Securities and Exchange Commission of Wisconsin

Securities and Exchange Commission of Wisconsin
Name	Securities and Exchange Commission of Wisconsin
Formed	1913
Jurisdiction	Wisconsin
Headquarters	Madison, Wisconsin
Chief1 position	Administrator
Parent department	Wisconsin Department of Financial Institutions

Securities and Exchange Commission of Wisconsin

The Securities and Exchange Commission of Wisconsin is a state regulatory agency responsible for administering and enforcing securities law within Wisconsin. It operates alongside federal bodies such as the Securities and Exchange Commission and coordinates with agencies including the Financial Industry Regulatory Authority, Commodity Futures Trading Commission, and Federal Reserve System. The agency interacts with market actors like broker-dealers, investment advisers, mutual funds, and hedge funds, and engages with institutions including the Wisconsin Legislature, Office of the Governor of Wisconsin, and Wisconsin Supreme Court.

History

The agency traces its roots to early 20th-century reforms following events like the Panic of 1907 and the passage of the Securities Act of 1933 and the Securities Exchange Act of 1934, which spurred state-level counterparts such as the commission. Its formation intersected with actions by figures and institutions such as Robert M. La Follette Sr., the Progressive Era, and the Wisconsin Legislature's regulatory initiatives. Throughout the 20th century the agency adapted to national developments, referencing federal rulings from the United States Supreme Court, decisions involving John Marshall Harlan II, and standards set by the National Association of Securities Dealers, later Financial Industry Regulatory Authority. During periods of crisis like the Savings and Loan crisis and the 2007–2008 financial crisis, the commission revised rules in response to federal reforms including the Dodd–Frank Wall Street Reform and Consumer Protection Act. The commission has coordinated enforcement with state counterparts such as the California Department of Financial Protection and Innovation, New York Department of Financial Services, and the Texas State Securities Board.

Organization and Structure

The commission sits within the administrative framework associated with the Wisconsin Department of Financial Institutions and reports to statewide authorities comparable to the Office of the Governor of Wisconsin and legislative oversight committees in the Wisconsin Legislature. Its leadership model mirrors structures found in agencies like the Securities and Exchange Commission and comprises divisions akin to the Division of Enforcement and Division of Investment Management. Staffing includes examiners, investigators, and counsel similar to personnel at the Commodity Futures Trading Commission, Consumer Financial Protection Bureau, and state attorneys general offices such as the Wisconsin Attorney General. The commission liaises with regional networks including the North American Securities Administrators Association and participates in multistate actions coordinated with entities like the Multistate Tax Commission and the National Association of Attorneys General.

Functions and Authority

The commission administers statutes equivalent to the Uniform Securities Act as adopted by state legislatures and enforces provisions on registration, anti-fraud, and disclosure parallel to federal statutes like the Investment Advisers Act of 1940. It licenses and registers market participants including broker-dealers, investment advisers, registered representatives, and entities issuing municipal bonds or corporate bonds. The commission conducts examinations similar to inspections by the Public Company Accounting Oversight Board and issues cease-and-desist orders comparable to actions by the Federal Trade Commission. It exercises administrative adjudicative powers potentially reviewed by courts such as the United States Court of Appeals for the Seventh Circuit and the Wisconsin Supreme Court. The commission enforces recordkeeping and reporting obligations related to filings with the Internal Revenue Service and coordinates with the Department of Justice for criminal referrals.

Regulation and Enforcement Actions

Enforcement activities mirror high-profile actions seen at the federal level, involving investigations into alleged violations akin to cases against entities like Enron Corporation, WorldCom, and Bernie Madoff-style schemes. The commission has brought administrative and civil actions concerning fraudulent offerings, unregistered securities, and improper advice involving instruments such as put options, call options, and asset-backed securities. It has collaborated on multistate settlements with groups connected to matters like painted shares controversies, compliance failures comparable to cases against Lehman Brothers, and disclosure lapses reminiscent of HealthSouth Corporation filings. The agency uses tools including market surveillance, forensic accounting akin to work by the Public Company Accounting Oversight Board, and investigative subpoenas comparable to those issued by the Federal Bureau of Investigation.

Licensees and Market Participants

Licensed entities overseen include broker-dealers analogous to firms such as Merrill Lynch, Morgan Stanley, and Goldman Sachs at the national level, though operating in-state through regional offices; investment advisers similar to Edward Jones, Charles Schwab, and Fidelity Investments; and issuers of securities including corporations like Kohl's Corporation and Exact Sciences that have had presence in the region. The commission regulates activities of market professionals trained at institutions such as University of Wisconsin–Madison and who may hold credentials from bodies like the Financial Industry Regulatory Authority and the Certified Financial Planner Board of Standards. It also interacts with intermediaries including clearinghouses like Depository Trust & Clearing Corporation and payment systems such as those overseen by the Federal Reserve Bank of Chicago.

Criticisms and Controversies

Critiques mirror debates seen in state regulatory circles such as questions of resource constraints raised in contexts like the 2008 financial crisis and critiques of regulatory capture discussed in relation to figures like Joseph Stiglitz and Paul Krugman. Scholars comparing state enforcement, including those at Harvard Law School and Yale Law School, have debated efficacy, timeliness, and coordination with federal agencies such as the Securities and Exchange Commission and Commodity Futures Trading Commission. Controversies have involved settlement practices similar to those scrutinized in cases involving Wall Street firms, transparency issues paralleling debates around the Freedom of Information Act, and conflicts examined in academic journals from institutions like the Brookings Institution and the American Enterprise Institute.

Category:State securities regulators of the United States