¶29 The State was required to prove three elements beyond a reasonable doubt to convict LaCount of securities fraud. First, the prosecution had to establish that LaCount sold Wills a security, here, an investment contract. Wis. Stat. § 551.41. Second, the prosecution had to prove that LaCount made an “untrue statement of a material fact or [omitted] to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they [were] made, not misleading . . . .” Wis. Stat. § 551.41(2). Third, the prosecution was required to prove that LaCount acted willfully. Wis. Stat. § 551.41. …
¶30 We are satisfied that the State proved beyond a reasonable doubt that LaCount sold Wills a security, here, an investment contract. We are not persuaded by LaCount’s argument, which relied on the United States Supreme Court decision of SEC v. Edwards, 540 U.S. 389, 393 (2004), that Wills had to depend solely on LaCount’s efforts to realize a profit for the transaction to be an investment contract. In Edwards, the Court defined an investment contract for purposes of federal securities law. Id. LaCount’s argument fails because Wisconsin securities law is far broader in its definition of an investment contract than is federal law. Wisconsin courts have held that managerial efforts need not come only from the efforts of a person other than the investor. See Fore Way Express, Inc. v. Bast, 178 Wis. 2d 693, 505 N.W.2d 408 (Ct. App. 1993). Specifically, Fore Way Expresscited the relevant section of the Wisconsin Administrative Code in holding that an investment contract was any “‘investment in a common enterprise with the expectation of profit to be derived through the essential managerial efforts of someone other than the investor.'” Id. at 712, citing Wis. Admin. Code § DFI 1.02(6)(a) (Dec. 2004).
¶31 We agree with the Fore Way Express court that an investor may have a role in the managerial efforts of an investment contract, so long as the investor does not provide the essential managerial efforts for the investment contract. Our holding today also is consistent with the Wisconsin Administrative Code, which defines an investment contract as “[a]ny investment in a common enterprise with the expectation of profit to be derived through the essential managerial efforts of someone other than the investor.” Wis. Admin. Code § DFI 1.02(6)(a) (Dec. 2004). The judge’s instructions to the jury in this case, as reflected in the record, were fully consistent with Wisconsin law. Furthermore, we are satisfied that Cohen’s testimony was consistent with Wisconsin law.