Wisconsin Enacts Securities Law that Toughens Penalties for Violations By Investment Advisors Against Seniors

May 18, 2010

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Wisconsin has enacted a law which enhances the penalties for violations of the Wisconsin Securities Act if the violations occur against an individual who is 65 years of age or older.  The Wisconsin Securities Act prohibits various forms of fraud in connection with the sale or offering of securities or any other securities transactions.  Specifically, registered investment advisors, as well as broker dealers, are prohibited form engaging in fraud or employing manipulative, deceptive, or fraudulent devices.

Under the prior Wisconsin law, a violation of the Securities Act could subject an individual to both criminal and civil liability.  A violation could lead to a Class H felony conviction which was punishable by a maximum fine of $10,000 and a maximum prison sentence of six years.  In a civil proceeding, a violator could face a civil penalty of a fine up to $5000 for a single violation and up to $250,000 for multiple violations.  Along with this fine, a civil judgment could include payments for restitution, the disgorgement of profits, and the payment of interest.

The new Wisconsin law, which became effective May 6, 2010, nearly doubles the penalty for the violations of the state’s securities laws if the crime is committed against an individual who is 65 years of age or older.  For criminal offenses, the fine will be increased from a maximum of $10,000 to a maximum of $15,000 and the prison sentence may be increased from up to 5 years to a maximum sentence of 10 years.  In a civil proceeding, the court may impose a $10,000 fine for a single violation and a fine up to $500,000 for multiple violations.  In both criminal and civil actions, the fact the defendant was unaware of the age of the victim is not a defense against the enhanced penalties.  By enacting the penalty enhancer, Wisconsin joins a group of over a dozen states who have enacted similar penalties for securities crimes against senior citizens.

Posted by Bryan Hill
Labels: Criminal, Seniors