Hudson’s untrue statements to persons to get them to invest in his country music career provided a factual basis for his plea to two violations of ch. 551’s prohibition against making untrue statements of material fact in connection with the sale of a “security” because his conduct involved “securities.” A security includes an “investment contract,” which under § 551.102(28)(d)1. is essentially an investment in a common enterprise managed by someone other than the investor, and doesn’t have to be reduced to writing, State v. Johnson, 2002 WI App 224, ¶11, 257 Wis. 2d 736, 652 N.W.2d 642. (¶¶14-19). (The briefs in State v. LaCount, 2008 WI 59, 310 Wis. 2d 85, 750 N.W.2d 780, also state the investment contract at issue there was not reduced to writing. (¶17).) “Not requiring a writing is, of course, fully consistent with the general principle that contracts may be either oral or written. Thus, … the current version of the applicable statute, Wis. Stat. § 551.102(28)(a) declares specifically that ‘security’ ‘[i]ncludes … an uncertificated security.’” (¶17).
Further, the prosecutor’s erroneous reference at the plea hearing to the definition of “investment contract” given in a now-repealed Administrative Code provision did not render Hudson’s plea invalid by providing an incorrect definition of “security.” The erroneous reference, which also occurs in a footnote to (but not the text of) the applicable jury instruction, JI-2904, didn’t make the substance of the definition wrong, for the Administrative Code language was incorporated into the statute during a revision of ch. 551 that took effect in 2009. (¶¶20-21). (Moreover, one of the two counts Hudson pled to occurred while the Administrative Code was still applicable. (¶¶3, 5, 8, 15).)
Finally, Hudson was not entitled to an evidentiary hearing on his claim that his trial lawyer failed properly to advise him about the meaning of “investment contract” or “security” because the allegations in his postconviction motion did not establish trial counsel gave him incorrect advice. Indeed, given that the allegations in the complaint clearly provide a basis for finding the offenses were committed, his lawyer’s advice–that avoiding a conviction would require the jury to doubt the veracity of his accusers–“was not wrong, and was hardly deficient.” (¶¶22-25).