Full Text of HB2969 098th General Assembly
HB2969enr 98TH GENERAL ASSEMBLY |
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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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