Wisconsin Statutes 196.525 – Loans to officers or directors and loans to and investments in securities of holding companies; penalty
Current as of: 2023 | Check for updates
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Terms Used In Wisconsin Statutes 196.525
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commission: means the public service commission. See Wisconsin Statutes 196.01
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Following: when used by way of reference to any statute section, means the section next following that in which the reference is made. See Wisconsin Statutes 990.01
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Officers: when applied to corporations include directors and trustees. See Wisconsin Statutes 990.01
- Public utility: includes all of the following:
1. See Wisconsin Statutes 196.01Telecommunications utility: means any person, corporation, company, cooperative, unincorporated cooperative association, partnership, association and lessees, trustees or receivers appointed by any court that owns, operates, manages or controls any plant or equipment used to furnish telecommunications services within the state directly or indirectly to the public. See Wisconsin Statutes 196.01
(1) Except under rules prescribed by the commission, a public utility may not lend funds or credit to any of its officers or directors by any of the following and a public utility other than a telecommunications utility may not lend funds or credit to any corporation, except a public utility subject to the regulatory powers of the commission, if the corporation holds, directly or indirectly through any chain of ownership, 5 percent or more of the voting stock of the public utility or renders any managerial, supervising, engineering, legal, accounting or financial service to the public utility by any of the following:
(a) Becoming surety, guarantor or endorser upon any obligations, contingent or otherwise, of the officer, director or corporation.
(b) Loaning funds, securities or other like assets to the officer, director or corporation.
(c) Purchasing in the open market, or otherwise, any obligation upon which the officer, director or corporation may be liable solely or jointly with others.
(2) Any contract made in violation of this section shall be void and subject to cancellation and recoupment by action at law. If a contract is made contrary to the provisions of this section, the commission, after notice and hearing, may order the public utility to take steps within 30 days to recover the funds or assets thus illegally loaned or transferred by action at law or other proceedings which will effectively release the public utility from the contract as surety, guarantor or endorser.
(3) Any director, treasurer or other officer or agent of a public utility who makes or votes to authorize a transaction in violation of this section may be fined not more than $10,000.
(4) The provisions of this section shall extend to the renewal or extension of existing contracts.