'a regular busi-ness, issues or promulgates analyses or, reportsconcerning securities. "Investment adviser"does not include :

(a) A bank, savingss institution or trust com-pany;

(b) A lawyer, accountant, engineer or teach-er whose performance of these services is solelyincidental to the practice of' his profession ;

(c) Abroker-dealer whose performance ofthese ` services is solely incidental to the con-duct of his business as abroker=dealer' and whoreceives no special compensation for ' them ;

(d) À publisher of any bona fide newspaper,news magazine ar' business or financial publi-cation of general, regular and paid circulation ;

(e) A person whose advice, analyses or' re-ports relate only to securities exempted under

(f) A , person who has no place of business inthis state: if his only clients in this state areother, investment advisers , or persons exemptunder s.. 551,23 (8);

3833 SECURITIES LAW 551.02


(12) "Securities act of 1933", "securities ex-change act of 1934", "investment company actof 1940" , ` , investment advisers act of 1940"and "internal revenue code" - mean the federalstatutes of . those names as amended on January1, 1970, includingg such later amendments asthe commissioner determines. aree not inconsist-ent with the purpose ofthis chapter ..

(13)'(a) "Security" means any stock ; treas-ury stock; note ; bond; debenture;, evidence ofindebtedness ; share of beneficial interest in abusiness trust ; certificate of interest or partici-pation in any profit shar ing agreement ; : collat-eral trust certificate; preorganization Subscr p-tion transferable share; investment contract;commodity' futures contract ; voting trust cer-tificate; certificate of deposit for a security ;limited partnership interest; certificate of inter '-est or participation in an oil ;' gas or mining ti-tie ; or lease ; or in payments out of productionunder such a title or lease ; ; or, in general, anyinterest . or instrument commonly known as or-having . the incidents of 'a security or offered inthe manner in which , securities are offered; or 'any certificate of interest or participation in,temporary or interim certificate for, receiptfor, guarantee of or option, warrant or ' i i ght tosubscribe to òr, purchase or sell, any of theforegoing.

(b) ""Security" does not include any fixed orvariable insurance or endowment policy or an-riuity contract under which an insurance com-pany promises to pay money either in a lumpsum or periodically for life or some other' spec-ified period ; anyy beneficial interest in any vol-untary inter, vivos trust not created for the pur-pose of carrying on any business or solely forthe, purpose of voting;; or any, beneficial interesttin , any ; testamentary trust

(14) "State',' means "any ;, state, territory orpossession of the : United-, States, the Distri ct ofColumbia and Puerto Rico : .

History: 1971, c , 84,.

SUBCHAPTER IIREGISTRATION OF SECURITIES .

551 .21 , . Registration requirement . (1) It isunlawful for any person to offer or sell any se-cuiity in, this state unless it is registered underthis chater or the security of transaction is ex-empted under s,, 551.22 or 551.: 23 .

(2) It is unlawful for any issuer or registrantof any securities registered under this chapter.,'or ''any person in control of or controlled by or 'under'common control with the issuer or regis-trant, to offer or sell , any of'. the registered secu-r ities in this -state if the issuer , or registrant isin violation of this chapter, o r any rule under

this chapter, or any order underr this chapter ofwhich he has notice; or if' the registration state..ment relating to the securities, as of the date : ofsuch offer or sale, is incomplete in any rnaferi-al respect or . contains any statement which isfalse or misleading with respect to anyy materialfact .'History: 1971 c. . "84 .

551 .22 Exempt securities. The followingsecurities are exempted from s. 551.21 :(1) Any , security, including a revenue obliga-

tion, . . issued or guaranteed by the UnitedStates, any state, any political : subdivision of astate or any agency or, corporate or other -i n-strumentality of one or more of the foregoing;or any certificate of deposit for any of the fore-going; but this exemption shall not , include anyrevenue obligation ' payable from payments tobe made in respect of property or money usedunder a lease, sale or, loan arrangement' by orfor a nongovernmental industrial or, commer-cial enterp r ise

(2) Any security, excluding a revenue obliga-tion, -issued or guaranteed ,` by Canada, , anyCanadian province, any -political subdivision ofany such prov ince, any agency or corporate orother instrumentality of one or more of . theforegoing, or, any other , foreign governmentwith which , the United States currently main-tains diplomatic relations, if the security is rec-ognized as a valid obligation by the issuer , orguarantor :

(3) Any security issued by and `representingan int erest in or a debt of, or guaranteed by,any bank "organized under the laws of theUnited States, or any bank, savings institutionor trust company organized under the laws ofany state and subject to regulation in respect ofthe issuance or guarantee of its securi ties by agovernmental authority of that state .(4) Any security issued by : and representing

an ìnterest., in or a debt of, or guaranteed by,any federal, savings - and loan association, orany savings and loan or similar . association or-ganized under the laws of any state and . li-censed to .doo business in this state

(5) Any security, issued or guaranteed by anyfederal credit union, or, any credit union . orsimilar association organized and supervisedunder the laws of this state..

(6) Any security issued or , guaranteed by anyrailroad, other common` carrier, public servicecorporation, ` public `' utility or public utilityholding company, which is subject to regula-tion in respect of the issuance or guarantee ofits securities by a governmental authority ofthe United States, any state; Canada or .anyCanadian province ,

551 .02 SECURITIES LAW 3834


551.23 Exempt transactions. The follow-ing transactions are exempted from s: 55121 :

(1) Any isolated nonissuer transaction,whether effected through a broker-dealer ornot,

(2) Any nonissuer transaction effected by orthrough a licensed broker-dealer , pursuant toan unsolicited order or offer to purchase; butthe commissioner ' may by rule require that therecords of the broker-dealer, confirm that theorder or offer to purchase was unsolicited . .

(3) Any sale of any outstanding security byor on behalf' of a person not the issuer and notin control of" the issuer or controlled by the is-suer or under common control with the issuerat a price reasonably related to the currentmarket price if:

(a) The issuer has any securities registeredunder s.. 12 of .the securities exchange act of1934 or exempted from registration by s . 12 (g)(2) (G) of that act , or is an investment compa-ny registered under the investment companyact of 1940; or

(b) Securities of the same class have beenregistered under this chapter under a registra-tion statementt becoming effective within 2years preceding the sale and the registrationhas not been revoked or suspended ; or -

(c) Securities of the same class have beenregistered under the securities act of 1933 andthere is filed with the commissioner a notice ofthe proposed sale and other information as heshall by rule require and the commissionerdoes not by order disallow the exemption with-in 10 days; or

(d) The issuer or applicant files with thecommissioner such information, and an under-taking to file such reports, as he by rule re-quires and the commissioner ' does not by orderdisallow the exemption within: 10 days

(4) Any transaction between : the issuer orother person on whose behalf the offering ismade and an underwriter- or among underwrit-er's.

(5) Any transaction in a bondor, other' evi •,deuce of indebtedness secured by a real orchattel mortgage or deed o#'-. trust, . or by anagreement for the sale of real estate or chattels,if the entire mortgage, deed of trust or, agree-ment together with all, the bonds or other evi-dences of indebtedness secured thereby, is of•fered and sold as aunit .

(6) Any judicial sale or any transaction byan executor-, administrator, sheriff, marshal, re-ceiver,' trustee in bankruptcy; guardiann or con-servator .,

(7) Any security listed, or, approved for list-ing upon notice of issuance, on a national secu-rities exchange registered under the securitiesexchange act of 1934 and designated by rule ofthe commissioner; any other security of thesame issue r r which is of senior or substantiallyequal rank; any security called for by subscrip-tion r ights or warrants so listed or approved ;or, any warrant or right to purchase or sub-scribe to any of the foregoing .

(8) Any security issued to its members by adomestic corporation organized and operatednot for private profit but ` exclusively for reli-gious, educational, benevolent, charitable, fia-te i nal, social, athletic or reformatory purposes;and any evidences of debt issued by any suchhcorporation in, compliance with rules estab-lished by the commissioner with respect totrust indentures.

(9) Any commercial paper which arises outof a current transaction or, the proceeds ofwhich have been or are to be used #or, currenttransactions; and which evidences an obliga-tion to pay cash within 9 months of the: date ofissuance, exclusive- of' days of grace, or any re-newal of suchh paper which is likewise limited,or any guarantee of' such paper or of any suchrenewal ,

(10) - Any investment contract or other secu-rity issued in connection with an employes'stock purchase, savings, pension, profit sharingor similar benefit plan, provided,, in the case ofplans which are not qualified under sec . 401 ofthe internal revenue code and whichh providefor contribution by employes, the commission-er is notified in writing 30 days before the in-ception of the plan.

(11) Any shares of common stock issued bya service corporation organized under s .180,99.

(12) Any securities of a cooperative corpora-tion organized under ch.185 .

(1-3) Any option to put or call any outstand-ing security transactions in which are exempt-ed'under s . 551.23 (3), -

(14) ' Any security issued by a licensed bco-ker-dealer to its officers, partners of employes,subject to such rules as the commissioner mayestablish.

(15) Any contract for the sale or , pu rchase ofa commodity for future delivery .

(16) Contribution ' notes ' issued " . under s..61133 (2) ' (b), and any debt securities ap-proved by the commissioner of insurance andissued under s 611:75 (2) in connection withthe conversion of 'a stock to a mutual corpora-tionHistory: 1971 c 84, 260:

3835 SECURITIES LAW 551 .23


(7) Any transaction executed by a bona fidepledgee without any purpose . of' evading thischapter

(8 ) Any of'f'er ; or sale of a security to the is-suer thereof or to a bank, savings institution,trust company, insurance company, broker-dealer, savings and loan association, invest-merit company as defined in the investmentcompany act of 1940, or pension or profitsharing trust,: or the state or any agency or po-litcal subdivision thereof, or to any other fi-nancial institution or institutional investor,whether such person is acting for, itself or astrustee; -` (9) Any offer or, sale of a preorganization

subscription; if no commission or other remu-neration is paid or-' given directly or indirectlyfor - soliciting any subscriber in this state andno advertising' is " published or circulated unlessit has-been permitted by the commissioner, andif: fihe subscription-is not binding and no pay-ment is made by any subscriber until the secu-rities subscribed for may legally be sold,

(10) Any offer or sale of its securities by acorporation,, partnership. or association havingits principal office in this state, if-the aggregatenumber of persons holding directly or r indirect-ly all ; tHe ~ issuer's . securities, -after the . securitiesto be issued are sold, does not exceed 15, ex-elusive of persons exempt ; under sub.. (8), and ifno commission or ,other remuneration is paidof given directly or indirectly for, soliciting anyperson in this state and no , advertising is pub-lished or circulated unless it ,has been ' permit-fed by .the commissioner, but the commissionermay by rule or order waive the condition withrespect to commissions and may require re =ports of sales under this exemption .

(11) (a) Any transaction pursuant : to an offerdirected' by the offeror to not mo re than 10persons' in this state, excluding persons exemptunder sub. (8) but including persons exemptunder sub, (10); during any period of' ` 12 con-secutive months, whether or not the offero i` orany of the offerees is then present in this state,if the offeror , reasonably believes that all thepersons in this state are purchasing for ' invest-

- ment, and no commission or, oother-', remunera-tion is paid or given 'directly or indirectly, forsoliciting anyy person in this state other thanthose exempt. by:.sub , (8)

(b) The commissioner may~ by rule 'or order ;as to any . secui ty or-transaction or any type : ofsecurity or transaction; withdraw-or, furthercondition this exemption, or-, increase , or ; de-crease the number of < offerees permitted, orwaive the conditions -in par ; (a), and may re-quire reports of sales tinder this exemption _

(12) Any transaction pursuant to an offerr toexisting security holders of' the issuer or of' acorporation which,. prior' to the offer, ownedsubstantially , all of the voting stock of the issu-er ! or, whosee controllingg persons organized theissuer for: the : purpose of the offer-, if no com-mission or' other, remuneration other' thann astandby commission is paid or given directly orindirectly, for soliciting any secur ity holder inthis state, and if the issuer files a notice speci-fying the terms of the offer and all other infoi-rnation which the commissioner by rule re-quires . and the 'commissioner does not by-orderdisallow the : exemption within 10 days "Secu-rity holders" , include persons who at the timeof the transaction are . holders of convertible se-curities, nontransferable warrants or transfera-bie warrants exercisable withinn not more than90 days of their issuance. .(13) Any, transaction incident to a class vote

by stockholders, pursuant to the articles of in-corporation or the applicable corporation stat-ute ; on a merger,, consolidation,: reclassificationof securities, or sale of corporate assets in con-sideration of the issuance : of securi ties of an-other corporation ; or any transaction incidentto a . judicially approved '-- reorganization inwhich a security is issued in exchange for oneor . more outstanding securities, claims or piop-erty;. interests, or, partly in such exchange andpartly for cash

• (14) Any stock split and any stock dividend,wfiether , :the y corporation distributing the-divi-dend is the issuer of the stock or not, if` noth-ing of value is given:iby stockholders for- thedividendother than the surrender of a right toa cash or property dividend -when each stock-holder, may' elect to take the dividend in cashor property or in stock

(15) Any offer or sale of an evidence of debtissued by a ' cotporation organized and operatednot for private profit but exclusively :for, reli-gious, educational, benevolent or , charitablepurposes if the security qualifies under this ex-emption, and if there has `been filed with: thecommissioner a notice identifying the securityand the basis of its qualification under this ex-emption - together , with any fu rther informationas the commissioner by rule ororder requires,and ifthe commissioner does not by order .dis-allow the exemption ,within. .- 10 days or suchshorter, . period, . as he may permit , .The securityqualifies ; under this exemption if the issuer ndany predecessor have not defaulted within thecurrent fiscal; year of the 3 , preceding fiscalyears in any .fixed interest or principal obliga-tion ; and the issuer complies with rules of thecommissioner with respect ; to, trust indentures

551.23 SECURITIES LAW .3836


Upon the entry of a summary order;, the com-missioner shall promptly notify all interestedparties that it has been entered and the reasonstherefor and that within 15 days of the filing ofa written request the matter will be set down forhearing.. If no hearing is requested and none isordered by the commissioner, the order remainsin . effect until it is modified or vacated by thecommissioner . If a hearing is requested or or-dered, .the commissioner, after notice of and op -po ttunity for hearing to all interested parties,may modify or vacate the order or extend ituntil final determination . No order under thissection may operate retroactively . No personmay be considered to violate s 551,21 by reasonof ' any offer or sale effected after , the entry of anor'der ' under this section if ' he was not given no-tice and if he sustains the burden of proo f thathe did not know, and in the exercise of reasona -ble care could not have known, of the order

(2) In any proceeding under this chapter,, theburden of proving an exemption or an excep-tion from a definition is upon the personclaiming it .

History: 1971 c , 84.

and the use of a prospectus; and the securityqualifies under either of the following :

(a) The issuer and its predecessors have notbeen in existence for' 3 years, and the securitiesproposed to be sold are secured by a mortgageor deed of ' trust upon land and buildings whichis or wi ll become a first lien at or prior to theissuance-of such evidences of debt or provisionsatisfactory to the commissioner is made f'or,impounding the proceeds from their sale untilsuch first lien is established, and the totalamount of such securities does not exceed 50%of the then fair market value of the land andbuildings included in such mortgage or deed oftrust, less the amount of any unpaid special as-sessment taxes ; or ,

(b) The issuer or its predecessors have hadnet revenues for each of the 2 fiscal year's nextpreceding such of fer or sale, or average net .trevenues for the last . 3 fiscal years next preced-ing such offer or sale, ., of not lesss than 1 1/2times the aggregate annual interest require-merits on the issue of securities to be sold un-der this subsection and all securities of equalv. ya.v w „g .. ., ... .. .,.,~

after' such sale . "Net revenues" means the ex- 551 .25 Registration by coord ination. (1)cess of` revenues over all expenses of operation Registration by coordination may be used forand maintenance excluding provision for de- any security for, which a registration statementpreciation and extraordinary, , nonrecurring hass been filed under' the securities act of 1933 initemss of revenue and expense: connection with the same offering and has not

(16) Any offer, but not a sale, of a security become effectivefor which registration statements have been (2) A registration statement under this see-filed under both this chapter and the securities tion shall contain the following informationact of 1933 if no stop order or denial order is and be accompanied by the following docu-in effect and no proceeding : is pending under merits in addition to the information specifiedeither laww in s, 55127 (2) and -the consent to service of

(17) Any offer or' sale of warrants for or process required by s . 551 .65 (1) :rights to subscribe to anyy security, provided (a) Three copies of the latest form of pro-the sale of the security deliverable on exercise spectus filed . under the securities act of' 1933

; of the warrant or right is in compliance with (b) If the commissioner by rule or otherwisethis chapter, requires, a copy of'the articles of incorporation

(18) Any other transaction as to which the and bylaws or their substantial equivalents cur-commissioner by rule or order finds that tegis- rently in effect, a copy of any agreements withtration is not necessary or appropriate for the or among underwriters, a copy of any inden-protection of investors . tune or, other instrumentt governing the issu-History:l .97a c 84. ance of the security to be registered, and a

specimen or copy of the security;551 .24 Exemption proceed ings. (1) The (c) If the commissioner requires, any othercommissioner may by older, deny or revoke any information, or- copies of any documents, filedexemption under s . 551,22 or 55123 with re• under the securities act of ;1933 ; and .specs to a specified security or transaction No (d) An undertaking to forward all futuresuch'oxder may be entered without appropriate: amendments to thee federal prospectus, otherprior notice to all interested palsies, opportuni- than an amendment which merely delays thety for healing; and written findings of fact and effective date of -the registration statement, notconclusions of law, except that the commission- later than the first business day after, they ateer may by order summarily deny or revoke any forwarded to or filed with t he securities andof the specified exemptions pending final -deter- exchange commission, or such longer period asurination of any proceeding under, this section: the commissioner, permits



551 ,. 25 SECURITIES LAW 3838

(3) (a) A registration statement under this 551.26 Registration by qualification . (1)section automaticallyy becomes effective at , the Any security may be registered by qualification ,moment the federal registration statement be- , (2) A -registration statement under this sec-comes effective if no stop order is in effect and tion shall contain thee information specified inno proceeding is pending under s . 55128; and s. 551,27 :(2), shall be accompanied by the con-the registration statement has been on file with sent to service of process required by s 551,65the commissioner for at least 10 days; and a (1), and shall contain such further informationstatement of the maximum and minimum pro- and be accompanied by such further docu-posed= offering prices and the maximum under- ments as the commissioner by rule or other-writing discounts and commissions has been on wise - requires. For this purpose the commis =file for 2 full business days or such shorter pe- signer , may classify issuers and types of '' securi-iiod as the commissioner permits and the of- ties :feting is made within these limitations .. (3) Registration under this section becomes

(b) The registrant shall promptly notify the effective when the commissioner so orders : If acommissioner by telephone or telegram of the registration - statement has been on file for atdate and time when the federall registrationn least 30 days and all information required bystatement became effective and the content of the commissioner has been furnished, the per-the price amendment, if any, and shall prompt- son filing the statement may : at any time file 'sly file a post-.effective amendment containing written request that the commissioner take ac-the information and documents in the price tion within ' 10 days following the, filing of suchamendment., "Price amendment" means the fi- request If a request is filed, and the commis-nal federal amendment- . which ' includes astate= signer , takes no action within the period,, thement of the offering price, underwriting and registration becomes effective at the end of ' thesellingg discounts or commissions, amount of 10-day periodproceeds, conversion rates, call prices and oth- (4) ,The .commissioner may by rule or orderer matters dependent upon the offer ing price _ requae ,as a condition of'_ registiation under this .Upon failure to receive the required ; notifica- section that a prospectus containing any desig-tion and post-effective amendment with respect nated part of the information containedd in theeto the, price amendment, the commissioner registration statement or filed Withit be sent ormay enter a stop order, without notice or hear- given to each personn to whom an offer is madeing, retroactively denying effectiveness to the before or concurrently with,thefi rst written of-registrationregistration statementt or suspending itss effec- f'er made to him, otherwise than by means of a ;trueness until compliance with this subsection ; public advertisement, by or forr the account ofis effected, if he promptly notifies the regis- the issuer or any other person on whose behalftrant by telephone or telegram of the . issuance the offering is made, or by any underwriter orrof the order. . If the registrant proves compli- , broker-dealer who is offering part of an unsoldance with the requirements of th is subsection allotment or subscription taken .by him as aas to not ice and post-effectivee amendment, the participant in the idistribut ion; or the eonfirma-stop order shall be vacated . : The commissioner tion of any sale made by or for the account offmay byrule or otherwise waive any of the con- any person ; or the payment pursuant to anyditions specified in par : (a) . If the federal regis- sale; or the delivery of the security pursuant totrafion ' statement becomes` effective before all any sale; 'whichever firstt occurs _ .the cond i tions in this subsection are satisfiedand they are not waived, the registration state- 551 .27 General registration , provisions .meet automatically becomes effective as soon (1) A registration statement may be filed by theas all the conditions are satisfied . . If the regis- issuer ', any other person on whose behalf the .tranf advises `the commissioner of ` the date offer ing i s to be made or a licensed bFOker-deal-when the federal registration statement is exer, but ' the commiss ioner may in specific casespected to become effective, the commissioner require that t'be executed by the issuer'shall promptly 'advise the registrant by tele- (z ) ` EVeiy'registration statement shall sped-

.phone or' telegram, at the registrant's expense, fY .

whether all the conditions are satisfied , and (a) The amount of securities to be offered inwhether he then contemplates the institution ' of this state; ,a pr oceeding under s . 551 .28 ; but this advice (b) The states in which .a registration state-by the commissioner does not preclude the in- ment or application in connection with the of ;-stitufion of such a proceeding at any t ime fering has been or i s , to be filed ; and


(c) Any adverse order ', -,judgment or decree form of subscription or sale contract, and thatentered in connection : with the offering by the a, signed or ' conformedd copyy of each contractregulatory authorities in any state or by any be filed with the commissioner , or preserved forcourt or the securities and exchange commis- any . period up - to 3 yearssion, ; or - any withdrawal of a registration state- (10) The commissioner may by rule or ordermerit of application relating to the offering .g impose other conditions , under which a securi-

(3) Any document filedd unde r this chapter ty.>registered, by qualification or, coord inationnor , a predecessor law within. 5 years preceding may be sold, if these. conditions are reasonablethe filing of a ;registration statement may be in- and in the public interestcorpozated by reference in the, registration (11) A registration statement is effective forstatement to the extent that the document is one year from its effectivee date, or - any longer .currently accurate ; period during which the - security is being of=

(4) The commissioner may by rule o f other= fered or, distributed in a nonexempted transac-wise permit the omission of any item:m of infor - tion by oY , for the account of " the issuer or other ,

the offering is . beingmotion or document from any registration person on whose behalf 'statement , made or by any underwriter , or broker-dealer

(5) The commissioner may by rule or order who is still offering part of an unsold allotmentrequire " as à condition ' of registration, and at or subscription taken by him as a participantthe expense of the Applicant ox. registrant, that in the distribution, provided that the commie-a report by an accountant, engineer, appraiser- signer has been notified of such continued of-or, other , professional person be filed . The com= feing and the period thereof '. Any extension ofmissionei mayy also designate one of` his em- the offering period shall be subject to rules es-ployes to make an examination of the business tablished by, the commissioner All outstandingand records of an issuer of securities for' which- securities of' the, same class as a registered secu-a registration statement has been filed by quali- city -.a t e considered to be registered for the pur-fication, at the expense of the ' applicant or leg- pose of any transaction by or on behalf of a -isttant : person not the issuer and not in control of the

(6) In the case ' of a nonissner distribution, issuer or controlled by the issuer or underinformation may not ' be required under' s common control with the issuer, so long as the551,26'(2) ox- 551 . 27 (12) unless it is known to registration statement is effective, unless other-the person filing' the registration statement ` 'or wis e prescribed by order A registration state-to the persons` on whose behalf the distribution merit may , not be withdrawn after its effectiveis to be, made, or can be furnished by them date ' if any of the securities registered havewithout unreasonable effort or ` expense . been sold in this state, unless permitted by rule

(7) The commissioner may by rule or order or ' order of the commissione i . No registrationrequire as a condition of registration that any statement is effective during the time a stop or-security issued within the , past 3 years or to be der is in effect under s . . 551 .. 28 ..issued ` to a promoter ' for a consideration sub- ,(12) :During the effective period of a Fegis- ;starifially different from the public offering tration ,, statement,, the commissioner may byprice,, or to any person -.;for a corisideratign oth- rule oz ' order require the person who filed the.e t than cash, be deposited in escrow; or that registration statement to file reports, not moreethe proceeds from the sale of the registered se= often - than quarterly, to keep reasonably, cur-curity in this state be impounded until the issu- rent the information contained in the registra-er receives a ,specified amount from the sale of tion statement and. to disclose the progress ofthe security either , ri this state or elsewbere ; or, thee offering . If any of the securities registeredhe may, impose both such requirements The have been sold in the state, ., the commissionerrcommissioner ` may by rule or , order, determine may, by rule or order. extend the period for . 41.the conditions of any escrow or , impounding ing the reports for an additional period not ex-iequiied hereunder, - but he may not reject a de- ceeding 2 years from the date the ; registrationposit

ory sorely because of location in another became effective or, the date , of its last amend-stat e. °' ment or, extension .

( 8 ) The commissioner may by rule require (13) (a) Securities issued ot guaranteed by,that securities of designated classes shall be is- an,insurance, surety, or othez , company , super-sued under a . tr, us4 indenture `containing such vsed ,by the commissioner of i nsurance, or byprovisions as he determines a person whose business cons i sts principally of

(9) The cornini ss ioner may by rule or order owning of controlling the securities of ' : anyrequire as a condition of registration ,that any such company, , may not be registered without;security registered be sold only on a specified the prior approval of the commissioner of in ;

.3839 SECURITIES LAW - 5511 .27


person occupying a s imilar status or perform-ing similar functions, or any person directly orindirectly controlling or controlled by the issu-er, but only if the person filing the registrationstatement is directly or indirectly controlled bythe issuer; or -any broker -dealer or other personinvolved directly or indirectly in the offering ;

(c) The securities are the subject of an ad-ministrative stop order or similar order or ape rmanent or temporary injunction of anycourt of competent jurisdiction entered underany other federal or state act _ applicable to theoffering, butt the commissioner may not insti-tute a proceeding against an effective registra-tion statement under this paragraph more thannonee year from the date of the order- or

in reliedon, and he may not enter an orderunder this paragraph on the basis of an orderor, injunction entered under any other statee actunless that order or injunction was based onfacts which would currently constitute aground for a stop order under this section ;

(d) The issuer's enterprise or method ofbusinesss includess or wouldd include activitieswhich are illegal where performed;

(e) The issuance or sale of the securities is orwould be unfair or inequitable to purchasers orhas worked or tended to work a fraud uponpurchasers or would so operate ;

(f) The offering hass been or would be madewith unreasonable amounts of underwriters'and sellers' discounts, commissions or othercompensation, or promoters' profits or partici-pation, or unreasonable amounts or kinds ofoptions ;

(g) The applicant or registrant has failed topay the proper filing fee ; but the commissionermay enter only, a denial order under this para-graph, and he shall vacate any such o rder whenthe deficiency has been corrected ;

(h) Advertising prohibited by s . 55153 hasbeen used in connectionn with the sale or offer-ing of the securities; or

(i) The financial condition of the issuer ' af-fects or would affect the soundness of the secu-rities .

(2) The commissioner may not institute astop eider proceeding against an effective reg-istration statement on the basis of a fact ortransaction known to him when the registra-tion statement became effective unless the pro-ceeding is instituted within the next 30 days:

(3) In a proceeding for registration by quali-fication, the applicant or registrant has theburden ' of satisfying the requirements of sub ..(1) In a pr oceeding for registration by coordi-nat on, the commissioner has the burden of es-tablishing the existence of one of the causesenumerated in sub. O,

551.28 Denial ,., suspension and revoca-tion of registrations. (1) The commissionermay issue a stop order `denying effectiveness to,or suspending or revoking the effectiveness of,any registration statement ; if he finds that theorder is in the public interest and that :

(a) The registration statement as of its eMc-true date or as of any earlier- date in the case ofan order denying effectiveness, or any amend-ment filed under s. 551 .27 (14) as of its .èffec-tive date, or, any report under s. 551 . .2.7 (12) isincomplete in any material respect or containsany statement which was, in the light of thecircumstances under which it was made, falseor, misleading with respect to any material fact ;

(b) Any provision of this chapte r or anyrule, order of"'condition lawfully imposed un-der this chapter has been wilf ully violated, inconnection with the offering, by the person fir-ing the registration statement; the issuer, anypartner-, officer of director of the issuer, any

551.27 ' SECURITIES LAW-

surance , Issuance of an organization permitunder s . 611 13 constitutes such approval forthe securities described in the permit, and alsoprecludes application of s. 551.28 (1) (d) and(i) .

(b) No issuer which is being organized inthis state or elsewhere solely or partly for thepurpose of organizing a corporation under ch .611 may register or sell its securities in thisstate unless it obtains an organization permitunder s 611 . 13 . No security may be registeredor sold in this state if there is any representa-tion that an insurer will be organized or pur-chased in this state with the proceeds of thesale, unless the issuer obtains an organizationpermit ' under s. 611 . 13 .

(14) A regist r ation statement relating to re-deemable securities issued by an open-endmanagement company or unit investment trustas defined -in the investment company act of1940, or to securiti es issued by any class of fi-nancial institutions which the commissione r byrule determines, may be amended after ' its ef-fective ` date so as to increase the specifiedamount of secur ities proposed to be offered .The amendment becomess effective when thecommissioner so orders:

(15) No warrant or right to purchase or sub -scribe to another security and no security con-vertible into another secur ity shall be regis-tered unless it appears to the commissionerthat both the warrant or right or convertiblesecurity and the securities deliverable , on theexercise of the warrant or , right or conversionprivilege comply with this chapter ,

History: 1971 c.. 84, 260 . . .

3840


(3) It is unlawful for; any person to transactbus iness in this state as an investment adviser',unless he is so licensedd or licensed as a broker-dealer under this chapter or unless his only cli-

sents in this state are persons exempted under s..551 ., 23 ($):

(4) Every license expires one, year from itseffective date unless renewed, or unless the pe-riod of the license is, limited; by rule or order :,The commissioner by rule or order may pre-pare, an initial schedule for license renewals so ,that subsequent renewals of licenses effectiveJanuary 1, 1970, may be staggered by calendar .months.. For, this purpose the commissionermay adjust the license fee proportionately . Nolicense is effective after its expiration, and expi-ration of a license for which; ;a renewal applica-tion ; has not been filed is deemed an applica-tion for withdrawal .: under s .. . 551 34 (6)

(5) A bank, savings institution or trust com-pany not licensed : as abroker- ,dealer may exe-cute orders for the purchase or sale . of securi-

sties as agent for the purchaser of seller thereofin accordance with rules which the < commis-sinner establishes ,.

(6) It is ` unlawful for any licensed broker-dealer, agent or investment: adviser, or any per, .son, directly or indirectly controlling a licensedbroker-dealer or investment adviser, to trans-act business in this state if the licensee is inviolation ofthis chapter, or any rule under thischapter, of any =order under this chapter ofwhich he has notice, or if the information ' con-tained in his application, for- license, as of thedate of such transactions, is incomplete in anymaterial respect or is false or misleading with .respect , to any material fact :

History: 1971 c 84..

551.32 Licensing .: procedure. (1) '(a) , Abroker-dealer, agent or investment advisee mayobtain an initial or, renewal license by filingwith the commissioner , an application together

hwith a consent to service of process , pursuant tos. . 551,65 (1) . , The, application , shall containwhatever information the commissioner by rulerequires concerning the applicant's form andplace of organization, proposed method of do=_ing business and financial condition

; the qualifi-rations and experience ofthe applicant, includ-ing, in the case of a broker-dealer of investmentadviser, the qualifications and 'experience of anyypartner,' officer, di r ector, of controlling person ;any injunction" or administrative order , oor con= ;viction of a misdemeanor- involving securitiesand; any conviction, of a felony , and any othermatters which the commissioner determines arerelevant . to :the application The commissioner' .% 11 -1

551.31 Licensing requirement. (1) It isunlawful fox any person to transact business inthis state as abroker-dealer or- Agent unless he islicensed under' this chapter

„(2) It is unlawful for any broker-dealer . or is-suer, tto, employ an :agent to represent him inthis state unless the agent is licensed : The li-censing of an agent is not effective during anyperiod when he is not associated with,a speci ••'tied broken-dealer licensed " under` this chapter òr, a specified issuer :. No agent shall at anytime 'r" epresent more than one 6roke i -dealer orissuer, except that where organizations ` affiliat-ed by. direct or indirect common control are li-censed b roker-dealers or issuers of securitiesregistered under this chapter, ari agent mayrepresent any such organization When anagent begins or terminates his employmentwith a broker-dealer o 'issuer, or begins or , ter-minates those activities which make "..him ' an :agent; the agent as well as the broker-dealer orissuer shall p romptly notify the commissioner.

384 1

(4) ; The commissioner mayy issue a summaryorder- denying, postponing, : suspending or re-yoking , the effectiveness of' the registrationstatement pending finall determination of anyproceeding under, .-this section . Upon the entryoff the order ; the commissioner shall , promptlynotify each person specified in sub, (5) that ithas been entered and the reasons therefor- andthat within 15 days after the receipt of a writ-ten request ' the matter will be set down forhearing . If no hearing is requested and none isordered by the commissioner ; the order will re-main in effect until it is modified or - vacated bythe commissioner If a hearing 'is requested orordered, the commissioner, after notice ofandopportunity for hearing to each person speci-fied in sub , (5), may modify or vacate the or-der or extend it until final determination .

(5) No stop order may be entered under thissection except under sub;. (4) Without,appropri-ate prior , notice to the applicant or registrant,the issuer : and ' the person on . whose behalf' thesecurities are to be or have been offered ; op-portunity for hearing; and written findings offact and conclusions .: of law .,

(6) The commissioners may vacate or modifya stop - order if he finds that the conditionswhich prompted its entry have changed or thatit is otherwise in the public interest to do so.History:'1974 c,: 84

SUBCHAPTER IIILICENSING OF BROKER-DEALERS ,

AGENTS AND INVESTMENT ADVISERS

SECURITIES LAW 551.32


spondence, memoranda, papers, books and oth-er records which the commissioner by rule pre-scribes: All records required shall be preservedfor 3 years unless the commissioner, by rule pre-scribes otherwise for particular types of r 'ecords..All required records shall be kept within thisstate or shall, at the request of the commission-er, be made available at any time for examina-tion by him either in the principal office of" .thelicensee or by production of exact copies thereof'in this state . . .

(2) Every licensed broker-dealer and invest-ment adviser shall file such reports as the com-missioner by rule prescribes . .

(3) If' the information contained in any ap-plication for license or other document filedwith the commissioner is or becomes inaccu-rate or incomplete in. any material respect, thelicensee shall promptly file a correcting amend-ment(4) The commissioner shall makee periodic

examinations, within or without this state, ofthe business and records of ' each licensed bro-ker-dealer and investment adviser, at suchtimes and in such scope as he determines. Theexaminations may be made without prior , no-tice to the broker-dealer or investmentt adviser ..The expense reasonably attributable to anysuch examination shall be paid by the broker-dealer or investment adviser whose business isexamined, but the expense so payable shall notexceed an amount which the commissioner byrule prescribes For the purpose of avoidingunnecessary duplication of examinations, thecommissioner,, insofar as he deems it practica-ble in administering this subsection, may coop-erate with securities administrators of otherstates, the securities and exchange commission,and any national securities exchange or nation-al securities association registered under the se-curities exchange act of 1934 , : The commission-er shall not make public the information ob-tained in the course of ' examinations, exceptwhen his duty under this chapter requires himto take action regarding any broker-dealer orinvestment adviser or to make the informationavailablee to one of` the agencies specified here-in, or except when called as a witness in anycriminal or civil proceeding ,

(5) The commissioner may by rule prohibittunreasonable charges, profits, commissions orother compensation of broker-dealers and . .d in-vestment advisers .

(6) The commissioner may prescribe rulesfor the conduct of business by broker-dealersand investment advisers which he finds appro-priate in the public interest and for the protec-tion of investors..History: 1971 c . 84

551.33 Post- l icens ing provisions. (1) Ev-ery licensed broker-dealer- and investment ad-viser shall make and keep all accounts, corre-

551 .32 SECURITIES LAW

may by rule or order require an applicant foran initial license to publish an announcementof the application in one or more specifiednewspapers published in this state . .

(b) If no denial order is in effect and no pro-ceeding is pending under s. 55134, the licens-ing becomes effective 30 days after an applica-tion is filed. The commissioner may by rule ororder specify an earlier effective date, and maydefer the effective date ` until 30 days after thefilingg of any amendment .. The commissioner isdirected : to cooperate with other securities ad-ministrators and regulatory authorities to sim-plify and coordinate license application and re-newal procedures .

(2) Before action on an application the com-missioner may designate an employe to makean examination of the books, records and af-fairs of the applicant at the applicant's ex -pense.

(3) A licensed broker-dealer or , investmentadvise r may file - an application for licensing ofa successor, whether ', or not the successor ' isthen in existence, for the unexpired portion ofthe year . There shall be no filing fee . .

(4) The commissioner may by rule prescribestandards of qualification with respect to train-ing, experience and knowledge of the securitiesbusiness and provide for an examination,which may be written or oral or both, to betaken by any class of or all applicants , as wellas persons who represent or will represent aninvestment adviser', and the commissioner mayyby arder, require an examination of a licensedbroker-dealer, agent or investment , adviser fordue cause.. .

(5) The commissioner may by rule require aminimum capital for' broker-dealers and invest-ment advisers and establish limitations on ag-gregate indebtedness of broker-dealers in rela-tion to net capital

(6) The commissioner may by rule requirethe furnishing of surety bonds by broker'-deal-ers and investment advisers and all bonds sorequired shall provide'for suit thereon , by in-jured customers or clients, but no bond may berequired of any licensee whose net capital ex-ceeds " the amount prescribed by rule for thispurpose

(7) The commissioner may by rule or orderimpose other conditions in connection with theissuance of licenses under this chapter as hedeems appropriate in the public interest andfor the protection of investors .

38 4 2


(g) Has engaged in dishonest or unethicalpractices in the securities business or has takenunfair advantage of a customer ; . -

:; (h) Is insolvent, either in the sense that hisliabilities exceed his assets or in the sense that .the cannot meet his obligations as they mature,or is -in- such financiall condition that he cannotcontinue in business with safety to his custom-ers, or has not sufficient financial responsibilityto carry out , the obligations incident to his op-eiations,

(i) Is not qualified on the basis of such fac=to ts as training, experience and knowledge ofthe securities business ;

(j) Has failed reasonably to supervise hisagents if he is a broker-dealer or his employesif he is an investment adviser, but no personshall be deemed to have failed in such supervi-sion; if' there have been established procedures,and . a system for applying such procedures,which-would-reasonably be expected to preventand detect, insofar as practicable, any viola-tions of statutes, rules or orders . and if' suchperson has reasonably discharged, the duties . in,cumbent upon him by reason of such . proce-dures and system without reasonable cause tobelieve that such procedures and system wereriot being complied with ;

(k) Has failed to pay the , proper filing fee,but the commissioner shall vacate any such or-der when the deficiency has been corrected ;

(1) 'Is selling or has' sold; or is offering or hasoffered for sale, in this state securities throughany unlicensed agent or for any dealer : or issu-er with knowledgee that such dealer or issuerhad not or has not complied with this chapter ;or .(m) Has -made any material misrepresen=

tation to or withheld or concealed any materialfact from the commissioner or , any of his repre-sentatives, or •has refused to furnish informa-tion reasonably requested by the commissioner ' ,

(2) The enumeration of the causes stated insub . ,(1) shall not be exclusive and the commis-sioner may deny, suspend or revoke any licenseor censure any licensee for ' any cause whether-similar, to or different from these causes whennecessary or appropriate in the public interestor for' the protection of investors..

(3)' The, commissioner, may not institute ' asuspension or revocation proceeding on the ba-sis of a fact or transaction known to him whenthe license was issued unless the proceeding isinstituted within the next 30 days -

(4)= The commissioner may by order sum-marily deny, postpone . or suspend a license oran , application for ; license pending final ` detez'-m nation; of any proceeding under this section:.

551 .34 Denial , suspens ion and revo ca-tion of I'rcenses . (1) The commissioner may byorder deny, suspend or revoke any license ormay censure the licensee, If he finds that theorder is in the public inteiest and that the appli-cant or licensee or ; in the case of a'b c oker°-deal-er or investment adviser', any partner,' officer ordirector, any person occupying a similar statusor performing similar functions, or any persondirectly or, ; ;indirectly controlling ; the bioker-dealer, or investmentt adviser :

(a) Has filed : an application for license whichas of ;its effective date, or as of, any date afterfiling in the case of an order denying effective-ness, ..was incomplete in any material respect or,contained any statement whichh was, in light ofthe circumstances under which it was- made,false or misleading with respect to any materialfact;

(b) Has wilfully violated or wilfully failed tocomply with any provision of this chapter or apredecessor-law or the securities .act of 1933,the, securities exchange act of' 1934, the invest-ment advisers act of 1940, the investment com-pany act of 1940, or any ruler under . any ofsuch statutes .or . any order thereunder of whichhe has notice; ,

(c) . Has been convicted, within the past~.10years; of any misdemeanor- involving . a securityor ~ any aspect of the securities business, or anyfelony ;,, .

(d) Is permanently or temporarily enjoinedby any court of competent jurisdiction fromengaging in or continuing any conduct-or piac-tree' involving any aspect of the securities busi-ness,ness ;

(e) I s the, subject of an older of the commis-sioner denying, "suspending or revo king a li-cense' as a -broker -dealer-, agent or investmentadviser;

(f) Is the subject of an order entered withinthe past 5' years by the securities' administratorof any other state or by the securities and ex-change commission denying or''ievoking regis-trafion or license as abroker=dealer, agent orinvestment adviser; or is the subject of an or-der of the securities and exchange commissionsuspending br expelling him from a nationalsecurities exchange or 'association, or is thesubject of a United States post office fraud .or-dei ;'but the commissioner may not institute arevocation or suspension proceeding under thisparagraph more. than one year!, from the date ofthe order relied on, and he may not enter,anorder under this parag raph on the basis of anorder under another state law unless the orderwas' based on facts which would currently con-stitute a`ground for an order under this .sec-tion ;

3843 SECURITIES LAW 551 :34


3844

Upon the entry of the order, the commissionershall promptly notify the applicant or licensee,as well as the employer or prospective employ-er if the applicant or licensee is an agent, thatit has been entered and of the reasons thereforand that within 15 days after the filing of awritten request the matter ' will be set down forhearing . If no hearing is requested and nonee isordered by the commissioner, the order re-mains in effect until it is modified or vacatedby the commissioner . If a hearing is requested'or ordered, the commissioner, after notice ofand opportunity for hearing, may modify orvacate thee order or extend it until final deter-mination .

(5) If the commissioner finds that any licens-ee or :applicant . is no longer in existence or hasceased to do business as a broker-dealer, agentor investment adviser, or, is subject to an adju-dication of mental . incompetence or to the con-trol of 'a committee, conservator or guardian,or, ccannot be located after reasonable search,the commissioner may by order, revoke the li-cense of deny the application :

(6) Withdrawal from the status of a licensedb roker-dealer, agent or investment adviser be-comes effective 30 days after, receipt of an ap-plication to withdraw or within such shorterperiod as the commissioner determines, unlessa revocation or suspension proceeding is pend-ing when the application is filed or a proceed-ing, to revoke or suspend or to impose condi-tions upon the withdrawal is instituted within30 days after the application is filed . . If a pro-ceeding is pending or instituted, withdrawalbecomes'effective at such time and upon suchconditions as the commissioner by order deter-mines . If ` no proceeding is pending o r institutedand withdrawal automatically becomes effec-tive, the commissioner may institute a revoca-tion or, suspension proceeding under- sub (1)(b) within one year after withdrawal becameeffective and enter' a revocation or suspensionorder as of the last date on which the licensewas in effect .

(7) No order mayy be entered under this sec-tion except under sub, (4) , without appropriateprior - notice to the applicant or licensee, as wellas the employer or , prospective employer, if ` theapplicant or licensee : is an agent, opportunityfor hearing and written , findings of fact andconclusions of law. In casess of denial orderssuch findings and conclusions shall be provid-ed only if requested by the applicant .,

History: 1971 c 84

551 .41. Sales and purchases . It is unlaw-ful for any .person, in connection with the offer,sale or purchase of any security in this state,directly or indirectly:

(1) To employ any device, scheme or artificeto defiaud;

(2) To make any untrue statement of a ma-terial fact or to omit to state a material factnecessary in order, to make the statementsmade, in the light of the circumstances underwhich they are made, not misleading ; or

(3) To engage in any act, practice or courseof business which operates or would operate asa fraud or deceit upon any person .

551 .42 Market manipulation. It is unlaw-ful for any person, directly or indirectly, in thisstate :

(1) To effect any transaction in a securitywhich involves no change in the beneficialownership thereof, or to enter any order or or-ders for the purchase or sale of any securitywith the knowledge that an order or orders ofsubstantially the same size, at substantially thesame time, and at substantially the same price,for the sale or purchase of the security, havebeen or will be entered by or for the same oraffiliated persons, for the purpose of creating afalse or misleading` appearance of active trad-ing in the security or, a false or misleading ap-pearance with respect to the market for the se-curity;

(2) To effect, alone or with one or more oth-er persons, a series oftransactions in any secu-rity creating actual or apparent active tradingin the security or raising or depressing theprice of the security, for the purpose of induc-ing,the purchase or sale of the security by oth••ers, or

(3) To induce the purchase or sale of any se-curity by the circulation or dissemination ofinformation: to the effect that the price of thesecurity will or is likely to rise or fall: becauseof market operations of any one or more per-sons conducted for thepurpose of raising ordepressing the price of the security, if he isselling or- offeringg to sell or purchasing or, of=•fering to purchase the security or is receiving aconsideration, directly or indirectly, from anysuch person :

551.43 Broker-dealer activit i es: It is un-lawful for a broker-dealer to effect in this stateany transaction in, or to inducee the purchase orsale of, any security by means of any manip ula-


SUBCHAPTER IVFRAUDULENT PRACTICES


551 :52 Fees andd expenses . There shallbe a minimum filing fee of $100 for every iegis -traYion statement filed under s .. 551 25 or-55126 ' . . There shall be an additional fee of one-tenth of one per cent of' the maximum aggregateoffering price at which the registered securitiesare to be offered in this state, and the maximumfiling fee shall in no case be more than $300 If'the registration statement relates to redeemableesecurities issued by an open-end managementcompany or unit investment trust, as defined inthe investment company act of 1940, the addi-tional fee shall be one-twentieth of one per centof the maximum aggregate offering price atwhich the registered securities are to be offereddin this state, and there shall be no maximumfee .. When a registration statement is withdrawnbefore the effective date or apre-effective stoporder is entered under s . . 55 . 1 .. 28, the minimumfee shall be retained .

(2) Every applicant for an -'initial or renewallicense under s. 551 32 shall pay a filing fee of$100 in the 'case of abroker-dealer, $10 in thecase of an agent and $50 in the case of an in-vestment adviser Abroker'-dealerA maintainingany office within this state shall pay an addi-tional filing fee of $20 for each office : When anapplication is denied or withdrawn, the filingfeee shall be retained .

(3) The expenses reasonablyy attributablee tothee examination of any matter arising underthis chapter shall be charged to the applicant,registrant or licensee involved, but the ex-penses, ; so charged shall not exceed such maxi-mum amounts as thee commissioner by ruleprescribes .

(4) All fees and expenses collected underthis section shall be paid into the state treas -ury .

551 .53 , Advertising. It is unlawful for anyperson, in connection with the offer, sale o rpurchase of any security in thiss state, to pub-lish, circulate or use any advertising which con-tains ; an untrue statement of a material fact oromits to state a material fact necessaryy in oz-derrto makee thee statements therein, i n the light ofthe circumstances ,undet which they weremade,not misleading All advertising shall . be filedwith the commissioner not later than the dateof publication or circulation, except advertisingwhich the commissioner exempts by rule or or- :der . The commissioner may by rule or order :prohibit the publication, circulation or , use ofany advertising deemed false or misleading,.

History : 1971, , c , 84, :

tive, deceptive or other fraudulent device orcontrivance, including any fictitious quotation . .The 'commissioner may by rule define theterms "manipulative, deceptive or other fraud-ulent device or contrivance" .

551 .44 Advisory activities. It is unlawfulfor any •per-son' who receives any considerationft om another person primarily for advising theother person as to the value of'securities or theirpurchase or sale, whether through the issuanceof analyses or reports or otherwise, in this state,to employ any device, scheme or artifice to de-fraud the other person; or to engage in any act,practice or course of business which operates orwould operate as a fraud or deceit upon theother person ; .or to take or have custody of anysecurities or funds of anyy client unless the ad-viser is licensed as a broker-dealer under thischapter; The commissioner may prescribe rulesdefining the terms used herein .

SUBCHAPTER VGENERAL PROVIS IONS

551 .51 Administration. (1) This chaptershall be administered by the commissioner ofsecurities, The commissioner shall : appointt adeputy commissioner to serve, at his pleasure .The commissioner may select the deputy fromthe classified servicee employes within the officeor . he may appoint the deputy commissioneroutside the classified service . The commissionermay designate the deputy commissioner or anyemploye to perform any duty or exercise anypower or function assigned to him when he isabsent from the office ..

(2) It is unlawful for the commissioner orany of his officers or employer to use for pe r -sonal benefit any information which is filedwith or, obtained by the commissioner andwhich is not generally available to the public :Nothing in this chapter authorizes the com-missioner or any of his officers or employes todisclose any confidential' information exceptamong themselves or to other securities admin-istrators or, regulatory authorities or when nec=es"saiy or appropriate in a proceeding or inves-tigation under, this chapter . . No provision ofthis chapter either creates or derogates fromany privilege which exists at common law orotherwise when documentary or other evidenceis sought under, a subpoena directed to thecommissioner or any ,of" his officers or em-ployes ;

History : 1971 c, 84

3845 SECURITIES LAW 55 1 :53


551 . 57 Injunctions. Whenever it appears tothe commissioner that any person has engagedor is about to engage in any actt or practice con-stituting a violation of this chapter or any ruleor order' hereunder, he may bring an action inthe name of the state in the circuit court of theappropriate county to enjoin the acts or prac-tices and to enforce compliance with this chap-ter or any rule or order hereunder, or he mayrefer the matter to the attorney general or thedistrict attorney of the appropriate county . .Upon a proper showing, the court may grant apermanent or temporary injunction or restrain-ing order, or may appoint a receiver for the de-fendant or the defendant's assets, or may orderrescission of any sales or purchases of securitiesdetermined' to be unlawful under this chapter orany rule or order fiereunder . The court may notrequire the commissioner to post a bond .

Histoiy : 19 7 1 c' 84.;

551.58 Criminal penalties . (1) Any personwho wilfully violates :any provision of this chap-ter, eexcept s551,.54, or any rule under thischapter, or any order of which he has notice, orwho violates s . 5.51 . .54 knowing or having rea-sonable cause to believe that the statementmade was false or misleading in any materialrespect, may be fined not more than $5,000 orimprisoned not more than 5 years or both . Eachof" the acts specified shall constitute a separateoffense and a prosecution or conviction for anyone of such offenses shall not bar prosecution or,conviction for any other offense . . No indictment

551 . 56 Investigations and subpoenas . (1)The commissioner in his discretion :

(a) May make such public or private investi-gations within or without this state as hedeems necessary to determine whether any per-son has violated or is about to violate thischapter or any rule or order hereunder, or toaid in the enforcement of this chapter or in theprescribing of rules-and forms hereunder;

(b) May require or permit any person to filea statement in writing,, under oath or otherwiseas the commissioner determines, as to all thefacts and circumstances concerning the matterbeing investigated ;

(c) May publish information concerning anyviolation of this chapter or any rule or orderhereunder or concerning securities, or practicesin the sale thereof, which appear or tend to beunfair, inequitable or fraudulent; and

(d) May hold hearings, upon reasonable no-tice, in respect of any matter arising out of theadministration of this chapter .

(2) For the purpose of any investigation,hearing or proceeding under this chapter, thecommissioner or any officer designated by himmay administer oaths and affirmations, sub-poena witnesses, compel their attendance, takeevidence and require the production of any


551 .54 . . Misleading filings. It is unlawfulfor- any person to make or cause to be made, inany document filed with the commissioner or inany proceeding under this chapter, any state-ment which is, at the time and in the light of thecircumstances under which it is made, false ormisleading in any material respect or, in con-nection with such statement, to omit to state amaterial fact necessary in order to make theestatements made, in the light of the circum-stances under which they are made, not mis-leading

551 .55 Unlawful representations . Neitherthe fact that a registration statement or an ap-plication for a license has been filed nor the factthat a security is effectively registered or a per-son is licensed constitutes a finding by the com-missioner that any document filed under thischapter ' is true, complete and not misleading .Neither any such fact nor the fact that an ex-emption or exception is available for a securityor a transaction means that the commissionerhas passed in any way upon the merits or quali-fications of, or recommended or given approvalto, any person, security or transaction .. It is un-lawful to make, or cause to be made, to anyprospective purchaser, customer or client anyrepresentation inconsistentt with the foregoing..

3846

books, papers, correspondence, memoranda,agreements or other documents or recordswhich the commissioner deems relevant or ma-terial to the inquiry Failure to obey a subpoe-na or give evidence may be dealt with in ac-cordance with s 885 . . 12..

(3) No person is excused from attending andtestifying or from producing any document orrecord before the commissioner, or in obedi-ence to the subpoena of the commissioner, orany officer designated by him, or in any pro-ceeding instituted by the commissioner, on theground that the testimony or evidence requiredof him may tend to incriminate him or subjecthim to a penalty or forfeiture; but no individu-al may be prosecuted or subjected to any pen-alty or forfeiture for or on account of anytransaction, matter or thing concerning whichhe is compelled, after °claiming his privilegeagainst self-incrimination, to testify or produceevidence, except that the individual testifyingis not exempt from prosecution and punish-ment f'or, perjury or contempt committed intestifying . .


liable to the person selling the security to him,who may sue either at law or in equity to re-cover the security, plus any income received bythe purchaser thereon, upon tender of the con-sideration received, or for damages if the pur-chaser no longer owns the security Damages,are the excess of ' the value of the security whenthe purchaser disposedd of it, plus interest atthe legal rate from the date of disposition, overthe consideration paid for the security lenderrequires only notice of willingness to pay theamount specified in exchange for the security..Any notice may be given by service as in civilactions or by certified mail to the last knownaddresss of the person liable .

(3) Any person who wilfully participates inany act or transaction in violation of s . 551 42shall be liable to any other person who pur -chases or sells any security at a p rice whichwas affected : by the act or transaction for thedamages sustained as a result of such act ortransaction.. Damages shall be the, differencebetween the price at which the otherr personpurchased or sold securities and the marketvalue which the securities would have had atthe time of his purchase or sale in the absenceof the act or transaction, plus interest at thelegal :rate .

(4) Every person who directly or indirectlycontrols a person liable under sub (1), (2) or(3), every partner, principal executive officer or,director of such person, every person occupy-ing a similar status or performing similar func-tions, every employe of such person who mate-rially aids in the act or transaction constitutingthe violation, and every broker-dealer or agentwho materially aids in the act or transactionconstituting the violation, are also liable jointlyand severally with and to the same extent assuch person, unless the person liable hereunderp roves. that he did not know, and in the exer-cise of reasonable care could not have known,of the. existence of the facts by reason of whichthe liability is alleged to exist . There is contri-bution as in eases : of contract among the sever-al persons so liable .

(5) No action shall be maintained under thissection unless commenced before the expira-tion of '3 years after the act or transaction con-stituting the violationn or the expiration of oneyear after the discovery of the factss constitut-ing the violation, whichever first expires, butthe time specified for commencing such actionshall be extended by reason of any fact and forthe time specified in ss 893 30 to 893 .. .38. . :

(6) (a) No purchaser may commence an ac- ,lion under, this section if, : beforee suit is com-menced, the purchaser, has received a written

or information may be returned under thischapter , mmore than 6 years after the alleged vi-olation .

(2) The commissioner may refer such evi-dence ' as is available concerning violations ofthis chapter or of ''any rule or order hereunderto the attorney general or the district attorneyof the appropriate county, who may, with orwithout any reference, institute the appropriatecriminal proceedings under this chapter. If re-feried to a district attorney, he shall within 90days file with the commissioner a statementconcerning any action taken ox, if no actionhas been taken, the reasons therefor .

(3) Nothing in this chapter limits the powerof the state to punish any person for any con-duct which constitutes a crime under any otherstatute .

551 .59 Civil liabilities. (1) Any personwho: a) offers or sells a security in violation ofs . 551 . 21 ; 551 31 or 551 . 55 or anyy rule relatingthereto, or any condition imposed under s551 . 26 or 551,27 or any order under this chap-ter of which he has notice ;: or b) offerss or sellsa security by means of any untrue statement ofa material fact or any omission to state a mate-rial fact necessary in order to make the state-ments made, ` in the light of the circumstancesunder which they are made, not misleading, thepurchaser not knowing of' the untruth or omis-sion, and who does not sustain the burden ofproof that he did not know and in the exerciseof' reasonable care could not have known of theuntruth or omission, shall be liable to the per-son purchasing the security from him, who maysue eitherr at law or in equity to recover theconsideration paid for the security, togetherwith'.h interest at the legal rate from the date ofpayment, less the amount of any income re-ceived on the security, upon the tender of thesecurity, or : for damages if he no longer ownsthe security . Damages are the amount thatwould be recoverable upon a tender less the val-ue of the security when the purchaser disposedof it and interest at the legal rate from the dateof disposition Tender shall require only noticeof willingness to exchange the security for theamount specified.. . Any notice may be given byservicee as in civil actions or by certified mailaddressed to the last known address of the per-son liable .

(2) Any person who purchases a security bymeans of any untrue statement of' a materialfactt or ' any omission to state a material factnecessary in order to make thee statementsmade, in the light of the circumstances under-which they were made, not misleading, shall be



(9) The rights and remedies under this chap-ter are in addition to any other rights or reme-dies that may exist at law or in equity .

551 .60 Miscellaneous powers of commis-sioner. (1) The commissioner may by rule ororder require any issuer of securities registeredunder this , chapter . or. . predecessor laws to dis-tribute specified financial information to itsshareholders at least annually .

(2) If the commissioner has reasonn to believethat any offer or sale of an unregistered securi-ty is or would be unfair, inequitable or fraudu-lent to purchasers, he mayy by order summarilyprohibit further offers or sales of ' such securityin this state until it is registered under thischapter _ If the commissioner has reason to be-lieve that any security is being offered or soldin this state by any unlicensed person in viola-tion of this chapter or any rule or ' order` here-under, he may by order , summarily prohibitsuch person from further ' offers or sales of se-curities in this state until he is licensed underthis chapter :

(3) If in his opinion : the public interestt andthe protection of investors so require, the com-missioner -' may by order summarily suspend alltrading in this state by broker-dealers andagents in any security for any period which hespecifies. . No broker-dealer or agent shall effectany transaction in, or induce or attempt to in-duce the purchase or sale of ; any security inthis state in which trading is so suspended, ex-cept ' in performance of a contract previouslyentered into At any time after the issuance ofan order under this subsection, any interestedperson may in writing request that the suspen-sion of trading be vacated . . . Upon the receipt ofa written - request, the matter shall be set downfor' hearing within : 15 days after such receipt .After ' the hearing, the commissioner may orderthe suspension to be. continued until modifiedor vacated by further, order : if he finds thattrading in the security willl be unfair ' or' inequi-table or will , tend .. to work a . fraud uponn thepurchasers or sellers of ` the security : Otherwise,he shall vacate the suspension of trading andno further- order may be entered under thissubsection with respect to the same security inthe absence :o f . changed circumstances justify-ing an order

(4) Every corporation, partnership ox ' associ-ation having its-principal office in this state orwhose securities have been registered under'this chapter or predecessor laws shall, within20 days after receipt of written request fromthe `commissioner made in connection with 'anyinvestigation under , s.. 551 . 56 (1), furnish him

offe r statingg the respect in which liability . un-dec this section may have arisen and fairly ad-vising the purchaser of' his rights; offering torepurchase the security for cash payable on de-livery of the security equal to the considerationpaid, together with interest at the legal rateefrom the date of payment, less the amount ofany income received thereon or, if the purchas-er no longer - ownss the security, offering to paythe. purchaser upon acceptance of' the offer anamount: in cash equal to the damages comput-ed in accordance with sub, (1) ; and stating thatthe offer may be accepted by the purchaser atany time within a specified period of not lessthan 30 days after the date of receipt thereofrorsuch shorter period as the commissioner mayby rule prescribe; and the purchaser has failedto accept suchh offer in writing within the speci-fied period .

(b) No seller may commence an action un-der this section if, before suit is commenced,the seller° hass received a written offer statingthe respect in which liability under this sectionmay have arisen and fairly advising the sellerof his rights; : offering to return the securityplus the amount of any income received there-on upon payment of the consideration re-ceived, or, if the purchaser no longer owns thesecurity, offering to pay the seller upon accept-ance of the offer an amount in cash equal tothe damages computed in accordance with sub .(2); and providing that the offer may be - ac-cepted by the seller at any time within a speci-fied period of not less than . 30 days after thedate of receipt thereof; and the seller has failedto accept the offer in writing within the speci-fied period .

(c) Offers shall be in the form and containthe information the commissioner by rule pre-~scribes. Every offer under this subsection shallbe delivered to the offerve or sent by certifiedmail addressed to him at his last , known ad-dress. If an offe r is nott performed in accord-ance :with 'its terms; suit by the offe iee underthis section shall be permitted withoutt regardto thiss subsection .

(7) No person who has made or engaged inthe performance of any contract in violation ofthis chapter or any ruleor order hereunder, orwho has acquired any purported right underany cont ract with knowledge of the facts byreason 'of which its making of performancewas in violation, may base any suit on the con-tract .

(8) Any condition, stipulation or provisionbinding any person acquiring any security towaive compliance with any provision of thischapter or . any rule ororder hereunder is is void,

5. 51 :59 . SECURITIES LAW 3848


with a list of all or part of itss security holdersas he requests, showing the amount of securi-ties held by each security holder and the dateof issuance of such securities and informationreasonably related thereto, signed by the presi-dent, secretaryy or partner of the issuer or aperson occupying a similar status or perform-ing similar functions .History: 1971 c . . 84,

551 .61 Hearings and judicial review. (1)Within 30 days after any order has become of-,fective without a hearing, any interested partymay file a written request with the commission-er- for'a hearing in respect to any matters deter-mined by' the order, and within 15 days afterthe filing of the request, the matter shall be setdown for hearing and notice given to all inter-ested parties.-After the hearing, the commis-sioner may affirm, vacate or modify the orderas he deems appropriate .

(2) Within 30 days after any order has be-come effective after a hearing, any interestedpasty may apply to the commissioner for a re-hearing The commissioner may grantt andhold a rehearing if in his judgment sufficientreasons therefor appear. After rehearing, thecommissioner may vacate or modify the order,and any order vacating or modifying the ocigi-nal order shall have the same effect as an origi-na l order . Failuree to grant- an application forrehearing within 30 days from the date of thefiling ..g shall constitute a denial ; and failure,within 15 days after the conclusion of a rehear-ing, to issue an order affirming, vacating ormodifying the original order shall constitute anaffirmation of the original older .

(3) Hearings and rehearings shall be publicunless the commissioner grants a requestjoined in by all parties that the hearing be con-ducted privately,

(4) Orders of the commissioner shall be sub-ject to judicial review under ch : 227 but ordersoriginally entered without a hearing may be re-viewed only ifthe party seeking review has re-quested ahearing : within the time provided bysub . : (1) .History: 1971 c.. 84:

551 .62 Stay of proceedin gs. (1) No in-junction shall issue in any proceeding under s .551:61 suspending or` staying any order of thecommissioner, except upon application to thecircuit court of the appropriate county, noticeof which shall be given to the commissioner andother, parties to the proceeding, and except afteropportunity forr hearing thereon. No injunctionsha ll issue in any other proceeding or, action, inany court, which shalll have the effect of delay-

ing or preventing any such order' from becom-ing effective, unless the parties to the proceed-ing before the commissioner are also patties tothe court proceedingg or action, and except afternotice and opportunity for hearing thereon .

(2) No injunction shall issue in any proceed-ing under s, 551,61 or in any other proceedingor action, in any court, suspending or stayingany order of' the commissioner or, having theeffect of delaying or, preventing any suchh orderfrom becoming effective, unless an undertakingis entered into on the part of the petitioner orplaintiff, with a surety and in the sum thecourt' or the presiding judge thereof' directs orapproves to the effect that the petitioner' or,plaintiff will pay all damages which any partysustains by the suspension or stay of the orderor the delayy or prevention of the order frombecoming effective, and to such other effect asthe court or judge directs, and no order orjudgment in any proceeding or' action shall bestayed on appeal therefrom unl ess a like under-taking is entered into by the petitioner ofplaintiff in addition to the undertaking under s ..274.11 (3) .

History: 197 1 c 84

551 .63 . Rules,, forms and orders . (1) Thecommissioner may make, amend and rescindany rules,, forms and orders that are necessaryto carry out this chapter', including rules andforms governing registration statements, app l i-cations and reports, and defining any terms,whether or not used in this chapter, insofar asthe definitions are not inconsistent with thischapter . . For the purpose of rules and for ms, theecommissioner may classify securities, personsand matters within his jurisdiction, and pre-sctibe"different requirements for different class-es Rules shall be made and published in ac-cordance with ch, 227 .

(2) No rule, form or order.r may be made,amended or rescinded unless the commissionerfinds that the actionn is necessary or appropri-ate in the public interest and for the protectionof',investors . In prescribing rules and forms thecommissioner may cooperatee with the securi-ties administrators of other states and the secu-rities and exchange commission with a view toachieving maximum uniformity in the formand content of registration statements, applica-tions and reports wherever practicable

(3) The commissioner, may by rule or, orderprescribe the form andd content of financialstatements required under this chapter', the cir-cumstances under' which consolidated financialstatements shalll be filed, and whether any re-quired financial statementss shall be certified by



tration or license which is then in effect.: Servicemay be made by leaving, a copy of the proces 's inthe office of the commissioner ' ; but it is not ef-fectiveunless the plaintiff, ' who may ' be thecommissioner in a suit, action or' proceeding in-stituted by him, promptly sends notice of theservice and a " copy of the process by registeredor certified mail to the defendant or respondentat his last address on file with the commission-er, and . the plaintiff's affidavit of compliancewith this subsection is filed in the case on orbefore the return day of the process, or w i thinsuch time as the court allows,

(2) When any person, including any nonresi-dent of this state; engages in conduct prohibit-ed or made actionable by this chapter or anyrule or 'order, hereunder , and he has not filed aconsent to service of process under sub . (1)and personal jurisdiction over him cannot oth-erwise be obtained in this state-, that conductshall be considered equivalent to his appoint-

tment of the commissioner to be his attorney toreceiveservice of any lawful process in anynoncriminal suit, action or proceeding againsthim or his successor, executor or- administratorwhich arisesout of that conduct and which isbrought under this chapter or Any rule or or-der hereunder, with the same validity ass if'served on `him personally . Service may be madeby leaving ; a copy of the process in the office ofthe commissioner, but it is riot effective unlessthe plaintiff, may be the, commissioner ina suit, action or , proceeding instituted by him,promptly sends notice of the service and acopy of the process by registered or certifiedmail to the defendant or respondent at his ; lastknown address or , takes other steps which arereasonably calculated to give actual notice ; andthe plaintiff's affidavit of compliance with thissubsection is filed in the case on or before ther eturn day~of the process or,~ within such timeas the court allows(3) When, process is se xed under this sec-

tion the court, "or' . the commissioner in a , pro-ceeding before him, shall order such continu-ance as is necessary to afford the defendant orrespondent reasonable opportunity to defend,.

551 .66 - Scope of chapter, (1) The - ;provi-sions of this, chapter concerning sales, and offersto sell apply when a sale or offer to sell is madein this state or, when an offer to purchase ismade and accepted; in this , state . The provisionsconcerning purchases : and offers to purchaseapply when a purchase .e or offer to purchase ismade in this state or an offer to . sell is made andaccepted in - this state . .`-

independen t or certified public accountants ..All financial statements shall'' be prepared : inaccordance with generally accepted accountingpractices unless otherwise permitted by rule ororder .

(4) No provision of this chapter imposingany liability applies to any act done or omittedin good faith in conformity with any rule, formor order of the commissioner, notwithstandingthat the rule ; form or order may later- beamended-or rescinded or be determined to beinvalid for any reason .

551 .64 Administrative files and opinions.(1) A document is filed when it is received bythe commissioner .

(2) The commissioner shall keep a register ofall, licenses and registration statements whichare or, have ever, been effective under. this chap-ter and predecessor laws and all denial, sus-pension or revocation orders which have beenentered ;under this chapter; and predecessorlaws. The register shall be open fox' public in-spection

(3) The information contained in or filedwith any registration statement, application orreport shall be made available to the public inaccordance with rules prescribed by the com=missionei

(4)' The commissioner .' upon request shallfurnish to any person at a reasonable chargephotostatic or other copies, certified under hisseal of office ;"if certification is requested, ofany entry in the register or any order' or ocher,document on file in his office Any copy socertified is admissible in 'evidence- under s ..889,1$ .

(5) The commissioner, mmay honor . requestsfrom interested persons for interpretative opin-ions, .

551 .65 ` Service ` of process. (1) Every ap-plicant for license of registration under thischapter and every issuer which proposes to of-fer, a security in this state through any personacting as agent shall file with the commissioner,in such form as he by rule prescribes, an irrevo-cable consent 'appointing the commissioner orhis successor' in office to lae" his attorney to re-ceive service of any lawful process in any non-criminal suit, action or proceeding against himor his successor ;' executor, or administrator,which arises under this chapter or any rule ororder hereundei after- the consent has beenfiled, with the same validity as if served person-ally on the' person' filing the consent .. The con-sent:-.need not be filed by a per son who has fileda consent in connection with a previous regis-

551 .63 SECURITIES LAW 3850


3851 SECURITIES LAW 551.69

(2) For the purpose of this section, an offer to coordinate the interpretation and administra-to sell or to purchase is made in this state, tion of this chapter withh related federal regula-whether or not either party is then present in tion,this state, when the offer originates from thisstate or is directed by the offer-or- to this state 551 .68 Saving prov isions. (1) Chapter 189,and received by the offetee in this state, but for ` 1967 Stats,, exclusively governs all suits, ac-the purpose of s . 551,21, an offer to sell which tions, prosecutions or proceedings which areis not directed to or received by the offeree in pending or, may be initiated on the basis of factsthis state is not made in this state, or circumstances occurring before January 1,

(3) For the purpose of this section, an offer 1970 .0to purchase or to sell is acceptedd in this state (2) All orders effecting registration or licens-when acceptance is communicated to the offering under ch . 189, 1967 Stats ., all administra-or in this state, and has not previously been tive orders relating to such registrations or li-communicated to the offeror, orally or in writ- censes and all conditions imposedd uponn suching, outsidee this state; and acceptance is com.- registrations of licenses shall remain : in effectmunicated to the offeror in this state, whether for one year after January 1, 1970, or until theor not either party is then present in this state,, expiration dates of the orders, whichever' firstwhen the offeree directs it to the offeror in this occurs,state reasonably believing thee offeror to be in (3) Chapter' 189, 1967 Stats, appliess in re-this state and . it is received by the offeror in spect to any offer or sale of a security madethis state.. within one year after January 1, 1970, pursu=

(4) An offer to . sell or to purchase is not ant to an offering begun in good faith beforee itsmade in this state when the publisher cir-cu- effective date on the basis of an exemptionlates or there is circulated on his behalf in this available thereunder :state any 'bona fide newspaper or other, publi- (4) Judicial review of all administrative or-cation of general, regular and paid circulation ders as to which review proceedings have notwhich is not published in this state ; or a'radio been instituted by the effective date of this Ior television program originating outsidethis chapter "are governed by s . 551 .61, except thatstate is received in this state no review proceeding may be instituted unless

xistoYy: i97i'c sa: the petition is filed within any period of limita-tion'' which applied to ' a review proceeding

551 .62 Statutory policy. This chapter shall when the order was entered,be so construed as to effectuate its general pur-pose to make uniform the law of those states 551 .69 Effective date. This chapter shallwhich enact the "Uniform Securties .Act" and take effect on January 1, 1970 .

y

r.ri

a1

- ;~


Documents

Securities Regulation. - docs.legis.wisconsin.gov · in securities for the account of others or for his (2) ... (9) "Nonissuer" means ... this chater or the security of transaction