United States Court of Appeals For the Seventh Circuit Wisconsin
Consumer Protection — broker licenses
A real estate broker’s license is not required to negotiate the sale of all the stock in a closely held business.
“The statute was amended after the Bertha decision, moreover, and it is the amended statute that applies to this case. The provision on which the court focused in Bertha, see 414 F. Supp. 2d at 874, 877, was not section 452.01(2)(a), quoted above, but section 452.01(2)(d), which defines (or, rather, defined) ‘broker’ as someone who ‘negotiate[s] a sale . . . of any business, its goodwill, inventory, fixtures or an interest therein.’ That section has been deleted, while section 452.01(2)(a), which further defined a broker to include one who ‘negotiate[s] a sale . . . of an interest or estate in real estate,’ now reads, as we know, ‘negotiate[s] a sale . . . of . . . an interest or estate in real estate, a time share, or a business or its goodwill, inventory, or fixtures, whether or not the business includes real property.’ The words we’ve italicized are the key to the plaintiff’s argument; one who owns stock in a corporation, he argues, owns ‘an interest’ in a business and therefore anyone who negotiates a sale of stock requires a license.”
“This can’t be right, because it would require every securities broker in Wisconsin to have a real estate broker’s license as well as a securities license, which securities brokers are already required to have. Wis. Stat. § 551.401(1). We don’t know whether Latek has a securities license, and it doesn’t matter; the plaintiff doesn’t argue that it matters and probably Latek is exempt from having to have one because it was brokering a deal involving the issuer of the securities that were sold (Karl’s Rental Center), and such brokering is exempt. Wis. Stat. § 551.401(2)(a).”
Appeal from the United States District Court for the Eastern District of Wisconsin, Adelman, J., Posner, J.