Public Act 099-0182
 
HB3429 EnrolledLRB099 04381 JLS 29575 b

    AN ACT concerning business.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Securities Law of 1953 is amended
by changing Sections 4, 8, 11, 11a, 12, 13, and 18.1 and by
adding Sections 2.34, 2.35, 2.36, and 8d as follows:
 
    (815 ILCS 5/2.34 new)
    Sec. 2.34. Accredited investor. "Accredited investor" has
the meaning given to that term in 17 CFR 230.501(a), as amended
and in effect from time to time.
 
    (815 ILCS 5/2.35 new)
    Sec. 2.35. Qualified escrowee. "Qualified escrowee" means
a person, firm, partnership, association, corporation, or
other legal entity who: (a) falls under the definition of
"title insurance company" under, and pursuant to the terms and
requirements of, the Title Insurance Act; (b) is certified as
an independent escrowee under, and pursuant to the terms and
requirements of, the Title Insurance Act; or (c) is a bank,
regulated trust company, savings bank, savings and loan
association, or credit union which is authorized to do business
in the State and which maintains at least one physical business
location within the State.
 
    (815 ILCS 5/2.36 new)
    Sec. 2.36. Registered Internet portal. "Registered
Internet portal" means an Internet portal maintained by a
corporation or other legal entity that is being used to offer
or sell securities and that meets the requirements of Section
8d of this Act.
 
    (815 ILCS 5/4)  (from Ch. 121 1/2, par. 137.4)
    Sec. 4. Exempt transactions. The provisions of Sections 2a,
5, 6 and 7 of this Act shall not apply to any of the following
transactions, except where otherwise specified in this Section
4:
    A. Any offer or sale, whether through a dealer or
otherwise, of securities by a person who is not an issuer,
underwriter, dealer or controlling person in respect of such
securities, and who, being the bona fide owner of such
securities, disposes thereof for his or her own account;
provided, that such offer or sale is not made directly or
indirectly for the benefit of the issuer or of an underwriter
or controlling person.
    B. Any offer, sale, issuance or exchange of securities of
the issuer to or with security holders of the issuer except to
or with persons who are security holders solely by reason of
holding transferable warrants, transferable options, or
similar transferable rights of the issuer, if no commission or
other remuneration is paid or given directly or indirectly for
or on account of the procuring or soliciting of such sale or
exchange (other than a fee paid to underwriters based on their
undertaking to purchase any securities not purchased by
security holders in connection with such sale or exchange).
    C. Any offer, sale or issuance of securities to any
corporation, bank, savings bank, savings institution, savings
and loan association, trust company, insurance company,
building and loan association, or dealer; to a pension fund,
pension trust, or employees' profit sharing trust, other
financial institution or institutional investor, any
government or political subdivision or instrumentality
thereof, whether the purchaser is acting for itself or in some
fiduciary capacity; to any partnership or other association
engaged as a substantial part of its business or operations in
purchasing or holding securities; to any trust in respect of
which a bank or trust company is trustee or co-trustee; to any
entity in which at least 90% of the equity is owned by persons
described under subsection C, H, or S of this Section 4; to any
employee benefit plan within the meaning of Title I of the
Federal ERISA Act if (i) the investment decision is made by a
plan fiduciary as defined in Section 3(21) of the Federal ERISA
Act and such plan fiduciary is either a bank, savings and loan
association, insurance company, registered investment adviser
or an investment adviser registered under the Federal 1940
Investment Advisers Act, or (ii) the plan has total assets in
excess of $5,000,000, or (iii) in the case of a self-directed
plan, investment decisions are made solely by persons that are
described under subsection C, D, H or S of this Section 4; to
any plan established and maintained by, and for the benefit of
the employees of, any state or political subdivision or agency
or instrumentality thereof if such plan has total assets in
excess of $5,000,000; or to any organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, any
Massachusetts or similar business trust, or any partnership, if
such organization, trust, or partnership has total assets in
excess of $5,000,000.
    D. The Secretary of State is granted authority to create by
rule or regulation a limited offering transactional exemption
that furthers the objectives of compatibility with federal
exemptions and uniformity among the states. The Secretary of
State shall prescribe by rule or regulation the amount of the
fee for filing any report required under this subsection, but
the fee shall not be less than the minimum amount nor more than
the maximum amount established under Section 11a of this Act
and shall not be returnable in any event.
    E. Any offer or sale of securities by an executor,
administrator, guardian, receiver or trustee in insolvency or
bankruptcy, or at any judicial sale, or at a public sale by
auction held at an advertised time and place, or the offer or
sale of securities in good faith and not for the purpose of
avoiding the provisions of this Act by a pledgee of securities
pledged for a bona fide debt.
    F. Any offer or sale by a registered dealer, either as
principal or agent, of any securities (except face amount
certificate contracts and investment fund shares) at a price
reasonably related to the current market price of such
securities, provided:
        (1) (a) the securities are issued and outstanding;
            (b) the issuer is required to file reports pursuant
        to Section 13 or Section 15(d) of the Federal 1934 Act
        and has been subject to such requirements during the 90
        day period immediately preceding the date of the offer
        or sale, or is an issuer of a security covered by
        Section 12(g)(2)(B) or (G) of the Federal 1934 Act;
            (c) the dealer has a reasonable basis for believing
        that the issuer is current in filing the reports
        required to be filed at regular intervals pursuant to
        the provisions of Section 13 or Section 15(d), as the
        case may be, of the Federal 1934 Act, or in the case of
        insurance companies exempted from Section 12(g) of the
        Federal 1934 Act by subparagraph 12(g)(2)(G) thereof,
        the annual statement referred to in Section
        12(g)(2)(G)(i) of the Federal 1934 Act; and
            (d) the dealer has in its records, and makes
        reasonably available upon request to any person
        expressing an interest in a proposed transaction in the
        securities, the issuer's most recent annual report
        filed pursuant to Section 13 or 15(d), as the case may
        be, of the Federal 1934 Act or the annual statement in
        the case of an insurance company exempted from Section
        12(g) of the Federal 1934 Act by subparagraph
        12(g)(2)(G) thereof, together with any other reports
        required to be filed at regular intervals under the
        Federal 1934 Act by the issuer after such annual report
        or annual statement; provided that the making
        available of such reports pursuant to this
        subparagraph, unless otherwise represented, shall not
        constitute a representation by the dealer that the
        information is true and correct, but shall constitute a
        representation by the dealer that the information is
        reasonably current; or
        (2) (a) prior to any offer or sale, an application for
        the authorization thereof and a report as set forth
        under sub-paragraph (d) of this paragraph (2) has been
        filed by any registered dealer with and approved by the
        Secretary of State pursuant to such rules and
        regulations as the Secretary of State may prescribe;
            (b) the Secretary of State shall have the power by
        order to refuse to approve any application or report
        filed pursuant to this paragraph (2) if
                (i) the application or report does not comply
            with the provisions of this paragraph (2), or
                (ii) the offer or sale of such securities would
            work or tend to work a fraud or deceit, or
                (iii) the issuer or the applicant has violated
            any of the provisions of this Act;
            (c) each application and report filed pursuant to
        this paragraph (2) shall be accompanied by a filing fee
        and an examination fee in the amount established
        pursuant to Section 11a of this Act, which shall not be
        returnable in any event;
            (d) there shall be submitted to the Secretary of
        State no later than 120 days following the end of the
        issuer's fiscal year, each year during the period of
        the authorization, one copy of a report which shall
        contain a balance sheet and income statement prepared
        as of the issuer's most recent fiscal year end
        certified by an independent certified public
        accountant, together with such current information
        concerning the securities and the issuer thereof as the
        Secretary of State may prescribe by rule or regulation
        or order;
            (e) prior to any offer or sale of securities under
        the provisions of this paragraph (2), each registered
        dealer participating in the offer or sale of such
        securities shall provide upon request of prospective
        purchasers of such securities a copy of the most recent
        report required under the provisions of sub-paragraph
        (d) of this paragraph (2);
            (f) approval of an application filed pursuant to
        this paragraph (2) of subsection F shall expire 5 years
        after the date of the granting of the approval, unless
        said approval is sooner terminated by (1) suspension or
        revocation by the Secretary of State in the same manner
        as is provided for in subsections E, F and G of Section
        11 of this Act, or (2) the applicant filing with the
        Secretary of State an affidavit to the effect that (i)
        the subject securities have become exempt under
        Section 3 of this Act or (ii) the applicant no longer
        is capable of acting as the applicant and stating the
        reasons therefor or (iii) the applicant no longer
        desires to act as the applicant. In the event of the
        filing of an affidavit under either preceding
        sub-division (ii) or (iii) the Secretary of State may
        authorize a substitution of applicant upon the new
        applicant executing the application as originally
        filed. However, the aforementioned substituted
        execution shall have no effect upon the previously
        determined date of expiration of approval of the
        application. Notwithstanding the provisions of this
        subparagraph (f), approvals granted under this
        paragraph (2) of subsection F prior to the effective
        date of this Act shall be governed by the provisions of
        this Act in effect on such date of approval; and
            (g) no person shall be considered to have violated
        Section 5 of this Act by reason of any offer or sale
        effected in reliance upon an approval granted under
        this paragraph (2) after a termination thereof under
        the foregoing subparagraph (f) if official notice of
        such termination has not been circulated generally to
        dealers by the Secretary of State and if such person
        sustains the burden of proof that he or she did not
        know, and in the exercise of reasonable care, could not
        have known, of the termination; or
        (3) the securities, or securities of the same class,
    are the subject of an existing registration under Section 5
    of this Act.
    The exemption provided in this subsection F shall apply
only if the offer or sale is made in good faith and not for the
purpose of avoiding any of the provisions of this Act, and only
if the offer or sale is not made for the direct or indirect
benefit of the issuer of the securities, or the controlling
person in respect of such issuer.
    G. (1) Any offer, sale or issuance of a security, whether
    to residents or to non-residents of this State, where:
            (a) all sales of such security to residents of this
        State (including the most recent such sale) within the
        immediately preceding 12-month period have been made
        to not more than 35 persons or have involved an
        aggregate sales price of not more than $1,000,000;
            (b) such security is not offered or sold by means
        of any general advertising or general solicitation in
        this State; and
            (c) no commission, discount, or other remuneration
        exceeding 20% of the sale price of such security, if
        sold to a resident of this State, is paid or given
        directly or indirectly for or on account of such sales.
        (2) In computing the number of resident purchasers or
    the aggregate sales price under paragraph (1) (a) above,
    there shall be excluded any purchaser or dollar amount of
    sales price, as the case may be, with respect to any
    security which at the time of its sale was exempt under
    Section 3 or was registered under Section 5, 6 or 7 or was
    sold in a transaction exempt under other subsections of
    this Section 4.
        (3) A prospectus or preliminary prospectus with
    respect to a security for which a registration statement is
    pending or effective under the Federal 1933 Act shall not
    be deemed to constitute general advertising or general
    solicitation in this State as such terms are used in
    paragraph (1) (b) above, provided that such prospectus or
    preliminary prospectus has not been sent or otherwise
    delivered to more than 150 residents of this State.
        (4) The Secretary of State shall by rule or regulation
    require the filing of a report or reports of sales made in
    reliance upon the exemption provided by this subsection G
    and prescribe the form of such report and the time within
    which such report shall be filed. Such report shall set
    forth the name and address of the issuer and of the
    controlling person, if the sale was for the direct or
    indirect benefit of such person, and any other information
    deemed necessary by the Secretary of State to enforce
    compliance with this subsection G. The Secretary of State
    shall prescribe by rule or regulation the amount of the fee
    for filing any such report, established pursuant to Section
    11a of this Act, which shall not be returnable in any
    event. The Secretary of State may impose, in such cases as
    he or she may deem appropriate, a penalty for failure to
    file any such report in a timely manner, but no such
    penalty shall exceed an amount equal to five times the
    filing fee. The contents of any such report or portion
    thereof may be deemed confidential by the Secretary of
    State by rule or order and if so deemed shall not be
    disclosed to the public except by order of court or in
    court proceedings. The failure to file any such report
    shall not affect the availability of such exemption, but
    such failure to file any such report shall constitute a
    violation of subsection D of Section 12 of this Act,
    subject to the penalties enumerated in Section 14 of this
    Act. The civil remedies provided for in subsection A of
    Section 13 of this Act and the civil remedies of rescission
    and appointment of a receiver, conservator, ancillary
    receiver or ancillary conservator provided for in
    subsection F of Section 13 of this Act shall not be
    available against any person by reason of the failure to
    file any such report or on account of the contents of any
    such report.
    H. Any offer, sale or issuance of a security to an
accredited investor provided that such security is not offered
or sold by means of any general advertising or general
solicitation, except as otherwise permitted in this Act. (1)
any natural person who has, or is reasonably believed by the
person relying upon this subsection H to have, a net worth or
joint net worth with that person's spouse, at the time of the
offer, sale or issuance, in excess of $1,000,000 excluding the
value of a principal residence, or (2) any natural person who
had, or is reasonably believed by the person relying upon this
subsection H to have had, an income or joint income with that
person's spouse, in excess of $200,000 in each of the two most
recent years and who reasonably expects, or is reasonably
expected to have, an income in excess of $200,000 in the
current year, or (3) any person that is not a natural person
and in which at least 90% of the equity interest is owned by
persons who meet either of the tests set forth in clauses (1)
or (2) of this subsection H; provided that such security is not
offered or sold by means of any general advertising or general
solicitation in this State.
    I. Any offer, sale or issuance of securities to or for the
benefit of security holders of any person incident to a vote by
such security holders pursuant to such person's organizational
document or any applicable statute of the jurisdiction of such
person's organization, on a merger, consolidation,
reclassification of securities, or sale or transfer of assets
in consideration of or exchange for securities of the same or
another person.
    J. Any offer, sale or issuance of securities in exchange
for one or more outstanding securities, claims or property
interests, or partly in such exchange and partly for cash,
where such offer, sale or issuance is incident to a
reorganization, recapitalization, readjustment, composition or
settlement of a claim, as approved by a court of competent
jurisdiction of the United States, or any state.
    K. Any offer, sale or issuance of securities for patronage,
or as patronage refunds, or in connection with marketing
agreements by cooperative associations organized exclusively
for agricultural, producer, marketing, purchasing, or consumer
purposes; and the sale of subscriptions for or shares of stock
of cooperative associations organized exclusively for
agricultural, producer, marketing, purchasing, or consumer
purposes, if no commission or other remuneration is paid or
given directly or indirectly for or on account of such
subscription, sale or resale, and if any person does not own
beneficially more than 5% of the aggregate amount of issued and
outstanding capital stock of such cooperative association.
    L. Offers for sale or solicitations of offers to buy (but
not the acceptance thereof), of securities which are the
subject of a pending registration statement filed under the
Federal 1933 Act and which are the subject of a pending
application for registration under this Act.
    M. Any offer or sale of preorganization subscriptions for
any securities prior to the incorporation, organization or
formation of any issuer under the laws of the United States, or
any state, or the issuance by such issuer, after its
incorporation, organization or formation, of securities
pursuant to such preorganization subscriptions, provided the
number of subscribers does not exceed 25 and either (1) no
commission or other remuneration is paid or given directly or
indirectly for or on account of such sale or sales or issuance,
or (2) if any commission or other remuneration is paid or given
directly or indirectly for or on account of such sale or sales
or issuance, the securities are not offered or sold by any
means of general advertising or general solicitation in this
State.
    N. The execution of orders for purchase of securities by a
registered salesperson and dealer, provided such persons act as
agent for the purchaser, have made no solicitation of the order
to purchase the securities, have no direct interest in the sale
or distribution of the securities ordered, receive no
commission, profit, or other compensation other than the
commissions involved in the purchase and sale of the securities
and deliver to the purchaser written confirmation of the order
which clearly identifies the commissions paid to the registered
dealer.
    O. Any offer, sale or issuance of securities, other than
fractional undivided interests in an oil, gas or other mineral
lease, right or royalty, for the direct or indirect benefit of
the issuer thereof, or of a controlling person, whether through
a dealer (acting either as principal or agent) or otherwise, if
the securities sold, immediately following the sale or sales,
together with securities already owned by the purchaser, would
constitute 50% or more of the equity interest of any one
issuer, provided that the number of purchasers is not more than
5 and provided further that no commission, discount or other
remuneration exceeding 15% of the aggregate sale price of the
securities is paid or given directly or indirectly for or on
account of the sale or sales.
    P. Any offer, sale or issuance of securities (except face
amount certificate contracts and investment fund shares)
issued by and representing an interest in an issuer which is a
business corporation incorporated under the laws of this State,
the purposes of which are to provide capital and supervision
solely for the redevelopment of blighted urban areas located in
a municipality in this State and whose assets are located
entirely within that municipality, provided: (1) no
commission, discount or other remuneration is paid or given
directly or indirectly for or on account of the sale or sales
of such securities; (2) the aggregate amount of any securities
of the issuer owned of record or beneficially by any one person
will not exceed the lesser of $5,000 or 4% of the equity
capitalization of the issuer; (3) the officers and directors of
the corporation have been bona fide residents of the
municipality not less than 3 years immediately preceding the
effectiveness of the offering sheet for the securities under
this subsection P; and (4) the issuer files with the Secretary
of State an offering sheet descriptive of the securities
setting forth:
        (a) the name and address of the issuer;
        (b) the title and total amount of securities to be
    offered;
        (c) the price at which the securities are to be
    offered; and
        (d) such additional information as the Secretary of
    State may prescribe by rule and regulation.
    The Secretary of State shall within a reasonable time
examine the offering sheet so filed and, unless the Secretary
of State shall make a determination that the offering sheet so
filed does not conform to the requirements of this subsection
P, shall declare the offering sheet to be effective, which
offering sheet shall continue effective for a period of 12
months from the date it becomes effective. The fee for
examining the offering sheet shall be as established pursuant
to Section 11a of this Act, and shall not be returnable in any
event. The Secretary of State shall by rule or regulation
require the filing of a report or reports of sales made to
residents of this State in reliance upon the exemption provided
by this subsection P and prescribe the form of such report and
the time within which such report shall be filed. The Secretary
of State shall prescribe by rule or regulation the amount of
the fee for filing any such report, but such fee shall not be
less than the minimum amount nor more than the maximum amount
established pursuant to Section 11a of this Act, and shall not
be returnable in any event. The Secretary of State may impose,
in such cases as he or she may deem appropriate, a penalty for
failure to file any such report in a timely manner, but no such
penalty shall exceed an amount equal to five times the filing
fee. The contents of any such report shall be deemed
confidential and shall not be disclosed to the public except by
order of court or in court proceedings. The failure to file any
such report shall not affect the availability of such
exemption, but such failure to file any such report shall
constitute a violation of subsection D of Section 12 of this
Act, subject to the penalties enumerated in Section 14 of this
Act. The civil remedies provided for in subsection A of Section
13 of this Act and the civil remedies of rescission and
appointment of a receiver, conservator, ancillary receiver or
ancillary conservator provided for in subsection F of Section
13 of this Act shall not be available against any person by
reason of the failure to file any such report or on account of
the contents of any such report.
    Q. Any isolated transaction, whether effected by a dealer
or not.
    R. Any offer, sale or issuance of a security to any person
who purchases at least $150,000 of the securities being
offered, where the purchaser's total purchase price does not,
or it is reasonably believed by the person relying upon this
subsection R that said purchase price does not, exceed 20
percent of the purchaser's net worth at the time of sale, or if
a natural person a joint net worth with that person's spouse,
for one or any combination of the following: (i) cash, (ii)
securities for which market quotations are readily available,
(iii) an unconditional obligation to pay cash or securities for
which quotations are readily available, which obligation is to
be discharged within five years of the sale of the securities
to the purchaser, or (iv) the cancellation of any indebtedness
owed by the issuer to the purchaser; provided that such
security is not offered or sold by means of any general
advertising or general solicitation in this State.
    S. Any offer, sale or issuance of a security to any person
who is, or who is reasonably believed by the person relying
upon this subsection S to be, a director, executive officer, or
general partner of the issuer of the securities being offered
or sold, or any director, executive officer, or general partner
of a general partner of that issuer. For purposes of this
subsection S, "executive officer" shall mean the president, any
vice president in charge of a principal business unit, division
or function (such as sales, administration or finance), any
other officer who performs a policy making function, or any
other person who performs similar policy making functions for
the issuer. Executive officers of subsidiaries may be deemed
executive officers of the issuer if they perform such policy
making functions for the issuer.
    A document being filed pursuant to this Section 4 shall be
deemed filed, and any fee paid pursuant to this Section 4 shall
be deemed paid, upon the date of actual receipt thereof by the
Secretary of State.
    T. An offer or sale of a security by an issuer that is
organized and, as of the time of the offer and the time of
sale, in good standing under the laws of the State of Illinois,
made solely to persons or entities that are, as of the time of
the offer and time of sale, residents of the State of Illinois,
provided:
        (1) The offering meets all of the requirements of the
    federal exemption for intrastate offerings provided in
    Section 3(a)(11) of the Securities Act of 1933 (15 U.S.C.
    77c(a)(11)) and Rule 147 adopted under the Securities Act
    of 1933 (17 CFR 230.147).
        (2) The aggregate purchase price of all securities sold
    by an issuer in reliance on the exemption under this
    subsection, within any 12-month period, does not exceed:
    (i) $1,000,000; or (ii) $4,000,000 if the issuer has
    undergone and made available (directly, or through a
    registered Internet portal), to each prospective purchaser
    and the Secretary of State, copies of its most recent
    financial statements which have been audited by an
    independent auditor and certified by a senior officer of
    the issuer as fairly, completely, and accurately
    presenting the financial condition of the issuer, in all
    material respects, as of the dates indicated therein.
    Amounts received in connection with any offer or sale to
    any accredited investor or any of the following shall not
    count toward the calculation of the foregoing monetary
    limitations:
            (a) any entity (including, without limitation, any
        trust) in which all of the equity interests are owned
        by (or with respect to any trust, the primary
        beneficiaries are) persons who are accredited
        investors or who meet one or more of the criteria in
        subparagraphs (b) through (d) of this paragraph (2);
            (b) with respect to participating in an offering of
        a particular issuer, a natural person serving as an
        officer, director, partner, or trustee of, or
        otherwise occupying similar status or performing
        similar functions with respect to, such issuer;
            (c) with respect to participating in an offering of
        a particular issuer, a natural person or entity who
        owns 10% or more of the then aggregate outstanding
        voting capital securities of such issuer; or
            (d) such other person or entity as the Secretary of
        State may hereafter exempt by rule.
        The Secretary of State may hereafter cumulatively
    increase the dollar limitations provided in this
    paragraph.
        (3) The aggregate amount sold by an issuer to any
    purchaser (other than an accredited investor or a person or
    entity which meets one or more of the criteria in
    subparagraphs (a) through (d) of paragraph (2) of this
    subsection T) in an offering of securities made in reliance
    on the exemption provided in this subsection T, within any
    consecutive 12-month period, does not exceed $5,000.
        (4) The Secretary of State shall establish by rule the
    duties of the issuer including disclosure and filing
    requirements, treatment of escrow funds and agreements,
    production of financial statements, and other requirements
    as deemed necessary.
        (5) The issuer has made available, to each prospective
    purchaser and the Secretary of State, copies of its most
    recent financial statements personally certified by one or
    more senior officers of the issuer as fairly, completely,
    and accurately presenting the financial condition of the
    issuer, in all material respects, as of the dates indicated
    therein.
        (6) No commission or other remuneration is paid or
    given directly or indirectly to any person or entity
    (including, without limitation, any registered Internet
    portal) for soliciting any person in this State, except to
    registered dealers and registered salespersons licensed in
    this State.
        (7) Not less than 15 days before the earlier of the
    first sale of securities made in reliance on the exemption
    provided in this subsection T, or the use of any general
    solicitation with respect thereto (other than a general
    announcement made by or on behalf of), an issuer shall file
    forms, materials, and fees as required by the Secretary of
    State by rule.
        The Secretary of State shall prescribe by rule the
    amount of the fee for filing the notice required in
    subparagraph (a), established pursuant to Section 11a of
    this Act. The Secretary of State may impose, in such cases
    as he or she may deem appropriate, a penalty for failure to
    file any such notice in a timely manner, but no such
    penalty shall exceed an amount equal to 5 times the filing
    fee. The contents of any such notice or portion thereof may
    be deemed confidential by the Secretary of State by rule or
    order and if so deemed shall not be disclosed to the public
    except by order of court or in court proceedings. The
    failure to file any such notice does not affect the
    availability of such exemption, but such failure to file
    any such report constitutes a violation of subsection D of
    Section 12 of this Act and is subject to the penalties and
    remedies available in this Act and under the law.
        (8) All payments for purchase of securities offered
    pursuant to the exemption provided under this subsection T
    are made directly to, and held by, the qualified escrowee
    identified in the escrow agreement required pursuant to
    subparagraph (c) of paragraph (4).
        (9) The issuer includes each of the following in one or
    more of the offering materials delivered to a prospective
    purchaser, or to which a prospective purchaser has been
    granted electronic access, in connection with the
    offering:
            (a) a description of the issuer, its type of
        entity, the address, and telephone number of its
        principal office;
            (b) a reasonably detailed description of the
        intended use of the offering proceeds, including any
        amounts to be paid, as compensation or otherwise, to
        any owner, executive officer, director, managing
        member, or other person occupying a similar status or
        performing similar functions on behalf of the issuer;
            (c) the identity of all persons owning more than
        10% of the voting capital securities of the issuer;
            (d) the identity of the executive officers,
        directors, managing members, and other persons
        occupying a similar status or performing similar
        functions in the name of and on behalf of the issuer,
        including their titles and a reasonably detailed
        description of their prior experience;
            (e) the identity of any person or entity who has
        been or will be retained by the issuer to assist the
        issuer in conducting the offering and sale of the
        securities (including all registered Internet portals
        but excluding persons acting solely as accountants or
        attorneys and employees whose primary job
        responsibilities involve the operating business of the
        issuer rather than assisting the issuer in raising
        capital) and a description of the consideration being
        paid to each such person or entity for such assistance;
            (f) any additional information material to the
        offering, including a description of significant
        factors that make the offering speculative or risky for
        the purchaser;
            (g) the information required pursuant to
        subparagraphs (a) and (b) of paragraph (4) of this
        subsection T;
            (h) such other information as the Secretary of
        State may hereafter require by rule.
        (10) The issuer (directly or through a registered
    Internet portal) requires each purchaser to certify, in
    writing or electronically, that the purchaser:
            (a) is a resident of the State of Illinois;
            (b) understands that he or she is investing in a
        high-risk, highly speculative, business venture, that
        he or she may lose all of his or her investment, and
        that he or she can afford such a loss of his or her
        investment;
            (c) understands that the securities being offered
        are highly illiquid, that there is no ready market for
        the sale of such securities, that it may be difficult
        or impossible for purchaser to sell or otherwise
        dispose of such securities, and (where applicable)
        that purchaser may be required to hold the securities
        for an indefinite period of time; and
            (d) understands that purchaser may be subject to
        the payment of certain taxes with respect to the
        securities being purchased whether or not purchaser
        has sold, or otherwise disposed of, such securities or
        whether purchaser has received any distributions or
        other amounts from the issuer.
        (11) The issuer (directly or through a registered
    Internet portal) obtains from each purchaser of a security
    offered under this subsection T evidence that the purchaser
    is a resident of this State and, if applicable, is an
    accredited investor. Without limiting the generality of
    the foregoing, and not to the exclusion of other reasonable
    methods which may be used by the issuer in connection with
    the foregoing, an issuer may rely.
        (12) The issuer (and to the extent a registered
    Internet portal is used, such registered Internet portal)
    maintains records of all offers and sales of securities
    made pursuant to the exemption granted by this subsection T
    and provides ready access to such records to the Secretary
    of State, upon notice from the Secretary of State.
        (13) The issuer is not, either before or as a result of
    the offering:
            (a) an investment company, as defined in Section 3
        of the Investment Company Act of 1940 (15 U.S.C.
        80a-3), as amended and in effect (unless the issuer
        qualifies for exclusion from such definition pursuant
        to one or more of the exceptions provided in Section
        3(c) of the Investment Company Act of 1940, any other
        provision of the Investment Company Act of 1940, or any
        administrative rule or regulation promulgated with
        respect to the Investment Company Act of 1940 or in
        connection therewith); or
            (b) subject to the reporting requirements of
        Section 13 or 15(d) of the Securities Exchange Act of
        1934 (15 U.S.C. 78m or 15 U.S.C. 78o(d).
        (14) Neither the issuer, nor any person affiliated with
    the issuer (either before or as a result of the offering),
    nor the offering itself, nor the registered Internet portal
    (to the extent used) is subject to disqualification
    established by the Secretary of State by rule or contained
    in the Securities Act of 1933 (15 U.S.C. 77c(a)(11)) and
    Rule 147 adopted under the Securities Act of 1933 (17 CFR
    230.147), unless both of the following are met:
            (a) on a showing of good cause and without
        prejudice to any other action by the Secretary of
        State, the Secretary of State determines that it is not
        necessary under the circumstances that an exemption is
        denied; and
            (b) the issuer establishes that it made a factual
        inquiry into whether any disqualification existed
        under this paragraph (14), but did not know, and in the
        exercise of reasonable care could not have known, that
        a disqualification existed under this paragraph (14);
        the nature and scope of the requisite inquiry will vary
        based on the circumstances of the issuer and the other
        offering participants.
(Source: P.A. 90-70, eff. 7-8-97; 91-809, eff. 1-1-01.)
 
    (815 ILCS 5/8)  (from Ch. 121 1/2, par. 137.8)
    Sec. 8. Registration of dealers, limited Canadian dealers,
internet portals, salespersons, investment advisers, and
investment adviser representatives.
 
    A. Except as otherwise provided in this subsection A, every
dealer, limited Canadian dealer, salesperson, investment
adviser, and investment adviser representative shall be
registered as such with the Secretary of State. No dealer or
salesperson need be registered as such when offering or selling
securities in transactions exempted by subsection A, B, C, D,
E, G, H, I, J, K, M, O, P, Q, R or S of Section 4 of this Act,
provided that such dealer or salesperson is not regularly
engaged in the business of offering or selling securities in
reliance upon the exemption set forth in subsection G or M of
Section 4 of this Act. No dealer, issuer or controlling person
shall employ a salesperson unless such salesperson is
registered as such with the Secretary of State or is employed
for the purpose of offering or selling securities solely in
transactions exempted by subsection A, B, C, D, E, G, H, I, J,
K, L, M, O, P, Q, R or S of Section 4 of this Act; provided that
such salesperson need not be registered when effecting
transactions in this State limited to those transactions
described in Section 15(h)(2) of the Federal 1934 Act or
engaging in the offer or sale of securities in respect of which
he or she has beneficial ownership and is a controlling person.
The Secretary of State may, by rule, regulation or order and
subject to such terms, conditions, and fees as may be
prescribed in such rule, regulation or order, exempt from the
registration requirements of this Section 8 any investment
adviser, if the Secretary of State shall find that such
registration is not necessary in the public interest by reason
of the small number of clients or otherwise limited character
of operation of such investment adviser.
 
    B. An application for registration as a dealer or limited
Canadian dealer, executed, verified, or authenticated by or on
behalf of the applicant, shall be filed with the Secretary of
State, in such form as the Secretary of State may by rule,
regulation or order prescribe, setting forth or accompanied by:
        (1) The name and address of the applicant, the location
    of its principal business office and all branch offices, if
    any, and the date of its organization;
        (2) A statement of any other Federal or state licenses
    or registrations which have been granted the applicant and
    whether any such licenses or registrations have ever been
    refused, cancelled, suspended, revoked or withdrawn;
        (3) The assets and all liabilities, including
    contingent liabilities of the applicant, as of a date not
    more than 60 days prior to the filing of the application;
        (4) (a) A brief description of any civil or criminal
    proceeding of which fraud is an essential element pending
    against the applicant and whether the applicant has ever
    been convicted of a felony, or of any misdemeanor of which
    fraud is an essential element;
        (b) A list setting forth the name, residence and
    business address and a 10 year occupational statement of
    each principal of the applicant and a statement describing
    briefly any civil or criminal proceedings of which fraud is
    an essential element pending against any such principal and
    the facts concerning any conviction of any such principal
    of a felony, or of any misdemeanor of which fraud is an
    essential element;
        (5) If the applicant is a corporation: a list of its
    officers and directors setting forth the residence and
    business address of each; a 10-year occupational statement
    of each such officer or director; and a statement
    describing briefly any civil or criminal proceedings of
    which fraud is an essential element pending against each
    such officer or director and the facts concerning any
    conviction of any officer or director of a felony, or of
    any misdemeanor of which fraud is an essential element;
        (6) If the applicant is a sole proprietorship, a
    partnership, limited liability company, an unincorporated
    association or any similar form of business organization:
    the name, residence and business address of the proprietor
    or of each partner, member, officer, director, trustee or
    manager; the limitations, if any, of the liability of each
    such individual; a 10-year occupational statement of each
    such individual; a statement describing briefly any civil
    or criminal proceedings of which fraud is an essential
    element pending against each such individual and the facts
    concerning any conviction of any such individual of a
    felony, or of any misdemeanor of which fraud is an
    essential element;
        (7) Such additional information as the Secretary of
    State may by rule or regulation prescribe as necessary to
    determine the applicant's financial responsibility,
    business repute and qualification to act as a dealer.
        (8) (a) No applicant shall be registered or
    re-registered as a dealer or limited Canadian dealer under
    this Section unless and until each principal of the dealer
    has passed an examination conducted by the Secretary of
    State or a self-regulatory organization of securities
    dealers or similar person, which examination has been
    designated by the Secretary of State by rule, regulation or
    order to be satisfactory for purposes of determining
    whether the applicant has sufficient knowledge of the
    securities business and laws relating thereto to act as a
    registered dealer. Any dealer who was registered on
    September 30, 1963, and has continued to be so registered;
    and any principal of any registered dealer, who was acting
    in such capacity on and continuously since September 30,
    1963; and any individual who has previously passed a
    securities dealer examination administered by the
    Secretary of State or any examination designated by the
    Secretary of State to be satisfactory for purposes of
    determining whether the applicant has sufficient knowledge
    of the securities business and laws relating thereto to act
    as a registered dealer by rule, regulation or order, shall
    not be required to pass an examination in order to continue
    to act in such capacity. The Secretary of State may by
    order waive the examination requirement for any principal
    of an applicant for registration under this subsection B
    who has had such experience or education relating to the
    securities business as may be determined by the Secretary
    of State to be the equivalent of such examination. Any
    request for such a waiver shall be filed with the Secretary
    of State in such form as may be prescribed by rule or
    regulation.
        (b) Unless an applicant is a member of the body
    corporate known as the Securities Investor Protection
    Corporation established pursuant to the Act of Congress of
    the United States known as the Securities Investor
    Protection Act of 1970, as amended, a member of an
    association of dealers registered as a national securities
    association pursuant to Section 15A of the Federal 1934
    Act, or a member of a self-regulatory organization or stock
    exchange in Canada which the Secretary of State has
    designated by rule or order, an applicant shall not be
    registered or re-registered unless and until there is filed
    with the Secretary of State evidence that such applicant
    has in effect insurance or other equivalent protection for
    each client's cash or securities held by such applicant,
    and an undertaking that such applicant will continually
    maintain such insurance or other protection during the
    period of registration or re-registration. Such insurance
    or other protection shall be in a form and amount
    reasonably prescribed by the Secretary of State by rule or
    regulation.
        (9) The application for the registration of a dealer or
    limited Canadian dealer shall be accompanied by a filing
    fee and a fee for each branch office in this State, in each
    case in the amount established pursuant to Section 11a of
    this Act, which fees shall not be returnable in any event.
        (10) The Secretary of State shall notify the dealer or
    limited Canadian dealer by written notice (which may be by
    electronic or facsimile transmission) of the effectiveness
    of the registration as a dealer in this State.
        (11) Any change which renders no longer accurate any
    information contained in any application for registration
    or re-registration of a dealer or limited Canadian dealer
    shall be reported to the Secretary of State within 10
    business days after the occurrence of such change; but in
    respect to assets and liabilities only materially adverse
    changes need be reported.
 
    C. Any registered dealer, limited Canadian dealer, issuer,
or controlling person desiring to register a salesperson shall
file an application with the Secretary of State, in such form
as the Secretary of State may by rule or regulation prescribe,
which the salesperson is required by this Section to provide to
the dealer, issuer, or controlling person, executed, verified,
or authenticated by the salesperson setting forth or
accompanied by:
        (1) the name, residence and business address of the
    salesperson;
        (2) whether any federal or State license or
    registration as dealer, limited Canadian dealer, or
    salesperson has ever been refused the salesperson or
    cancelled, suspended, revoked, withdrawn, barred, limited,
    or otherwise adversely affected in a similar manner or
    whether the salesperson has ever been censured or expelled;
        (3) the nature of employment with, and names and
    addresses of, employers of the salesperson for the 10 years
    immediately preceding the date of application;
        (4) a brief description of any civil or criminal
    proceedings of which fraud is an essential element pending
    against the salesperson, and whether the salesperson has
    ever been convicted of a felony, or of any misdemeanor of
    which fraud is an essential element;
        (5) such additional information as the Secretary of
    State may by rule, regulation or order prescribe as
    necessary to determine the salesperson's business repute
    and qualification to act as a salesperson; and
        (6) no individual shall be registered or re-registered
    as a salesperson under this Section unless and until such
    individual has passed an examination conducted by the
    Secretary of State or a self-regulatory organization of
    securities dealers or similar person, which examination
    has been designated by the Secretary of State by rule,
    regulation or order to be satisfactory for purposes of
    determining whether the applicant has sufficient knowledge
    of the securities business and laws relating thereto to act
    as a registered salesperson.
        Any salesperson who was registered prior to September
    30, 1963, and has continued to be so registered, and any
    individual who has passed a securities salesperson
    examination administered by the Secretary of State or an
    examination designated by the Secretary of State by rule,
    regulation or order to be satisfactory for purposes of
    determining whether the applicant has sufficient knowledge
    of the securities business and laws relating thereto to act
    as a registered salesperson, shall not be required to pass
    an examination in order to continue to act as a
    salesperson. The Secretary of State may by order waive the
    examination requirement for any applicant for registration
    under this subsection C who has had such experience or
    education relating to the securities business as may be
    determined by the Secretary of State to be the equivalent
    of such examination. Any request for such a waiver shall be
    filed with the Secretary of State in such form as may be
    prescribed by rule, regulation or order.
        (7) The application for registration of a salesperson
    shall be accompanied by a filing fee and a Securities Audit
    and Enforcement Fund fee, each in the amount established
    pursuant to Section 11a of this Act, which shall not be
    returnable in any event.
        (8) Any change which renders no longer accurate any
    information contained in any application for registration
    or re-registration as a salesperson shall be reported to
    the Secretary of State within 10 business days after the
    occurrence of such change. If the activities are terminated
    which rendered an individual a salesperson for the dealer,
    issuer or controlling person, the dealer, issuer or
    controlling person, as the case may be, shall notify the
    Secretary of State, in writing, within 30 days of the
    salesperson's cessation of activities, using the
    appropriate termination notice form.
        (9) A registered salesperson may transfer his or her
    registration under this Section 8 for the unexpired term
    thereof from one registered dealer or limited Canadian
    dealer to another by the giving of notice of the transfer
    by the new registered dealer or limited Canadian dealer to
    the Secretary of State in such form and subject to such
    conditions as the Secretary of State shall by rule or
    regulation prescribe. The new registered dealer or limited
    Canadian dealer shall promptly file an application for
    registration of such salesperson as provided in this
    subsection C, accompanied by the filing fee prescribed by
    paragraph (7) of this subsection C.
 
    C-5. Except with respect to federal covered investment
advisers whose only clients are investment companies as defined
in the Federal 1940 Act, other investment advisers, federal
covered investment advisers, or any similar person which the
Secretary of State may prescribe by rule or order, a federal
covered investment adviser shall file with the Secretary of
State, prior to acting as a federal covered investment adviser
in this State, such documents as have been filed with the
Securities and Exchange Commission as the Secretary of State by
rule or order may prescribe. The notification of a federal
covered investment adviser shall be accompanied by a
notification filing fee established pursuant to Section 11a of
this Act, which shall not be returnable in any event. Every
person acting as a federal covered investment adviser in this
State shall file a notification filing and pay an annual
notification filing fee established pursuant to Section 11a of
this Act, which is not returnable in any event. The failure to
file any such notification shall constitute a violation of
subsection D of Section 12 of this Act, subject to the
penalties enumerated in Section 14 of this Act. Until October
10, 1999 or other date as may be legally permissible, a federal
covered investment adviser who fails to file the notification
or refuses to pay the fees as required by this subsection shall
register as an investment adviser with the Secretary of State
under Section 8 of this Act. The civil remedies provided for in
subsection A of Section 13 of this Act and the civil remedies
of rescission and appointment of receiver, conservator,
ancillary receiver, or ancillary conservator provided for in
subsection F of Section 13 of this Act shall not be available
against any person by reason of the failure to file any such
notification or to pay the notification fee or on account of
the contents of any such notification.
 
    D. An application for registration as an investment
adviser, executed, verified, or authenticated by or on behalf
of the applicant, shall be filed with the Secretary of State,
in such form as the Secretary of State may by rule or
regulation prescribe, setting forth or accompanied by:
        (1) The name and form of organization under which the
    investment adviser engages or intends to engage in
    business; the state or country and date of its
    organization; the location of the adviser's principal
    business office and branch offices, if any; the names and
    addresses of the adviser's principal, partners, officers,
    directors, and persons performing similar functions or, if
    the investment adviser is an individual, of the individual;
    and the number of the adviser's employees who perform
    investment advisory functions;
        (2) The education, the business affiliations for the
    past 10 years, and the present business affiliations of the
    investment adviser and of the adviser's principal,
    partners, officers, directors, and persons performing
    similar functions and of any person controlling the
    investment adviser;
        (3) The nature of the business of the investment
    adviser, including the manner of giving advice and
    rendering analyses or reports;
        (4) The nature and scope of the authority of the
    investment adviser with respect to clients' funds and
    accounts;
        (5) The basis or bases upon which the investment
    adviser is compensated;
        (6) Whether the investment adviser or any principal,
    partner, officer, director, person performing similar
    functions or person controlling the investment adviser (i)
    within 10 years of the filing of the application has been
    convicted of a felony, or of any misdemeanor of which fraud
    is an essential element, or (ii) is permanently or
    temporarily enjoined by order or judgment from acting as an
    investment adviser, underwriter, dealer, principal or
    salesperson, or from engaging in or continuing any conduct
    or practice in connection with any such activity or in
    connection with the purchase or sale of any security, and
    in each case the facts relating to the conviction, order or
    judgment;
        (7) (a) A statement as to whether the investment
    adviser is engaged or is to engage primarily in the
    business of rendering investment supervisory services; and
        (b) A statement that the investment adviser will
    furnish his, her, or its clients with such information as
    the Secretary of State deems necessary in the form
    prescribed by the Secretary of State by rule or regulation;
        (8) Such additional information as the Secretary of
    State may, by rule, regulation or order prescribe as
    necessary to determine the applicant's financial
    responsibility, business repute and qualification to act
    as an investment adviser.
        (9) No applicant shall be registered or re-registered
    as an investment adviser under this Section unless and
    until each principal of the applicant who is actively
    engaged in the conduct and management of the applicant's
    advisory business in this State has passed an examination
    or completed an educational program conducted by the
    Secretary of State or an association of investment advisers
    or similar person, which examination or educational
    program has been designated by the Secretary of State by
    rule, regulation or order to be satisfactory for purposes
    of determining whether the applicant has sufficient
    knowledge of the securities business and laws relating
    thereto to conduct the business of a registered investment
    adviser.
        Any person who was a registered investment adviser
    prior to September 30, 1963, and has continued to be so
    registered, and any individual who has passed an investment
    adviser examination administered by the Secretary of
    State, or passed an examination or completed an educational
    program designated by the Secretary of State by rule,
    regulation or order to be satisfactory for purposes of
    determining whether the applicant has sufficient knowledge
    of the securities business and laws relating thereto to
    conduct the business of a registered investment adviser,
    shall not be required to pass an examination or complete an
    educational program in order to continue to act as an
    investment adviser. The Secretary of State may by order
    waive the examination or educational program requirement
    for any applicant for registration under this subsection D
    if the principal of the applicant who is actively engaged
    in the conduct and management of the applicant's advisory
    business in this State has had such experience or education
    relating to the securities business as may be determined by
    the Secretary of State to be the equivalent of the
    examination or educational program. Any request for a
    waiver shall be filed with the Secretary of State in such
    form as may be prescribed by rule or regulation.
        (10) No applicant shall be registered or re-registered
    as an investment adviser under this Section 8 unless the
    application for registration or re-registration is
    accompanied by an application for registration or
    re-registration for each person acting as an investment
    adviser representative on behalf of the adviser and a
    Securities Audit and Enforcement Fund fee that shall not be
    returnable in any event is paid with respect to each
    investment adviser representative.
        (11) The application for registration of an investment
    adviser shall be accompanied by a filing fee and a fee for
    each branch office in this State, in each case in the
    amount established pursuant to Section 11a of this Act,
    which fees shall not be returnable in any event.
        (12) The Secretary of State shall notify the investment
    adviser by written notice (which may be by electronic or
    facsimile transmission) of the effectiveness of the
    registration as an investment adviser in this State.
        (13) Any change which renders no longer accurate any
    information contained in any application for registration
    or re-registration of an investment adviser shall be
    reported to the Secretary of State within 10 business days
    after the occurrence of the change. In respect to assets
    and liabilities of an investment adviser that retains
    custody of clients' cash or securities or accepts
    pre-payment of fees in excess of $500 per client and 6 or
    more months in advance only materially adverse changes need
    be reported by written notice (which may be by electronic
    or facsimile transmission) no later than the close of
    business on the second business day following the discovery
    thereof.
        (14) Each application for registration as an
    investment adviser shall become effective automatically on
    the 45th day following the filing of the application,
    required documents or information, and payment of the
    required fee unless (i) the Secretary of State has
    registered the investment adviser prior to that date or
    (ii) an action with respect to the applicant is pending
    under Section 11 of this Act.
 
    D-5. A registered investment adviser or federal covered
investment adviser desiring to register an investment adviser
representative shall file an application with the Secretary of
State, in the form as the Secretary of State may by rule or
order prescribe, which the investment adviser representative
is required by this Section to provide to the investment
adviser, executed, verified, or authenticated by the
investment adviser representative and setting forth or
accompanied by:
        (1) The name, residence, and business address of the
    investment adviser representative;
        (2) A statement whether any federal or state license or
    registration as a dealer, salesperson, investment adviser,
    or investment adviser representative has ever been
    refused, canceled, suspended, revoked or withdrawn;
        (3) The nature of employment with, and names and
    addresses of, employers of the investment adviser
    representative for the 10 years immediately preceding the
    date of application;
        (4) A brief description of any civil or criminal
    proceedings, of which fraud is an essential element,
    pending against the investment adviser representative and
    whether the investment adviser representative has ever
    been convicted of a felony or of any misdemeanor of which
    fraud is an essential element;
        (5) Such additional information as the Secretary of
    State may by rule or order prescribe as necessary to
    determine the investment adviser representative's business
    repute or qualification to act as an investment adviser
    representative;
        (6) Documentation that the individual has passed an
    examination conducted by the Secretary of State, an
    organization of investment advisers, or similar person,
    which examination has been designated by the Secretary of
    State by rule or order to be satisfactory for purposes of
    determining whether the applicant has sufficient knowledge
    of the investment advisory or securities business and laws
    relating to that business to act as a registered investment
    adviser representative; and
        (7) A Securities Audit and Enforcement Fund fee
    established under Section 11a of this Act, which shall not
    be returnable in any event.
    The Secretary of State may by order waive the examination
requirement for an applicant for registration under this
subsection D-5 who has had the experience or education relating
to the investment advisory or securities business as may be
determined by the Secretary of State to be the equivalent of
the examination. A request for a waiver shall be filed with the
Secretary of State in the form as may be prescribed by rule or
order.
    A change that renders no longer accurate any information
contained in any application for registration or
re-registration as an investment adviser representative must
be reported to the Secretary of State within 10 business days
after the occurrence of the change. If the activities that
rendered an individual an investment adviser representative
for the investment adviser are terminated, the investment
adviser shall notify the Secretary of State in writing (which
may be by electronic or facsimile transmission), within 30 days
of the investment adviser representative's termination, using
the appropriate termination notice form as the Secretary of
State may prescribe by rule or order.
    A registered investment adviser representative may
transfer his or her registration under this Section 8 for the
unexpired term of the registration from one registered
investment adviser to another by the giving of notice of the
transfer by the new investment adviser to the Secretary of
State in the form and subject to the conditions as the
Secretary of State shall prescribe. The new registered
investment adviser shall promptly file an application for
registration of the investment adviser representative as
provided in this subsection, accompanied by the Securities
Audit and Enforcement Fund fee prescribed by paragraph (7) of
this subsection D-5.
 
    E. (1) Subject to the provisions of subsection F of Section
11 of this Act, the registration of a dealer, limited Canadian
dealer, salesperson, investment adviser, or investment adviser
representative may be denied, suspended or revoked if the
Secretary of State finds that the dealer, limited Canadian
dealer, internet portal, salesperson, investment adviser, or
investment adviser representative or any principal officer,
director, partner, member, trustee, manager or any person who
performs a similar function of the dealer, limited Canadian
dealer, internet portal, or investment adviser:
        (a) has been convicted of any felony during the 10 year
    period preceding the date of filing of any application for
    registration or at any time thereafter, or of any
    misdemeanor of which fraud is an essential element;
        (b) has engaged in any unethical practice in connection
    with any security, or in any fraudulent business practice;
        (c) has failed to account for any money or property, or
    has failed to deliver any security, to any person entitled
    thereto when due or within a reasonable time thereafter;
        (d) in the case of a dealer, limited Canadian dealer,
    or investment adviser, is insolvent;
        (e) in the case of a dealer, limited Canadian dealer,
    salesperson, or registered principal of a dealer or limited
    Canadian dealer (i) has failed reasonably to supervise the
    securities activities of any of its salespersons or other
    employees and the failure has permitted or facilitated a
    violation of Section 12 of this Act or (ii) is offering or
    selling or has offered or sold securities in this State
    through a salesperson other than a registered salesperson,
    or, in the case of a salesperson, is selling or has sold
    securities in this State for a dealer, limited Canadian
    dealer, issuer or controlling person with knowledge that
    the dealer, limited Canadian dealer, issuer or controlling
    person has not complied with the provisions of this Act or
    (iii) has failed reasonably to supervise the
    implementation of compliance measures following notice by
    the Secretary of State of noncompliance with the Act or
    with the regulations promulgated thereunder or both or (iv)
    has failed to maintain and enforce written procedures to
    supervise the types of business in which it engages and to
    supervise the activities of its salespersons that are
    reasonably designed to achieve compliance with applicable
    securities laws and regulations;
        (f) in the case of an investment adviser, has failed
    reasonably to supervise the advisory activities of any of
    its investment adviser representatives or employees and
    the failure has permitted or facilitated a violation of
    Section 12 of this Act;
        (g) has violated any of the provisions of this Act;
        (h) has made any material misrepresentation to the
    Secretary of State in connection with any information
    deemed necessary by the Secretary of State to determine a
    dealer's, limited Canadian dealer's, or investment
    adviser's financial responsibility or a dealer's, limited
    Canadian dealer's, investment adviser's, salesperson's, or
    investment adviser representative's business repute or
    qualifications, or has refused to furnish any such
    information requested by the Secretary of State;
        (i) has had a license or registration under any Federal
    or State law regulating securities, commodity futures
    contracts, or stock futures contracts refused, cancelled,
    suspended, withdrawn, revoked, or otherwise adversely
    affected in a similar manner;
        (j) has had membership in or association with any
    self-regulatory organization registered under the Federal
    1934 Act or the Federal 1974 Act suspended, revoked,
    refused, expelled, cancelled, barred, limited in any
    capacity, or otherwise adversely affected in a similar
    manner arising from any fraudulent or deceptive act or a
    practice in violation of any rule, regulation or standard
    duly promulgated by the self-regulatory organization;
        (k) has had any order entered against it after notice
    and opportunity for hearing by a securities agency of any
    state, any foreign government or agency thereof, the
    Securities and Exchange Commission, or the Federal
    Commodities Futures Trading Commission arising from any
    fraudulent or deceptive act or a practice in violation of
    any statute, rule or regulation administered or
    promulgated by the agency or commission;
        (l) in the case of a dealer or limited Canadian dealer,
    fails to maintain a minimum net capital in an amount which
    the Secretary of State may by rule or regulation require;
        (m) has conducted a continuing course of dealing of
    such nature as to demonstrate an inability to properly
    conduct the business of the dealer, limited Canadian
    dealer, salesperson, investment adviser, or investment
    adviser representative;
        (n) has had, after notice and opportunity for hearing,
    any injunction or order entered against it or license or
    registration refused, cancelled, suspended, revoked,
    withdrawn, limited, or otherwise adversely affected in a
    similar manner by any state or federal body, agency or
    commission regulating banking, insurance, finance or small
    loan companies, real estate or mortgage brokers or
    companies, if the action resulted from any act found by the
    body, agency or commission to be a fraudulent or deceptive
    act or practice in violation of any statute, rule or
    regulation administered or promulgated by the body, agency
    or commission;
        (o) has failed to file a return, or to pay the tax,
    penalty or interest shown in a filed return, or to pay any
    final assessment of tax, penalty or interest, as required
    by any tax Act administered by the Illinois Department of
    Revenue, until such time as the requirements of that tax
    Act are satisfied;
        (p) in the case of a natural person who is a dealer,
    limited Canadian dealer, salesperson, investment adviser,
    or investment adviser representative, has defaulted on an
    educational loan guaranteed by the Illinois Student
    Assistance Commission, until the natural person has
    established a satisfactory repayment record as determined
    by the Illinois Student Assistance Commission;
        (q) has failed to maintain the books and records
    required under this Act or rules or regulations promulgated
    under this Act or under any requirements established by the
    Securities and Exchange Commission or a self-regulatory
    organization;
        (r) has refused to allow or otherwise impeded designees
    of the Secretary of State from conducting an audit,
    examination, inspection, or investigation provided for
    under Section 8 or 11 of this Act;
        (s) has failed to maintain any minimum net capital or
    bond requirement set forth in this Act or any rule or
    regulation promulgated under this Act;
        (t) has refused the Secretary of State or his or her
    designee access to any office or location within an office
    to conduct an investigation, audit, examination, or
    inspection;
        (u) has advised or caused a public pension fund or
    retirement system established under the Illinois Pension
    Code to make an investment or engage in a transaction not
    authorized by that Code;
        (v) if a corporation, limited liability company, or
    limited liability partnership has been suspended,
    canceled, revoked, or has failed to register as a foreign
    corporation, limited liability company, or limited
    liability partnership with the Secretary of State;
        (w) is permanently or temporarily enjoined by any court
    of competent jurisdiction, including any state, federal,
    or foreign government, from engaging in or continuing any
    conduct or practice involving any aspect of the securities
    or commodities business or in any other business where the
    conduct or practice enjoined involved investments,
    franchises, insurance, banking, or finance;
    (2) If the Secretary of State finds that any registrant or
applicant for registration is no longer in existence or has
ceased to do business as a dealer, limited Canadian dealer,
internet portal, salesperson, investment adviser, or
investment adviser representative, or is subject to an
adjudication as a person under legal disability or to the
control of a guardian, or cannot be located after reasonable
search, or has failed after written notice to pay to the
Secretary of State any additional fee prescribed by this
Section or specified by rule or regulation, or if a natural
person, has defaulted on an educational loan guaranteed by the
Illinois Student Assistance Commission, the Secretary of State
may by order cancel the registration or application.
    (3) Withdrawal of an application for registration or
withdrawal from registration as a dealer, limited Canadian
dealer, salesperson, investment adviser, or investment adviser
representative becomes effective 30 days after receipt of an
application to withdraw or within such shorter period of time
as the Secretary of State may determine, unless any proceeding
is pending under Section 11 of this Act when the application is
filed or a proceeding is instituted within 30 days after the
application is filed. If a proceeding is pending or instituted,
withdrawal becomes effective at such time and upon such
conditions as the Secretary of State by order determines. If no
proceeding is pending or instituted and withdrawal
automatically becomes effective, the Secretary of State may
nevertheless institute a revocation or suspension proceeding
within 2 years after withdrawal became effective and enter a
revocation or suspension order as of the last date on which
registration was effective.
 
    F. The Secretary of State shall make available upon request
the date that each dealer, investment adviser, salesperson, or
investment adviser representative was granted registration,
together with the name and address of the dealer, limited
Canadian dealer, or issuer on whose behalf the salesperson is
registered, and all orders of the Secretary of State denying or
abandoning an application, or suspending or revoking
registration, or censuring the persons. The Secretary of State
may designate by rule, regulation or order the statements,
information or reports submitted to or filed with him or her
pursuant to this Section 8 which the Secretary of State
determines are of a sensitive nature and therefore should be
exempt from public disclosure. Any such statement, information
or report shall be deemed confidential and shall not be
disclosed to the public except upon the consent of the person
filing or submitting the statement, information or report or by
order of court or in court proceedings.
 
    G. The registration or re-registration of a dealer or
limited Canadian dealer and of all salespersons registered upon
application of the dealer or limited Canadian dealer shall
expire on the next succeeding anniversary date of the
registration or re-registration of the dealer; and the
registration or re-registration of an investment adviser and of
all investment adviser representatives registered upon
application of the investment adviser shall expire on the next
succeeding anniversary date of the registration of the
investment adviser; provided, that the Secretary of State may
by rule or regulation prescribe an alternate date which any
dealer registered under the Federal 1934 Act or a member of any
self-regulatory association approved pursuant thereto, a
member of a self-regulatory organization or stock exchange in
Canada, or any investment adviser may elect as the expiration
date of its dealer or limited Canadian dealer and salesperson
registrations, or the expiration date of its investment adviser
registration, as the case may be. A registration of a
salesperson registered upon application of an issuer or
controlling person shall expire on the next succeeding
anniversary date of the registration, or upon termination or
expiration of the registration of the securities, if any,
designated in the application for his or her registration or
the alternative date as the Secretary may prescribe by rule or
regulation. Subject to paragraph (9) of subsection C of this
Section 8, a salesperson's registration also shall terminate
upon cessation of his or her employment, or termination of his
or her appointment or authorization, in each case by the person
who applied for the salesperson's registration, provided that
the Secretary of State may by rule or regulation prescribe an
alternate date for the expiration of the registration.
 
    H. Applications for re-registration of dealers, limited
Canadian dealers, internet portals, salespersons, investment
advisers, and investment adviser representatives shall be
filed with the Secretary of State prior to the expiration of
the then current registration and shall contain such
information as may be required by the Secretary of State upon
initial application with such omission therefrom or addition
thereto as the Secretary of State may authorize or prescribe.
Each application for re-registration of a dealer, limited
Canadian dealer, internet portal, or investment adviser shall
be accompanied by a filing fee, each application for
re-registration as a salesperson shall be accompanied by a
filing fee and a Securities Audit and Enforcement Fund fee
established pursuant to Section 11a of this Act, and each
application for re-registration as an investment adviser
representative shall be accompanied by a Securities Audit and
Enforcement Fund fee established under Section 11a of this Act,
which shall not be returnable in any event. Notwithstanding the
foregoing, applications for re-registration of dealers,
limited Canadian dealers, internet portals, and investment
advisers may be filed within 30 days following the expiration
of the registration provided that the applicant pays the annual
registration fee together with an additional amount equal to
the annual registration fee and files any other information or
documents that the Secretary of State may prescribe by rule or
regulation or order. Any application filed within 30 days
following the expiration of the registration shall be
automatically effective as of the time of the earlier
expiration provided that the proper fee has been paid to the
Secretary of State.
    Each registered dealer, limited Canadian dealer, internet
portal, or investment adviser shall continue to be registered
if the registrant changes his, her, or its form of organization
provided that the dealer or investment adviser files an
amendment to his, her, or its application not later than 30
days following the occurrence of the change and pays the
Secretary of State a fee in the amount established under
Section 11a of this Act.
 
    I. (1) Every registered dealer, limited Canadian dealer,
internet portal, and investment adviser shall make and keep for
such periods, such accounts, correspondence, memoranda,
papers, books and records as the Secretary of State may by rule
or regulation prescribe. All records so required shall be
preserved for 3 years unless the Secretary of State by rule,
regulation or order prescribes otherwise for particular types
of records.
    (2) Every registered dealer, limited Canadian dealer,
internet portal, and investment adviser shall file such
financial reports as the Secretary of State may by rule or
regulation prescribe.
    (3) All the books and records referred to in paragraph (1)
of this subsection I are subject at any time or from time to
time to such reasonable periodic, special or other audits,
examinations, or inspections by representatives of the
Secretary of State, within or without this State, as the
Secretary of State deems necessary or appropriate in the public
interest or for the protection of investors.
    (4) At the time of an audit, examination, or inspection,
the Secretary of State, by his or her designees, may conduct an
interview of any person employed or appointed by or affiliated
with a registered dealer, limited Canadian dealer, internet
portal, or investment advisor, provided that the dealer,
limited Canadian dealer, internet portal, or investment
advisor shall be given reasonable notice of the time and place
for the interview. At the option of the dealer, limited
Canadian dealer, internet portal, or investment advisor, a
representative of the dealer or investment advisor with
supervisory responsibility over the individual being
interviewed may be present at the interview.
 
    J. The Secretary of State may require by rule or regulation
the payment of an additional fee for the filing of information
or documents required to be filed by this Section which have
not been filed in a timely manner. The Secretary of State may
also require by rule or regulation the payment of an
examination fee for administering any examination which it may
conduct pursuant to subsection B, C, D, or D-5 of this Section
8.
 
    K. The Secretary of State may declare any application for
registration or limited registration under this Section 8
abandoned by order if the applicant fails to pay any fee or
file any information or document required under this Section 8
or by rule or regulation for more than 30 days after the
required payment or filing date. The applicant may petition the
Secretary of State for a hearing within 15 days after the
applicant's receipt of the order of abandonment, provided that
the petition sets forth the grounds upon which the applicant
seeks a hearing.
 
    L. Any document being filed pursuant to this Section 8
shall be deemed filed, and any fee being paid pursuant to this
Section 8 shall be deemed paid, upon the date of actual receipt
thereof by the Secretary of State or his or her designee.
 
    M. The Secretary of State shall provide to the Illinois
Student Assistance Commission annually or at mutually agreed
periodic intervals the names and social security numbers of
natural persons registered under subsections B, C, D, and D-5
of this Section. The Illinois Student Assistance Commission
shall determine if any student loan defaulter is registered as
a dealer, limited Canadian dealer, internet portal
salesperson, or investment adviser under this Act and report
its determination to the Secretary of State or his or her
designee.
(Source: P.A. 92-308, eff. 1-1-02; 93-580, eff. 8-21-03.)
 
    (815 ILCS 5/8d new)
    Sec. 8d. Offerings made through registered Internet
portals.
    (a) An issuer shall make an offering or sale of securities
pursuant to subsection T of Section 4 of this Act through the
use of one or more registered Internet portals.
    (b) The Internet portal:
        (1) shall be a registered broker-dealer under the
    Securities Exchange Act of 1934 (15 U.S.C. 78o);
        (2) shall be a funding portal registered under the
    Securities Act of 1933 (15 U.S.C. 77d-1) and the Securities
    and Exchange Commission has adopted rules under authority
    of Section 3(h) of the Securities Exchange Act of 1934 (15
    U.S.C. 78c) and Section 304 of the Jumpstart Our Business
    Startups Act (P.L. 112-106) governing funding portals;
        (3) shall be a dealer registered under this Act as of
    the date of any offer or sale of securities made through
    the Internet portal; or
        (4) shall, to the extent it meets the qualifications
    for exemption from registration pursuant to subsection (d)
    of this Section:
            (A) file, not later than 30 days before the date of
        the first offer or sale of securities made within this
        State, an application for registration (or renewal of
        registration, as applicable) as a registered Internet
        portal with the Secretary of State, in writing or in
        electronic form as prescribed by the Secretary of
        State, which the Secretary of State shall make
        available as an electronic document on the Secretary of
        State's Internet website, containing such information
        and required deliveries as specified therein; and
            (B) pay the application filing fee established
        under Section 11a of this Act; the Secretary of State
        shall, within a reasonable time, examine the filed
        application and other materials filed and, approve or
        deny the application.
    (c) If any change occurs in the information submitted by,
or on behalf of, an Internet portal to the Secretary of State,
the Internet portal shall notify the Secretary of State within
10 days after such change occurs and shall provide the
Secretary of State with such additional information (if any)
requested by the Secretary of State in connection therewith.
    (d) Notwithstanding anything contained in this Act to the
contrary, neither an Internet portal nor its owning or
operating entity is required to register as a dealer or an
investment advisor under this Act if each of the following
applies with respect to the Internet portal and its owning or
operating entity:
        (1) It does not solicit purchases, sales, or offers to
    buy the securities offered or displayed on the Internet
    portal.
        (2) It does not collect or hold funds in connection
    with any purchase, sale, or offer to buy any securities
    offered or displayed on the Internet portal.
        (3) It does not compensate employees, agents, or other
    persons for the solicitation or based on the sale of
    securities displayed or referenced on the Internet portal.
        (4) It is not compensated based on the amount of
    securities sold.
        (5) The fee it charges an issuer for an offering of
    securities on the Internet portal is a fixed amount for
    each offering, a variable amount based on the length of
    time that the securities are offered on the Internet
    portal, a variable amount based on the total proposed
    offering amount, or any combination of such fixed and
    variable amounts.
        (6) It does not offer investment advice or
    recommendations; however, an Internet portal is not deemed
    to be offering investment advice or recommendations simply
    by virtue of:
            (A) selecting transactions in which the Internet
        portal shall serve as an intermediary;
            (B) establishing reasonable selection criteria for
        an issuer to meet in order to establish an offer or
        sale of securities through the Internet portal;
            (C) establishing reasonable selection criteria for
        a potential purchaser to meet in order to participate
        in an offer or sale of securities made through the
        Internet portal; or
            (D) terminating an issuer transaction at any time
        before the first sale of the securities of such issuer
        if the Internet portal determines such action is
        appropriate, after reasonable due diligence, to
        protect potential purchasers, and the Internet portal
        is able to direct the qualified escrowee to return all
        funds then provided by potential purchasers, if any.
        (7) It does not engage in such other activities as the
    Secretary of State, by rule, determines are prohibited.
    (e) Upon completion of an offering made pursuant to
subsection T of Section 4, each registered Internet portal
involved with the transactions (and the issuer, to the extent
applicable) shall store any and all electronic materials
related to the completed offering (including copies of all
offering documents, all offering materials, and all purchaser
information) on a secure, non-public, server or in such other
manner as the Secretary of State may hereafter deem acceptable
by rule.
 
    (815 ILCS 5/11)  (from Ch. 121 1/2, par. 137.11)
    Sec. 11. Duties and powers of the Secretary of State.
    A. (1) The administration of this Act is vested in the
Secretary of State, who may from time to time make, amend and
rescind such rules and regulations as may be necessary to carry
out this Act, including rules and regulations governing
procedures of registration, statements, applications and
reports for various classes of securities, persons and matters
within his or her jurisdiction and defining any terms, whether
or not used in this Act, insofar as the definitions are not
inconsistent with this Act. The rules and regulations adopted
by the Secretary of State under this Act shall be effective in
the manner provided for in the Illinois Administrative
Procedure Act.
    (2) Among other things, the Secretary of State shall have
authority, for the purposes of this Act, to prescribe the form
or forms in which required information shall be set forth,
accounting practices, the items or details to be shown in
balance sheets and earning statements, and the methods to be
followed in the preparation of accounts, in the appraisal or
valuation of assets and liabilities, in the determination of
depreciation and depletion, in the differentiation of
recurring and non-recurring income, in the differentiation of
investment and operating income, and in the preparation of
consolidated balance sheets or income accounts of any person,
directly or indirectly, controlling or controlled by the
issuer, or any person under direct or indirect common control
with the issuer.
    (3) No provision of this Act imposing any liability shall
apply to any act done or omitted in good faith in conformity
with any rule or regulation of the Secretary of State under
this Act, notwithstanding that the rule or regulation may,
after the act or omission, be amended or rescinded or be
determined by judicial or other authority to be invalid for any
reason.
    (4) The Securities Department of the Office of the
Secretary of State shall be deemed a criminal justice agency
for purposes of all federal and state laws and regulations and,
in that capacity, shall be entitled to access to any
information available to criminal justice agencies and has the
power to appoint special agents to conduct all investigations,
searches, seizures, arrests, and other duties imposed under the
provisions of any law administered by the Department. The
special agents have and may exercise all the powers of peace
officers solely for the purpose of enforcing provisions of this
Act.
    The Director must authorize to each special agent employed
under this Section a distinct badge that, on its face, (i)
clearly states that the badge is authorized by the Department
and (ii) contains a unique and identifying number.
    Special agents shall comply with all training requirements
established for law enforcement officers by provisions of the
Illinois Police Training Act.
    (5) The Secretary of State, by rule, may conditionally or
unconditionally exempt any person, security, or transaction,
or any class or classes of persons, securities, or transactions
from any provision of Section 5, 6, 7, 8, 8a, or 9 of this Act
or of any rule promulgated under these Sections, to the extent
that such exemption is necessary or appropriate in the public
interest, and is consistent with the protection of investors.
    B. The Secretary of State may, anything in this Act to the
contrary notwithstanding, require financial statements and
reports of the issuer, dealer, internet portal, salesperson,
investment adviser, or investment adviser representative as
often as circumstances may warrant. In addition, the Secretary
of State may secure information or books and records from or
through others and may make or cause to be made investigations
respecting the business, affairs, and property of the issuer of
securities, any person involved in the sale or offer for sale,
purchase or offer to purchase of any mineral investment
contract, mineral deferred delivery contract, or security and
of dealers, internet portals, salespersons, investment
advisers, and investment adviser representatives that are
registered or are the subject of an application for
registration under this Act. The costs of an investigation
shall be borne by the registrant or the applicant, provided
that the registrant or applicant shall not be obligated to pay
the costs without his, her or its consent in advance.
    C. Whenever it shall appear to the Secretary of State,
either upon complaint or otherwise, that this Act, or any rule
or regulation prescribed under authority thereof, has been or
is about to be violated, he or she may, in his or her
discretion, do one or more of the following:
        (1) require or permit the person to file with the
    Secretary of State a statement in writing under oath, or
    otherwise, as to all the facts and circumstances concerning
    the subject matter which the Secretary of State believes to
    be in the public interest to investigate, audit, examine,
    or inspect;
        (2) conduct an investigation, audit, examination, or
    inspection as necessary or advisable for the protection of
    the interests of the public; and
        (3) appoint investigators to conduct all
    investigations, searches, seizures, arrests, and other
    duties imposed under the provisions of any law administered
    by the Department. The Director must authorize to each
    investigator employed under this Section a distinct badge
    that, on its face, (i) clearly states that the badge is
    authorized by the Department and (ii) contains a unique and
    identifying number.
    D. (1) For the purpose of all investigations, audits,
examinations, or inspections which in the opinion of the
Secretary of State are necessary and proper for the enforcement
of this Act, the Secretary of State or a person designated by
him or her is empowered to administer oaths and affirmations,
subpoena witnesses, take evidence, and require, by subpoena or
other lawful means provided by this Act or the rules adopted by
the Secretary of State, the production of any books and
records, papers, or other documents which the Secretary of
State or a person designated by him or her deems relevant or
material to the inquiry.
    (2) The Secretary of State or a person designated by him or
her is further empowered to administer oaths and affirmations,
subpoena witnesses, take evidence, and require the production
of any books and records, papers, or other documents in this
State at the request of a securities agency of another state,
if the activities constituting the alleged violation for which
the information is sought would be in violation of Section 12
of this Act if the activities had occurred in this State.
    (3) The Circuit Court of any County of this State, upon
application of the Secretary of State or a person designated by
him or her may order the attendance of witnesses, the
production of books and records, papers, accounts and documents
and the giving of testimony before the Secretary of State or a
person designated by him or her; and any failure to obey the
order may be punished by the Circuit Court as a contempt
thereof.
    (4) The fees of subpoenaed witnesses under this Act for
attendance and travel shall be the same as fees of witnesses
before the Circuit Courts of this State, to be paid when the
witness is excused from further attendance, provided, the
witness is subpoenaed at the instance of the Secretary of
State; and payment of the fees shall be made and audited in the
same manner as other expenses of the Secretary of State.
    (5) Whenever a subpoena is issued at the request of a
complainant or respondent as the case may be, the Secretary of
State may require that the cost of service and the fee of the
witness shall be borne by the party at whose instance the
witness is summoned.
    (6) The Secretary of State shall have power at his or her
discretion, to require a deposit to cover the cost of the
service and witness fees and the payment of the legal witness
fee and mileage to the witness served with subpoena.
    (7) A subpoena issued under this Act shall be served in the
same manner as a subpoena issued out of a circuit court.
    (8) The Secretary of State may in any investigation,
audits, examinations, or inspections cause the taking of
depositions of persons residing within or without this State in
the manner provided in civil actions under the laws of this
State.
    E. Anything in this Act to the contrary notwithstanding:
        (1) If the Secretary of State shall find that the offer
    or sale or proposed offer or sale or method of offer or
    sale of any securities by any person, whether exempt or
    not, in this State, is fraudulent, or would work or tend to
    work a fraud or deceit, or is being offered or sold in
    violation of Section 12, or there has been a failure or
    refusal to submit any notification filing or fee required
    under this Act, the Secretary of State may by written order
    prohibit or suspend the offer or sale of securities by that
    person or deny or revoke the registration of the securities
    or the exemption from registration for the securities.
        (2) If the Secretary of State shall find that any
    person has violated subsection C, D, E, F, G, H, I, J, or K
    of Section 12 of this Act, the Secretary of State may by
    written order temporarily or permanently prohibit or
    suspend the person from offering or selling any securities,
    any mineral investment contract, or any mineral deferred
    delivery contract in this State, provided that any person
    who is the subject of an order of permanent prohibition may
    petition the Secretary of State for a hearing to present
    evidence of rehabilitation or change in circumstances
    justifying the amendment or termination of the order of
    permanent prohibition.
        (3) If the Secretary of State shall find that any
    person is engaging or has engaged in the business of
    selling or offering for sale securities as a dealer,
    internet portal, or salesperson or is acting or has acted
    as an investment adviser, investment adviser
    representative, or federal covered investment adviser,
    without prior thereto and at the time thereof having
    complied with the registration or notice filing
    requirements of this Act, the Secretary of State may by
    written order prohibit or suspend the person from engaging
    in the business of selling or offering for sale securities,
    or acting as an investment adviser, investment adviser
    representative, or federal covered investment adviser, in
    this State.
        (4) In addition to any other sanction or remedy
    contained in this subsection E, the Secretary of State,
    after finding that any provision of this Act has been
    violated, may impose a fine as provided by rule, regulation
    or order not to exceed $10,000 for each violation of this
    Act, may issue an order of public censure against the
    violator, and may charge as costs of investigation all
    reasonable expenses, including attorney's fees and witness
    fees.
    F. (1) The Secretary of State shall not deny, suspend or
revoke the registration of securities, suspend or revoke the
registration of a dealer, internet portal, salesperson,
investment adviser, or investment adviser representative,
prohibit or suspend the offer or sale of any securities,
prohibit or suspend any person from offering or selling any
securities in this State, prohibit or suspend a dealer or
salesperson from engaging in the business of selling or
offering for sale securities, prohibit or suspend a person from
acting as an investment adviser or federal covered investment
adviser, or investment adviser representative, impose any fine
for violation of this Act, issue an order of public censure, or
enter into an agreed settlement except after an opportunity for
hearing upon not less than 10 days notice given by personal
service or registered mail or certified mail, return receipt
requested, to the person or persons concerned. Such notice
shall state the date and time and place of the hearing and
shall contain a brief statement of the proposed action of the
Secretary of State and the grounds for the proposed action. A
failure to appear at the hearing or otherwise respond to the
allegations set forth in the notice of hearing shall constitute
an admission of any facts alleged therein and shall constitute
sufficient basis to enter an order.
    (2) Anything herein contained to the contrary
notwithstanding, the Secretary of State may temporarily
prohibit or suspend, for a maximum period of 90 days, by an
order effective immediately, the offer or sale or registration
of securities, the registration of a dealer, internet portal,
salesperson, investment adviser, or investment adviser
representative, or the offer or sale of securities by any
person, or the business of rendering investment advice, without
the notice and prior hearing in this subsection prescribed, if
the Secretary of State shall in his or her opinion, based on
credible evidence, deem it necessary to prevent an imminent
violation of this Act or to prevent losses to investors which
the Secretary of State reasonably believes will occur as a
result of a prior violation of this Act. Immediately after
taking action without such notice and hearing, the Secretary of
State shall deliver a copy of the temporary order to the
respondent named therein by personal service or registered mail
or certified mail, return receipt requested. The temporary
order shall set forth the grounds for the action and shall
advise that the respondent may request a hearing, that the
request for a hearing will not stop the effectiveness of the
temporary order and that respondent's failure to request a
hearing within 30 days after the date of the entry of the
temporary order shall constitute an admission of any facts
alleged therein and shall constitute sufficient basis to make
the temporary order final. Any provision of this paragraph (2)
to the contrary notwithstanding, the Secretary of State may not
pursuant to the provisions of this paragraph (2) suspend the
registration of a dealer, limited Canadian dealer,
salesperson, investment adviser, or investment adviser
representative based upon sub-paragraph (n) of paragraph (l) of
subsection E of Section 8 of this Act or revoke the
registration of securities or revoke the registration of any
dealer, salesperson, investment adviser representative, or
investment adviser.
    (3) The Secretary of State may issue a temporary order
suspending or delaying the effectiveness of any registration of
securities under subsection A or B of Section 5, 6 or 7 of this
Act subsequent to and upon the basis of the issuance of any
stop, suspension or similar order by the Securities and
Exchange Commission with respect to the securities which are
the subject of the registration under subsection A or B of
Section 5, 6 or 7 of this Act, and the order shall become
effective as of the date and time of effectiveness of the
Securities and Exchange Commission order and shall be vacated
automatically at such time as the order of the Securities and
Exchange Commission is no longer in effect.
    (4) When the Secretary of State finds that an application
for registration as a dealer, internet portal, salesperson,
investment adviser, or investment adviser representative
should be denied, the Secretary of State may enter an order
denying the registration. Immediately after taking such
action, the Secretary of State shall deliver a copy of the
order to the respondent named therein by personal service or
registered mail or certified mail, return receipt requested.
The order shall state the grounds for the action and that the
matter will be set for hearing upon written request filed with
the Secretary of State within 30 days after the receipt of the
request by the respondent. The respondent's failure to request
a hearing within 30 days after receipt of the order shall
constitute an admission of any facts alleged therein and shall
make the order final. If a hearing is held, the Secretary of
State shall affirm, vacate, or modify the order.
    (5) The findings and decision of the Secretary of State
upon the conclusion of each final hearing held pursuant to this
subsection shall be set forth in a written order signed on
behalf of the Secretary of State by his or her designee and
shall be filed as a public record. All hearings shall be held
before a person designated by the Secretary of State, and
appropriate records thereof shall be kept.
    (6) Notwithstanding the foregoing, the Secretary of State,
after notice and opportunity for hearing, may at his or her
discretion enter into an agreed settlement, stipulation or
consent order with a respondent in accordance with the
provisions of the Illinois Administrative Procedure Act. The
provisions of the agreed settlement, stipulation or consent
order shall have the full force and effect of an order issued
by the Secretary of State.
    (7) Anything in this Act to the contrary notwithstanding,
whenever the Secretary of State finds that a person is
currently expelled from, refused membership in or association
with, or limited in any material capacity by a self-regulatory
organization registered under the Federal 1934 Act or the
Federal 1974 Act because of a fraudulent or deceptive act or a
practice in violation of a rule, regulation, or standard duly
promulgated by the self-regulatory organization, the Secretary
of State may, at his or her discretion, enter a Summary Order
of Prohibition, which shall prohibit the offer or sale of any
securities, mineral investment contract, or mineral deferred
delivery contract by the person in this State. The order shall
take effect immediately upon its entry. Immediately after
taking the action the Secretary of State shall deliver a copy
of the order to the named Respondent by personal service or
registered mail or certified mail, return receipt requested. A
person who is the subject of an Order of Prohibition may
petition the Secretary of State for a hearing to present
evidence of rehabilitation or change in circumstances
justifying the amendment or termination of the Order of
Prohibition.
    G. No administrative action shall be brought by the
Secretary of State for relief under this Act or upon or because
of any of the matters for which relief is granted by this Act
after the earlier to occur of (i) 3 years from the date upon
which the Secretary of State had notice of facts which in the
exercise of reasonable diligence would lead to actual knowledge
of the alleged violation of the Act, or (ii) 5 years from the
date on which the alleged violation occurred.
    H. The action of the Secretary of State in denying,
suspending, or revoking the registration of a dealer, internet
portal, limited Canadian dealer, salesperson, investment
adviser, or investment adviser representative, in prohibiting
any person from engaging in the business of offering or selling
securities as a dealer, limited Canadian dealer, or
salesperson, in prohibiting or suspending the offer or sale of
securities by any person, in prohibiting a person from acting
as an investment adviser, federal covered investment adviser,
or investment adviser representative, in denying, suspending,
or revoking the registration of securities, in prohibiting or
suspending the offer or sale or proposed offer or sale of
securities, in imposing any fine for violation of this Act, or
in issuing any order shall be subject to judicial review in the
Circuit Courts of Cook or Sangamon Counties in this State. The
Administrative Review Law shall apply to and govern every
action for the judicial review of final actions or decisions of
the Secretary of State under this Act.
    I. Notwithstanding any other provisions of this Act to the
contrary, whenever it shall appear to the Secretary of State
that any person is engaged or about to engage in any acts or
practices which constitute or will constitute a violation of
this Act or of any rule or regulation prescribed under
authority of this Act, the Secretary of State may at his or her
discretion, through the Attorney General take any of the
following actions:
        (1) File a complaint and apply for a temporary
    restraining order without notice, and upon a proper showing
    the court may enter a temporary restraining order without
    bond, to enforce this Act.
        (2) File a complaint and apply for a preliminary or
    permanent injunction, and, after notice and a hearing and
    upon a proper showing, the court may grant a preliminary or
    permanent injunction and may order the defendant to make an
    offer of rescission with respect to any sales or purchases
    of securities, mineral investment contracts, or mineral
    deferred delivery contracts determined by the court to be
    unlawful under this Act.
        (3) Seek the seizure of assets when probable cause
    exists that the assets were obtained by a defendant through
    conduct in violation of Section 12, paragraph F, G, I, J,
    K, or L of this Act, and thereby subject to a judicial
    forfeiture hearing as required under this Act.
            (a) In the event that such probable cause exists
        that the subject of an investigation who is alleged to
        have committed one of the relevant violations of this
        Act has in his possession assets obtained as a result
        of the conduct giving rise to the violation, the
        Secretary of State may seek a seizure warrant in any
        circuit court in Illinois.
            (b) In seeking a seizure warrant, the Secretary of
        State, or his or her designee, shall submit to the
        court a sworn affidavit detailing the probable cause
        evidence for the seizure, the location of the assets to
        be seized, the relevant violation under Section 12 of
        this Act, and a statement detailing any known owners or
        interest holders in the assets.
            (c) Seizure of the assets shall be made by any
        peace officer upon process of the seizure warrant
        issued by the court. Following the seizure of assets
        under this Act and pursuant to a seizure warrant,
        notice of seizure, including a description of the
        seized assets, shall immediately be returned to the
        issuing court. Seized assets shall be maintained
        pending a judicial forfeiture hearing in accordance
        with the instructions of the court.
            (d) In the event that management of seized assets
        becomes necessary to prevent the devaluation,
        dissipation, or otherwise to preserve the property,
        the court shall have jurisdiction to appoint a
        receiver, conservator, ancillary receiver, or
        ancillary conservator for that purpose, as provided in
        item (2) of this subsection.
        (4) Seek the forfeiture of assets obtained through
    conduct in violation of Section 12, paragraph F, G, H, I,
    J, K, or L when authorized by law. A forfeiture must be
    ordered by a circuit court or an action brought by the
    Secretary of State as provided for in this Act, under a
    verified complaint for forfeiture.
            (a) In the event assets have been seized pursuant
        to this Act, forfeiture proceedings shall be
        instituted by the Attorney General within 45 days of
        seizure.
            (b) Service of the complaint filed under the
        provisions of this Act shall be made in the manner as
        provided in civil actions in this State.
            (c) Only an owner of or interest holder in the
        property may file an answer asserting a claim against
        the property. For purposes of this Section, the owner
        or interest holder shall be referred to as claimant.
            (d) The answer must be signed by the owner or
        interest holder under penalty of perjury and must set
        forth:
                (i) the caption of the proceedings as set forth
            on the notice of pending forfeiture and the name of
            the claimant;
                (ii) the address at which the claimant will
            accept mail;
                (iii) the nature and extent of the claimant's
            interest in the property;
                (iv) the date, identity of the transferor, and
            circumstances of the claimant's acquisition of the
            interest in the property;
                (v) the name and address of all other persons
            known to have an interest in the property;
                (vi) the specific provisions of this Act
            relied on in asserting that the property is not
            subject to forfeiture;
                (vii) all essential facts supporting each
            assertion; and
                (viii) the precise relief sought.
            (e) The answer must be filed with the court within
        45 days after service of the complaint.
            (f) A property interest is exempt from forfeiture
        under this Act if its owner or interest holder
        establishes by a preponderance of evidence that the
        owner or interest holder:
                (i) is not legally accountable for the conduct
            giving rise to the forfeiture, did not acquiesce in
            it, and did not know and could not reasonably have
            known of the conduct or that the conduct was likely
            to occur;
                (ii) with respect to conveyances, did not hold
            the property jointly or in common with a person
            whose conduct gave rise to the forfeiture;
                (iii) does not hold the property for the
            benefit of or as a nominee for any person whose
            conduct gave rise to its forfeiture and the owner
            or interest holder acquires it as a bona fide
            purchaser for value without knowingly taking part
            in the conduct giving rise to the forfeiture; or
                (iv) acquired the interest after the
            commencement of the conduct giving rise to its
            forfeiture and the owner or interest holder
            acquired the interest as a mortgagee, secured
            creditor, lienholder, or bona fide purchaser for
            value without knowledge of the conduct that gave
            rise to the forfeiture.
            (g) The hearing must be held within 60 days after
        the answer is filed unless continued for good cause.
            (h) During the probable cause portion of the
        judicial in rem proceeding wherein the Secretary of
        State presents its case-in-chief, the court must
        receive and consider, among other things, any relevant
        hearsay evidence and information. The laws of evidence
        relating to civil actions shall apply to all other
        portions of the judicial in rem proceeding.
            (i) The Secretary of State shall show the existence
        of probable cause for forfeiture of the property. If
        the Secretary of State shows probable cause, the
        claimant has the burden of showing by a preponderance
        of the evidence that the claimant's interest in the
        property is not subject to forfeiture.
            (j) If the Secretary of State does not show the
        existence of probable cause or a claimant has an
        interest that is exempt under subdivision I (4)(d) of
        this Section, the court shall order the interest in the
        property returned or conveyed to the claimant and shall
        order all other property forfeited to the Secretary of
        State pursuant to all provisions of this Act. If the
        Secretary of State does show the existence of probable
        cause and the claimant does not establish by a
        preponderance of the evidence that the claimant has an
        interest that is exempt under subsection D herein, the
        court shall order all the property forfeited to the
        Secretary of State pursuant to the provisions of the
        Section.
            (k) A defendant convicted in any criminal
        proceeding is precluded from later denying the
        essential allegations of the criminal offense of which
        the defendant was convicted in any proceeding for
        violations of the Act giving rise to forfeiture of
        property herein regardless of the pendency of an appeal
        from that conviction. However, evidence of the
        pendency of an appeal is admissible.
            (l) An acquittal or dismissal in a criminal
        proceeding for violations of the Act giving rise to the
        forfeiture of property herein shall not preclude civil
        proceedings under this provision; however, for good
        cause shown, on a motion by the Secretary of State, the
        court may stay civil forfeiture proceedings during the
        criminal trial for a related criminal indictment or
        information alleging violation of the provisions of
        Section 12 of the Illinois Securities Law of 1953.
        Property subject to forfeiture under this Section
        shall not be subject to return or release by a court
        exercising jurisdiction over a criminal case involving
        the seizure of the property unless the return or
        release is consented to by the Secretary of State.
            (m) All property declared forfeited under this Act
        vests in the State on the commission of the conduct
        giving rise to forfeiture together with the proceeds of
        the property after that time. Any such property or
        proceeds subsequently transferred to any person remain
        subject to forfeiture and thereafter shall be ordered
        forfeited unless the transferee claims and establishes
        in a hearing under the provisions of this Act that the
        transferee's interest is exempt under the Act. Any
        assets forfeited to the State shall be disposed of in
        following manner:
                (i) all forfeited property and assets shall be
            liquidated by the Secretary of State in accordance
            with all laws and rules governing the disposition
            of such property;
                (ii) the Secretary of State shall provide the
            court at the time the property and assets are
            declared forfeited a verified statement of
            investors subject to the conduct giving rise to the
            forfeiture;
                (iii) after payment of any costs of sale,
            receivership, storage, or expenses for
            preservation of the property seized, other costs
            to the State, and payment to claimants for any
            amount deemed exempt from forfeiture, the proceeds
            from liquidation shall be distributed pro rata to
            investors subject to the conduct giving rise to the
            forfeiture; and
                (iv) any proceeds remaining after all verified
            investors have been made whole shall be
            distributed 25% to the Securities Investors
            Education Fund, 25% to the Securities Audit and
            Enforcement Fund, 25% to the Attorney General or
            any State's Attorney bringing criminal charges for
            the conduct giving rise to the forfeiture, and 25%
            to other law enforcement agencies participating in
            the investigation of the criminal charges for the
            conduct giving rise to the forfeiture. In the event
            that no other law enforcement agencies are
            involved in the investigation of the conduct
            giving rise to the forfeiture, then the portion to
            other law enforcement agencies shall be
            distributed to the Securities Investors Education
            Fund.
            (n) The Secretary of State shall notify by
        certified mail, return receipt requested, all known
        investors in the matter giving rise to the forfeiture
        of the forfeiture proceeding and sale of assets
        forfeited arising from the violations of this Act, and
        shall further publish notice in a paper of general
        circulation in the district in which the violations
        were prosecuted. The notice to investors shall
        identify the name, address, and other identifying
        information about any defendant prosecuted for
        violations of this Act that resulted in forfeiture and
        sale of property, the offense for which the defendant
        was convicted, and that the court has ordered
        forfeiture and sale of property for claims of investors
        who incurred losses or damages as a result of the
        violations. Investors may then file a claim in a form
        prescribed by the Secretary of State in order to share
        in disbursement of the proceeds from sale of the
        forfeited property. Investor claims must be filed with
        the Secretary of State within 30 days after receipt of
        the certified mail return receipt, or within 30 days
        after the last date of publication of the general
        notice in a paper of general circulation in the
        district in which the violations were prosecuted,
        whichever occurs last.
            (o) A civil action under this subsection must be
        commenced within 5 years after the last conduct giving
        rise to the forfeiture became known or should have
        become known or 5 years after the forfeitable property
        is discovered, whichever is later, excluding time
        during which either the property or claimant is out of
        this State or in confinement or during which criminal
        proceedings relating to the same conduct are in
        progress.
            (p) If property is seized for evidence and for
        forfeiture, the time periods for instituting judicial
        forfeiture proceedings shall not begin until the
        property is no longer necessary for evidence.
            (q) Notwithstanding other provisions of this Act,
        the Secretary of State and a claimant of forfeitable
        property may enter into an agreed-upon settlement
        concerning the forfeitable property in such an amount
        and upon such terms as are set out in writing in a
        settlement agreement.
            (r) Nothing in this Act shall apply to property
        that constitutes reasonable bona fide attorney's fees
        paid to an attorney for services rendered or to be
        rendered in the forfeiture proceeding or criminal
        proceeding relating directly thereto when the property
        was paid before its seizure and before the issuance of
        any seizure warrant or court order prohibiting
        transfer of the property and when the attorney, at the
        time he or she received the property, did not know that
        it was property subject to forfeiture under this Act.
    The court shall further have jurisdiction and authority, in
addition to the penalties and other remedies in this Act
provided, to enter an order for the appointment of the court or
a person as a receiver, conservator, ancillary receiver or
ancillary conservator for the defendant or the defendant's
assets located in this State, or to require restitution,
damages or disgorgement of profits on behalf of the person or
persons injured by the act or practice constituting the subject
matter of the action, and may assess costs against the
defendant for the use of the State; provided, however, that the
civil remedies of rescission and appointment of a receiver,
conservator, ancillary receiver or ancillary conservator shall
not be available against any person by reason of the failure to
file with the Secretary of State, or on account of the contents
of, any report of sale provided for in subsection G or P of
Section 4, paragraph (2) of subsection D of Sections 5 and 6,
or paragraph (2) of subsection F of Section 7 of this Act.
Appeals may be taken as in other civil cases.
    J. In no case shall the Secretary of State, or any of his
or her employees or agents, in the administration of this Act,
incur any official or personal liability by instituting an
injunction or other proceeding or by denying, suspending or
revoking the registration of a dealer or salesperson, or by
denying, suspending or revoking the registration of securities
or prohibiting the offer or sale of securities, or by
suspending or prohibiting any person from acting as a dealer,
limited Canadian dealer, salesperson, investment adviser, or
investment adviser representative or from offering or selling
securities.
    K. No provision of this Act shall be construed to require
or to authorize the Secretary of State to require any
investment adviser or federal covered investment adviser
engaged in rendering investment supervisory services to
disclose the identity, investments, or affairs of any client of
the investment adviser or federal covered investment adviser,
except insofar as the disclosure may be necessary or
appropriate in a particular proceeding or investigation having
as its object the enforcement of this Act.
    L. Whenever, after an examination, investigation or
hearing, the Secretary of State deems it of public interest or
advantage, he or she may certify a record to the State's
Attorney of the county in which the act complained of, examined
or investigated occurred. The State's Attorney of that county
within 90 days after receipt of the record shall file a written
statement at the Office of the Secretary of State, which
statement shall set forth the action taken upon the record, or
if no action has been taken upon the record that fact, together
with the reasons therefor, shall be stated.
    M. The Secretary of State may initiate, take, pursue, or
prosecute any action authorized or permitted under Section 6d
of the Federal 1974 Act.
    N. (1) Notwithstanding any provision of this Act to the
contrary, to encourage uniform interpretation, administration,
and enforcement of the provisions of this Act, the Secretary of
State may cooperate with the securities agencies or
administrators of one or more states, Canadian provinces or
territories, or another country, the Securities and Exchange
Commission, the Commodity Futures Trading Commission, the
Securities Investor Protection Corporation, any
self-regulatory organization, and any governmental law
enforcement or regulatory agency.
    (2) The cooperation authorized by paragraph (1) of this
subsection includes, but is not limited to, the following:
        (a) establishing or participating in a central
    depository or depositories for registration under this Act
    and for documents or records required under this Act;
        (b) making a joint audit, inspection, examination, or
    investigation;
        (c) holding a joint administrative hearing;
        (d) filing and prosecuting a joint civil or criminal
    proceeding;
        (e) sharing and exchanging personnel;
        (f) sharing and exchanging information and documents;
    or
        (g) issuing any joint statement or policy.
(Source: P.A. 92-308, eff. 1-1-02; 93-580, eff. 8-21-03.)
 
    (815 ILCS 5/11a)  (from Ch. 121 1/2, par. 137.11a)
    Sec. 11a. Fees.
    (1) The Secretary of State shall by rule or regulation
impose and shall collect reasonable fees necessary for the
administration of this Act including, but not limited to, fees
for the following purposes:
        (a) filing an application pursuant to paragraph (2) of
    subsection F of Section 4 of this Act;
        (b) examining an application and report pursuant to
    paragraph (2) of subsection F of Section 4 of this Act;
        (c) filing a report pursuant to subsection G of Section
    4 of this Act, determined in accordance with paragraph (4)
    of subsection G of Section 4 of this Act;
        (d) examining an offering sheet pursuant to subsection
    P of Section 4 of this Act;
        (e) filing a report pursuant to subsection P of Section
    4, determined in accordance with subsection P of Section 4
    of this Act;
        (f) examining an application to register securities
    under subsection B of Section 5 of this Act;
        (g) examining an amended or supplemental prospectus
    filed pursuant to the undertaking required by
    sub-paragraph (i) of paragraph (2) of subsection B of
    Section 5 of this Act;
        (h) registering or renewing registration of securities
    under Section 5, determined in accordance with subsection C
    of Section 5 of this Act;
        (i) registering securities in excess of the amount
    initially registered, determined in accordance with
    paragraph (2) of subsection C of Section 5 of this Act;
        (j) failure to file timely an application for renewal
    under subsection E of Section 5 of this Act;
        (k) failure to file timely any document or information
    required under Section 5 of this Act;
        (l) examining an application to register face amount
    certificate contracts under subsection B of Section 6 of
    this Act;
        (m) examining an amended or supplemental prospectus
    filed pursuant to the undertaking required by
    sub-paragraph (f) of paragraph (2) of subsection B of
    Section 6 of this Act;
        (n) registering or renewing registration of face
    amount certificate contracts under Section 6 of this Act;
        (o) amending a registration of face amount certificate
    contracts pursuant to subsection E of Section 6 of this Act
    to add any additional series, type or class of contract;
        (p) failure to file timely an application for renewal
    under subsection F of Section 6 of this Act;
        (q) adding to or withdrawing from deposits with respect
    to face amount certificate contracts pursuant to
    subsection H of Section 6, a transaction charge payable at
    the times and in the manner specified in subsection H of
    Section 6 (which transaction charge shall be in addition to
    the annual fee called for by subsection H of Section 6 of
    this Act);
        (r) failure to file timely any document or information
    required under Section 6 of this Act;
        (s) examining an application to register investment
    fund shares under subsection B of Section 7 of this Act;
        (t) examining an amended or supplemental prospectus
    filed pursuant to the undertaking required by
    sub-paragraph (f) of paragraph (2) of subsection B of
    Section 7 of this Act;
        (u) registering or renewing registration of investment
    fund shares under Section 7 of this Act;
        (v) amending a registration of investment fund shares
    pursuant to subsection D of Section 7 of this Act to
    register an additional class or classes of investment fund
    shares;
        (w) failure to file timely an application for renewal
    under paragraph (l) of subsection G of Section 7 of this
    Act;
        (x) examining an application for renewal of
    registration of investment fund shares under paragraph (2)
    of subsection G of Section 7 of this Act;
        (y) failure to file timely any document or information
    required under Section 7 of this Act;
        (z) filing an application for registration or
    re-registration of a dealer or limited Canadian dealer
    under Section 8 of this Act for each office in this State;
        (aa) in connection with an application for the
    registration or re-registration of a salesperson under
    Section 8 of or this Act, for the following purposes:
            (i) filing an application;
            (ii) a Securities Audit and Enforcement Fund fee;
        and
            (iii) a notification filing of federal covered
        investment advisers;
        (bb) in connection with an application for the
    registration or re-registration of an investment adviser
    under Section 8 of this Act;
        (cc) failure to file timely any document or information
    required under Section 8 of this Act;
        (dd) filing a consent to service of process under
    Section 10 of this Act;
        (ee) issuing a certificate pursuant to subsection B of
    Section 15 of this Act;
        (ff) issuing a certified copy pursuant to subsection C
    of Section 15 of this Act;
        (gg) issuing a non-binding statement pursuant to
    Section 15a of this Act;
        (hh) filings by Notification under Section 2a;
        (ii) notification filing of federal Regulation D,
    Section 506 offering under the Federal 1933 Act;
        (jj) notification filing of securities and closed-end
    investment company securities;
        (kk) notification filing of face amount certificate
    contracts;
        (ll) notification filing of open-end investment
    company securities;
        (mm) filing a report pursuant to subsection D of
    Section 4 of this Act;
        (nn) in connection with the filing of an application
    for registration or re-registration of an investment
    adviser representative under subsection D of Section 8 of
    this Act; .
        (oo) filing a notice pursuant to paragraph (6) of
    subsection T of Section 4 of this Act; and
        (pp) applying for registration, or renewing
    registration, as a registered Internet portal pursuant to
    Section 8d of this Act.
    (2) The Secretary of State may, by rule or regulation,
raise or lower any fee imposed by, and which he or she is
authorized by law to collect under, this Act.
(Source: P.A. 90-70, eff. 7-8-97; 91-357, eff. 7-29-99; revised
12-11-14.)
 
    (815 ILCS 5/12)  (from Ch. 121 1/2, par. 137.12)
    Sec. 12. Violation. It shall be a violation of the
provisions of this Act for any person:
    A. To offer or sell any security except in accordance with
the provisions of this Act.
    B. To deliver to a purchaser any security required to be
registered under Section 5, Section 6 or Section 7 hereof
unless accompanied or preceded by a prospectus that meets the
requirements of the pertinent subsection of Section 5 or of
Section 6 or of Section 7.
    C. To act as a dealer, internet portal, salesperson,
investment adviser, or investment adviser representative,
unless registered as such, where such registration is required,
under the provisions of this Act.
    D. To fail to file with the Secretary of State any
application, report or document required to be filed under the
provisions of this Act or any rule or regulation made by the
Secretary of State pursuant to this Act or to fail to comply
with the terms of any order of the Secretary of State issued
pursuant to Section 11 hereof.
    E. To make, or cause to be made, (1) in any application,
report or document filed under this Act or any rule or
regulation made by the Secretary of State pursuant to this Act,
any statement which was false or misleading with respect to any
material fact or (2) any statement to the effect that a
security (other than a security issued by the State of
Illinois) has been in any way endorsed or approved by the
Secretary of State or the State of Illinois.
    F. To engage in any transaction, practice or course of
business in connection with the sale or purchase of securities
which works or tends to work a fraud or deceit upon the
purchaser or seller thereof.
    G. To obtain money or property through the sale of
securities by means of any untrue statement of a material fact
or any omission 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.
    H. To sign or circulate any statement, prospectus, or other
paper or document required by any provision of this Act or
pertaining to any security knowing or having reasonable grounds
to know any material representation therein contained to be
false or untrue.
    I. To employ any device, scheme or artifice to defraud in
connection with the sale or purchase of any security, directly
or indirectly.
    J. When acting as an investment adviser, investment adviser
representative, or federal covered investment adviser, by any
means or instrumentality, directly or indirectly:
        (1) To employ any device, scheme or artifice to defraud
    any client or prospective client;
        (2) To engage in any transaction, practice, or course
    of business which operates as a fraud or deceit upon any
    client or prospective client; or
        (3) To engage in any act, practice, or course of
    business which is fraudulent, deceptive or manipulative.
    The Secretary of State shall for the purposes of this
    paragraph (3), by rules and regulations, define and
    prescribe means reasonably designed to prevent such acts,
    practices, and courses of business as are fraudulent,
    deceptive, or manipulative.
    K. When offering or selling any mineral investment contract
or mineral deferred delivery contract:
        (1) To employ any device, scheme, or artifice to
    defraud any customer, prospective customer, or offeree;
        (2) To engage in any transaction, practice, or course
    of business that operates as a fraud or deceit upon any
    customer, prospective customer, or offeree; or
        (3) To engage in any act, practice, or course of
    business that is fraudulent, deceptive, or manipulative.
    The Secretary of State shall for the purposes of this
    paragraph (3), by rules and regulations, define and
    prescribe means reasonably designed to prevent acts,
    practices, and courses of business as are fraudulent,
    deceptive, or manipulative.
    L. To knowingly influence, coerce, manipulate, or mislead
any person engaged in the preparation or audit of financial
statements or appraisals to be used in the offer or sale of
securities for the purpose of rendering such financial
statements or appraisals materially misleading.
(Source: P.A. 93-580, eff. 8-21-03.)
 
    (815 ILCS 5/13)  (from Ch. 121 1/2, par. 137.13)
    Sec. 13. Private and other civil remedies; securities.
    A. Every sale of a security made in violation of the
provisions of this Act shall be voidable at the election of the
purchaser exercised as provided in subsection B of this
Section; and the issuer, controlling person, underwriter,
dealer or other person by or on behalf of whom said sale was
made, and each underwriter, dealer, internet portal, or
salesperson who shall have participated or aided in any way in
making the sale, and in case the issuer, controlling person,
underwriter, or dealer, or internet portal is a corporation or
unincorporated association or organization, each of its
officers and directors (or persons performing similar
functions) who shall have participated or aided in making the
sale, shall be jointly and severally liable to the purchaser as
follows:
        (1) for the full amount paid, together with interest
    from the date of payment for the securities sold at the
    rate of the interest or dividend stipulated in the
    securities sold (or if no rate is stipulated, then at the
    rate of 10% per annum) less any income or other amounts
    received by the purchaser on the securities, upon offer to
    tender to the seller or tender into court of the securities
    sold or, where the securities were not received, of any
    contract made in respect of the sale; or
        (2) if the purchaser no longer owns the securities, for
    the amounts set forth in clause (1) of this subsection A
    less any amounts received by the purchaser for or on
    account of the disposition of the securities.
    If the purchaser shall prevail in any action brought to
enforce any of the remedies provided in this subsection, the
court shall assess costs together with the reasonable fees and
expenses of the purchaser's attorney against the defendant. Any
provision of this subsection A to the contrary notwithstanding,
the civil remedies provided in this subsection A shall not be
available against any person by reason of the failure to file
with the Secretary of State, or on account of the content of,
any report of sale provided for in subsection G or P of Section
4, paragraph (2) of subsection D of Sections 5 and 6, or
paragraph (2) of subsection F of Section 7 of this Act.
    B. Notice of any election provided for in subsection A of
this Section shall be given by the purchaser within 6 months
after the purchaser shall have knowledge that the sale of the
securities to him or her is voidable, to each person from whom
recovery will be sought, by registered mail or certified mail,
return receipt requested, addressed to the person to be
notified at his or her last known address with proper postage
affixed, or by personal service.
    C. No purchaser shall have any right or remedy under this
Section who shall fail, within 15 days from the date of receipt
thereof, to accept an offer to repurchase the securities
purchased by him or her for a price equal to the full amount
paid therefor plus interest thereon and less any income thereon
as set forth in subsection A of this Section. Every offer of
repurchase provided for in this subsection shall be in writing,
shall be delivered to the purchaser or sent by registered mail
or certified mail, return receipt requested, addressed to the
purchaser at his or her last known address, and shall offer to
repurchase the securities sold for a price equal to the full
amount paid therefor plus interest thereon and less any income
thereon as set forth in subsection A of this Section. Such
offer shall continue in force for 15 days from the date on
which it was received by the purchaser, shall advise the
purchaser of his or her rights and the period of time limited
for acceptance thereof, and shall contain such further
information, if any, as the Secretary of State may prescribe.
Any agreement not to accept or refusing or waiving any such
offer made during or prior to said 15 days shall be void.
    D. No action shall be brought for relief under this Section
or upon or because of any of the matters for which relief is
granted by this Section after 3 years from the date of sale;
provided, that if the party bringing the action neither knew
nor in the exercise of reasonable diligence should have known
of any alleged violation of subsection E, F, G, H, I or J of
Section 12 of this Act which is the basis for the action, the 3
year period provided herein shall begin to run upon the earlier
of:
        (1) the date upon which the party bringing the action
    has actual knowledge of the alleged violation of this Act;
    or
        (2) the date upon which the party bringing the action
    has notice of facts which in the exercise of reasonable
    diligence would lead to actual knowledge of the alleged
    violation of this Act.
    E. The term purchaser as used in this Section shall include
the personal representative or representatives of the
purchaser.
    F. Anything in this Act to the contrary notwithstanding and
in addition to all other remedies, the Secretary of State
through the Office of the Attorney General may bring an action
in any circuit court of the State of Illinois in the name and
on behalf of the State of Illinois against any person or
persons participating in or about to participate in a violation
of this Act to enjoin those persons who are continuing or doing
any act in violation of this Act or to enforce compliance with
this Act. Upon a proper showing the court may grant a permanent
or preliminary injunction or temporary restraining order
without bond, and may order the defendant to make an offer of
rescission of any sales or purchases of securities determined
by the court to be unlawful under this Act. The court shall
further have jurisdiction and authority, in addition to the
other penalties and remedies in this Act provided, to act or
appoint another person as a receiver, conservator, ancillary
receiver or ancillary conservator for the defendant or the
defendant's assets located in this State and may assess costs
against the defendant for the use of the State.
    G. (1) Whenever any person has engaged or is about to
engage in any act or practice constituting a violation of this
Act, any party in interest may bring an action in the circuit
court of the county in which the party in interest resides, or
where the person has his, her or its principal office or
registered office or where any part of the transaction has or
will take place, to enjoin that person from continuing or doing
any act in violation of or to enforce compliance with this Act.
Upon a proper showing, the court shall grant a permanent or
preliminary injunction or temporary restraining order or
rescission of any sales or purchases of securities determined
to be unlawful under this Act, and may assess costs of the
proceedings against the defendant.
    (2) A copy of the complaint shall be served upon the
Secretary of State within one business day of filing in the
form and manner prescribed by the Secretary of State by rule or
regulation; provided, that the failure to comply with this
provision shall not invalidate the action which is the subject
of the complaint.
    H. Any provision of this Section 13 to the contrary
notwithstanding, neither the civil remedies provided in
subsection A of this Section 13 nor the remedies of rescission
and appointment of a receiver, conservator, ancillary receiver
or ancillary conservator provided in subsection I of Section 11
of this Act and in subsections F and G of this Section 13 of
this Act nor the remedies of restitution, damages or
disgorgement of profits provided in subsection I of Section 11
of this Act shall be available against any person by reason of
the failure to file with the Secretary of State, or on account
of the contents of, any notice filing under Section 2a of this
Act or subsection C-5 of Section 8 of this Act or any report of
sale provided for in subsection G or P of Section 4, paragraph
(2) of subsection D of Sections 5 and 6, or paragraph (2) of
subsection F of Section 7 of this Act.
(Source: P.A. 98-174, eff. 8-5-13.)
 
    (815 ILCS 5/18.1)
    Sec. 18.1. Additional fees. In addition to any other fee
that the Secretary of State may impose and collect pursuant to
the authority contained in Sections 4, 8, and 11a of this Act,
beginning on July 1, 2003 the Secretary of State shall also
collect the following additional fees:
 
Securities offered or sold under the Uniform
Limited Offering Exemption Pursuant to
Section 4.D of the Act............................$100
Securities offered or sold under the Uniform
Limited Offering Exemption pursuant to subsection
T of Section 4 of this Act. $100
Registration and renewal of a dealer..............$300
Registration and renewal of a registered Internet
portal. $300
Registration and renewal of an investment adviser.$200
Federal covered investment adviser notification
filing and annual notification filing.............$200
Registration and renewal of a salesperson.........$75
Registration and renewal of an investment adviser
representative and a federal covered
investment adviser representative.................$75
    Investment fund shares notification filing and annual
notification filing: $800 plus $80 for each series, class, or
portfolio.
    All fees collected by the Secretary of State pursuant to
this amendatory Act of the 93rd General Assembly shall be
deposited into the General Revenue Fund in the State treasury.
(Source: P.A. 93-32, eff. 7-1-03.)