Full Text of HB2969 98th General Assembly
HB2969 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 HB2969 Introduced , by Rep. Mike Smiddy SYNOPSIS AS INTRODUCED: |
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815 ILCS 5/13 | from Ch. 121 1/2, par. 137.13 |
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Amends language in the Illinois Securities Law of 1953 providing that the 3-year period for seeking specified relief under the Act begins to run on the earlier of the date the party bringing the action has actual knowledge of the alleged violation or the date 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. Deletes language providing that the period of limitation may not be extended more than 2 years beyond the expiration of the 3-year period. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning business.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Securities Law of 1953 is amended | 5 | | by changing Section 13 as follows:
| 6 | | (815 ILCS 5/13) (from Ch. 121 1/2, par. 137.13)
| 7 | | Sec. 13. Private and other civil remedies; securities.
| 8 | | A. Every sale of a security made in
violation of the | 9 | | provisions of this Act shall be voidable at the
election of the | 10 | | purchaser exercised as provided in subsection B of this
| 11 | | Section; and the issuer, controlling person, underwriter,
| 12 | | dealer or other person by or on behalf of whom said sale was | 13 | | made, and
each underwriter, dealer or salesperson who shall | 14 | | have participated or
aided in any way in making the sale, and | 15 | | in case the
issuer, controlling person, underwriter or dealer | 16 | | is a corporation or
unincorporated association or | 17 | | organization, each of its officers and
directors (or persons | 18 | | performing similar functions) who shall have
participated or | 19 | | aided in making the sale, shall be jointly and
severally liable | 20 | | to the purchaser as follows:
| 21 | | (1) for the full amount paid,
together with interest | 22 | | from the date of payment for the securities sold
at the | 23 | | rate of the interest or dividend stipulated in the |
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| 1 | | securities
sold (or if no rate is stipulated, then at the | 2 | | rate of 10%
per annum) less any income or other amounts | 3 | | received by the
purchaser on the securities, upon offer to | 4 | | tender to the seller or
tender into court of
the securities | 5 | | sold or, where the securities were not received, of any
| 6 | | contract made in respect of the sale; or
| 7 | | (2) if the purchaser no longer
owns the securities, for | 8 | | the amounts set forth in clause (1) of this
subsection A | 9 | | less any amounts received by the purchaser for or on | 10 | | account
of the disposition of the securities.
| 11 | | If the purchaser shall
prevail in any action brought to | 12 | | enforce any of the remedies provided in
this subsection, the | 13 | | court shall assess costs together with the
reasonable fees and | 14 | | expenses of the purchaser's attorney against the defendant.
Any | 15 | | provision of this subsection A to the contrary
notwithstanding, | 16 | | the civil remedies provided in this subsection A shall not
be | 17 | | available against any person by reason of the failure to file | 18 | | with the
Secretary of State, or on account of the content of, | 19 | | any report of sale
provided for in subsection G or P of Section | 20 | | 4, paragraph (2) of
subsection D of Sections 5 and 6, or | 21 | | paragraph (2) of subsection F of
Section 7 of this Act.
| 22 | | B. Notice of any election provided for in subsection A of | 23 | | this
Section shall be given by the purchaser within 6
months | 24 | | after the purchaser shall have knowledge that the sale of the
| 25 | | securities to him or her is
voidable, to each person from whom | 26 | | recovery will be sought, by
registered mail or certified mail, |
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| 1 | | return receipt requested,
addressed to the person to be | 2 | | notified at his or her last
known address with proper postage | 3 | | affixed, or by personal service.
| 4 | | C. No purchaser shall have any right or remedy under this | 5 | | Section who shall
fail, within 15 days from the date of receipt | 6 | | thereof, to accept an offer to
repurchase the securities | 7 | | purchased by him or her for a price equal to the full
amount | 8 | | paid therefor plus interest thereon and less any income thereon | 9 | | as set
forth in subsection A of this Section. Every offer of | 10 | | repurchase provided for
in this subsection shall be in writing, | 11 | | shall be delivered to the purchaser or
sent by registered mail | 12 | | or certified mail, return receipt requested, addressed
to the | 13 | | purchaser at his or her last known address, and shall offer to
| 14 | | repurchase the securities sold for a price equal to the full | 15 | | amount paid
therefor plus interest thereon and less any income | 16 | | thereon as set forth in
subsection A of this Section. Such | 17 | | offer shall continue in force for 15 days
from the date on | 18 | | which it was received by the purchaser, shall advise the
| 19 | | purchaser of his or her rights and the period of time limited | 20 | | for
acceptance thereof, and shall contain such further | 21 | | information, if
any, as the Secretary of State may prescribe. | 22 | | Any agreement not to accept or
refusing or waiving any such | 23 | | offer made during or prior to said 15
days shall be void.
| 24 | | D. No action shall be brought for relief under this Section
| 25 | | or upon or because of any of the matters for which relief is | 26 | | granted by
this Section after 3 years from the date of sale; |
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| 1 | | provided, that if the
party bringing the action neither knew | 2 | | nor in the exercise of reasonable
diligence should have known | 3 | | of any alleged violation of subsection E, F, G,
H, I or J of | 4 | | Section 12 of this Act which is the basis for the action, the 3
| 5 | | year period provided herein shall begin to run upon the earlier | 6 | | of:
| 7 | | (1) the date upon which the party bringing the
action | 8 | | has actual knowledge of the alleged violation of this Act; | 9 | | or
| 10 | | (2) the date upon which the party bringing the action | 11 | | has
notice of facts
which in the exercise of reasonable | 12 | | diligence would lead to actual
knowledge of the alleged | 13 | | violation of this Act ; but in no event shall the
period of | 14 | | limitation so extended be more than 2 years beyond the
| 15 | | expiration of the 3 year period otherwise applicable .
| 16 | | E. The term purchaser as used in this Section shall include | 17 | | the
personal representative or representatives of the | 18 | | purchaser.
| 19 | | F. Anything in this Act to the contrary notwithstanding and | 20 | | in addition
to all other
remedies, the Secretary of State | 21 | | through
the Office of the Attorney General may bring an action | 22 | | in any circuit
court of the State of Illinois in the name and | 23 | | on behalf of the State of
Illinois against any person or | 24 | | persons participating in or about to
participate in a violation | 25 | | of this Act to enjoin those persons who are
continuing or doing | 26 | | any act in violation of this Act or to enforce
compliance with |
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| 1 | | this Act. Upon a proper showing the court may grant a
permanent | 2 | | or preliminary injunction or temporary restraining order
| 3 | | without bond, and may order the defendant to make an offer
of | 4 | | rescission of any sales or purchases of securities determined | 5 | | by the
court to be unlawful under this Act. The court shall | 6 | | further have
jurisdiction and authority, in addition to the | 7 | | other penalties and remedies
in this Act provided, to act or | 8 | | appoint another person as a receiver,
conservator, ancillary | 9 | | receiver or ancillary conservator for the defendant
or the | 10 | | defendant's assets located in this State and may assess costs
| 11 | | against the defendant for the use of the State.
| 12 | | G. (1) Whenever any person has engaged or is about to | 13 | | engage in any
act or practice constituting a violation of this | 14 | | Act, any party in
interest may bring an action in the circuit | 15 | | court of the county in which
the party in interest resides, or | 16 | | where the person has his, her or its
principal office or | 17 | | registered office or where any part of the transaction
has or | 18 | | will take place, to enjoin that person from continuing or doing | 19 | | any
act in violation of or to enforce compliance with this Act. | 20 | | Upon a proper
showing, the court shall grant a permanent or | 21 | | preliminary injunction or
temporary restraining order or | 22 | | rescission of any sales or purchases of
securities determined | 23 | | to be unlawful under this Act, and may assess costs
of the | 24 | | proceedings against the defendant.
| 25 | | (2) A copy of the complaint shall be served upon the
| 26 | | Secretary of State within one business day of filing in
the |
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| 1 | | form and manner prescribed by the Secretary of State by rule or
| 2 | | regulation; provided, that the failure to comply with this | 3 | | provision shall
not invalidate the action which is the subject | 4 | | of the complaint.
| 5 | | H. Any provision of this Section 13 to the contrary | 6 | | notwithstanding,
neither the civil remedies provided in | 7 | | subsection A of this Section 13 nor the
remedies of rescission | 8 | | and appointment of a receiver, conservator,
ancillary receiver | 9 | | or ancillary conservator provided in subsection I of
Section 11 | 10 | | of this Act and in subsections F and G
of this Section 13 of | 11 | | this Act nor the remedies of restitution, damages
or | 12 | | disgorgement of profits provided in subsection I of Section 11 | 13 | | of this
Act shall be available against any person
by reason of | 14 | | the failure to file with the Secretary of State, or on account
| 15 | | of the contents of, any notice filing under Section 2a of this | 16 | | Act or
subsection C-5 of Section 8 of this Act or any report of | 17 | | sale provided for in
subsection G or P of
Section 4, paragraph | 18 | | (2) of subsection D of Sections 5 and 6, or paragraph
(2) of | 19 | | subsection F of Section 7 of this Act.
| 20 | | (Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96; 90-70, | 21 | | eff.
7-8-97.)
| 22 | | Section 99. Effective date. This Act takes effect upon | 23 | | becoming law.
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