Full Text of SB3439 101st General Assembly
SB3439 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 SB3439 Introduced 2/14/2020, by Sen. Rachelle Crowe SYNOPSIS AS INTRODUCED: |
| 815 ILCS 5/2.1 | from Ch. 121 1/2, par. 137.2-1 | 815 ILCS 5/8 | from Ch. 121 1/2, par. 137.8 | 815 ILCS 5/11 | from Ch. 121 1/2, par. 137.11 | 815 ILCS 5/11.7 new | | 815 ILCS 5/12 | from Ch. 121 1/2, par. 137.12 | 815 ILCS 5/12.5 new | | 815 ILCS 5/14 | from Ch. 121 1/2, par. 137.14 | 815 ILCS 5/2.14 rep. | |
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Amends the Illinois Securities Law of 1953. Eliminates reference to face amount certificate contracts. Provides that, in addition to existing disciplinary penalties, the registrations of dealers and advisers may be limited or conditioned for failure to comply with statutory requirements. Provides that administrative actions may be brought by the Secretary of State within 3 years from the time the Secretary of State had notice of facts that, in the exercise of reasonable diligence would lead to actual knowledge of the violation. Removes provision barring administrative actions 5 years after the date on which the alleged violation occurred. Establishes protections against the financial exploitation of persons 60 years of age or older and persons subject to the Illinois Adult Protective Services Act. Requires certain licensees to report incidents of potential exploitation.
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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 Sections 2.1, 8, 11, 12, and 14 and by adding | 6 | | Sections 11.7 and 12.5 as follows:
| 7 | | (815 ILCS 5/2.1) (from Ch. 121 1/2, par. 137.2-1)
| 8 | | Sec. 2.1. Security. "Security" means any note, stock, | 9 | | treasury stock,
bond, debenture, evidence of indebtedness, | 10 | | certificate of interest or
participation in any profit-sharing | 11 | | agreement, collateral-trust
certificate, preorganization | 12 | | certificate or subscription, transferable
share, investment | 13 | | contract, viatical investment, investment fund share, | 14 | | face-amount certificate,
voting-trust certificate, certificate | 15 | | of deposit
for a security, fractional
undivided interest in | 16 | | oil, gas or other mineral lease, right or royalty,
any put, | 17 | | call, straddle, option, or privilege on any security, | 18 | | certificate
of deposit, or group or index of securities | 19 | | (including any interest therein
or based on the value thereof), | 20 | | or any put, call, straddle, option, or
privilege entered into, | 21 | | relating to
foreign currency, or, in general, any interest or | 22 | | instrument commonly known
as a "security", or any certificate | 23 | | of interest or participation in,
temporary or interim |
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| 1 | | certificate for, receipt for, guarantee of, or warrant
or right | 2 | | to subscribe to or purchase, any of the foregoing.
"Security" | 3 | | does not mean a mineral investment contract or a mineral
| 4 | | deferred delivery contract; provided, however, the Department | 5 | | shall have
the authority to regulate these contracts as | 6 | | hereinafter provided.
| 7 | | (Source: P.A. 96-736, eff. 7-1-10 .)
| 8 | | (815 ILCS 5/8) (from Ch. 121 1/2, par. 137.8)
| 9 | | Sec. 8. Registration of dealers, limited Canadian dealers, | 10 | | Internet portals,
salespersons, investment advisers, and | 11 | | investment adviser representatives.
| 12 | | A. Except as otherwise provided in this subsection A, every | 13 | | dealer,
limited Canadian dealer, salesperson, investment | 14 | | adviser,
and investment adviser representative shall be | 15 | | registered as such with the
Secretary of State. No dealer or | 16 | | salesperson need be registered as such when
offering or selling | 17 | | securities in transactions
exempted by subsection A, B, C, D, | 18 | | E, G, H, I, J, K, M, O, P, Q, R or S of
Section 4 of this Act, | 19 | | provided that such dealer or salesperson is not
regularly | 20 | | engaged in the business of offering or selling securities
in | 21 | | reliance
upon the exemption set forth in subsection G or M of | 22 | | Section 4 of this Act. No
dealer, issuer or controlling person | 23 | | shall employ a salesperson unless such
salesperson is | 24 | | registered as such with the Secretary of State or is employed
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| 1 | | for the purpose of offering or selling securities solely in
| 2 | | transactions exempted by subsection A, B, C,
D, E, G, H, I, J, | 3 | | K, L, M, O, P, Q, R or S of Section 4 of this Act;
provided that | 4 | | such salesperson need not be registered when
effecting | 5 | | transactions in this State limited to those transactions | 6 | | described
in Section 15(h)(2) of the Federal 1934 Act or | 7 | | engaging in the
offer or sale of securities in respect of which | 8 | | he or she has beneficial
ownership and is a controlling person. | 9 | | The Secretary of State may, by
rule, regulation or order and | 10 | | subject to such terms, conditions, and
fees as
may be | 11 | | prescribed in such rule, regulation or order, exempt from the
| 12 | | registration requirements of this Section 8 any investment | 13 | | adviser, if the
Secretary of State shall find that such | 14 | | registration is not necessary in
the public interest by reason | 15 | | of the small number of clients or otherwise
limited character | 16 | | of operation of such investment adviser.
| 17 | | B. An application for registration as a dealer or limited | 18 | | Canadian
dealer, executed, verified, or
authenticated by or on | 19 | | behalf of the applicant,
shall be filed with the Secretary of | 20 | | State, in such form as the Secretary of
State may by rule, | 21 | | regulation or order prescribe, setting forth or accompanied
by:
| 22 | | (1) The name and address of the applicant, the location | 23 | | of its principal
business office and all branch offices, if | 24 | | any, and the
date of its organization;
| 25 | | (2) A statement of any other Federal or state licenses |
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| 1 | | or
registrations
which have been granted the applicant and | 2 | | whether any such licenses or
registrations have ever been | 3 | | refused, cancelled, suspended, revoked or
withdrawn;
| 4 | | (3) The assets and all liabilities, including | 5 | | contingent
liabilities of
the applicant, as of a date not | 6 | | more than 60 days prior to the filing of
the application;
| 7 | | (4)(a) A brief description of any civil or criminal
| 8 | | proceeding of which
fraud is an essential element pending | 9 | | against the applicant and whether the
applicant has ever | 10 | | been convicted of a felony, or of any misdemeanor of
which | 11 | | fraud is an essential element;
| 12 | | (b) A list setting forth the name, residence and | 13 | | business address and
a 10 year occupational statement of | 14 | | each principal of the applicant and a
statement describing | 15 | | briefly any civil or criminal proceedings of which
fraud is | 16 | | an essential element pending against any such principal and | 17 | | the
facts concerning any conviction of any such principal | 18 | | of a felony, or of
any misdemeanor of which fraud is an | 19 | | essential element;
| 20 | | (5) If the applicant is a corporation: a list
of its | 21 | | officers and directors
setting forth the residence and | 22 | | business address of each; a 10-year
occupational statement | 23 | | of each such officer or director; and a
statement | 24 | | describing briefly any civil or criminal proceedings of | 25 | | which
fraud is an essential element pending against each | 26 | | such officer or
director and the facts concerning any |
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| 1 | | conviction of any officer or director
of a felony, or of | 2 | | any misdemeanor of which fraud is an essential element;
| 3 | | (6) If the applicant is a sole proprietorship, a | 4 | | partnership,
limited liability company, an unincorporated | 5 | | association or any similar
form of business organization:
| 6 | | the name, residence and business address of the proprietor | 7 | | or of each
partner, member, officer, director, trustee or | 8 | | manager; the limitations, if
any, of the liability of each | 9 | | such individual; a 10-year occupational
statement of each | 10 | | such individual; a statement describing briefly any civil
| 11 | | or criminal proceedings of which fraud is an essential | 12 | | element pending
against each such individual and the facts | 13 | | concerning any conviction of
any such individual of a | 14 | | felony, or of any misdemeanor of
which fraud is an | 15 | | essential element;
| 16 | | (7) Such additional information as the Secretary of
| 17 | | State may by rule or regulation prescribe as necessary to | 18 | | determine the
applicant's financial responsibility, | 19 | | business repute and qualification to
act as a dealer.
| 20 | | (8)(a) No applicant shall be registered or | 21 | | re-registered as a
dealer or limited Canadian dealer
under | 22 | | this Section unless and until each principal of the dealer | 23 | | has
passed an examination conducted by the Secretary of | 24 | | State or a
self-regulatory organization of securities | 25 | | dealers or similar person, which
examination has been | 26 | | designated by the Secretary of State by rule,
regulation or |
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| 1 | | order to be satisfactory for purposes of determining | 2 | | whether
the applicant has sufficient knowledge of the | 3 | | securities business and laws
relating thereto to act as a | 4 | | registered dealer. Any dealer who was
registered on | 5 | | September 30, 1963, and has continued to be so registered;
| 6 | | and any principal of any registered dealer, who was acting | 7 | | in such capacity
on and continuously since September 30, | 8 | | 1963; and any individual who has
previously passed a | 9 | | securities dealer examination administered by the
| 10 | | Secretary of State or any examination designated by the | 11 | | Secretary of State
to be satisfactory for purposes of | 12 | | determining whether the applicant has
sufficient knowledge | 13 | | of the securities business and laws relating thereto
to act | 14 | | as a registered dealer by rule, regulation or order, shall | 15 | | not be
required to pass an examination in order to continue | 16 | | to act in such
capacity. The Secretary of State may by | 17 | | order waive the examination
requirement for any principal | 18 | | of an applicant for registration under this
subsection B | 19 | | who has had such experience or education relating to the
| 20 | | securities business as may be determined by the Secretary | 21 | | of State to be
the equivalent of such examination. Any | 22 | | request for such a waiver shall be
filed with the Secretary | 23 | | of State in such form as may be prescribed by rule
or | 24 | | regulation.
| 25 | | (b) Unless an applicant is a member of the body | 26 | | corporate known as the
Securities Investor Protection |
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| 1 | | Corporation established pursuant to the Act
of Congress of | 2 | | the United States known as the Securities Investor
| 3 | | Protection Act of 1970, as amended, a member of an | 4 | | association of
dealers registered as a national securities | 5 | | association pursuant to Section
15A of the Federal 1934 | 6 | | Act,
or a member of a self-regulatory organization or stock | 7 | | exchange in Canada
which the Secretary of State has | 8 | | designated by rule or order,
an applicant shall not be | 9 | | registered or
re-registered unless and until there is filed | 10 | | with the Secretary of State
evidence that such applicant | 11 | | has in effect insurance or other equivalent
protection for | 12 | | each client's cash or securities held by such applicant, | 13 | | and
an undertaking that such applicant will continually | 14 | | maintain such insurance
or other protection during the | 15 | | period of registration or re-registration.
Such insurance | 16 | | or other protection shall be in a form and amount | 17 | | reasonably
prescribed by the Secretary of State by rule or | 18 | | regulation.
| 19 | | (9) The application for the registration of a dealer or | 20 | | limited Canadian
dealer shall be
accompanied by a filing | 21 | | fee and a fee for each branch office in this State, in
each | 22 | | case in the amount established pursuant to Section 11a of | 23 | | this
Act, which fees shall not be returnable in any event.
| 24 | | (10) The Secretary of State shall notify the dealer or | 25 | | limited Canadian
dealer by written notice (which may be by | 26 | | electronic or
facsimile transmission) of the effectiveness |
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| 1 | | of the registration as a dealer in
this State.
| 2 | | (11) Any change which renders no longer accurate any
| 3 | | information
contained in any application for registration | 4 | | or re-registration of a
dealer or limited Canadian dealer | 5 | | shall be reported to the Secretary of
State within 10 | 6 | | business days
after the occurrence of such change; but in | 7 | | respect to assets and
liabilities only materially adverse | 8 | | changes need be reported.
| 9 | | C. Any registered dealer, limited Canadian dealer, issuer, | 10 | | or
controlling person desiring to
register a salesperson shall | 11 | | file an application with the Secretary of
State, in such form | 12 | | as the Secretary of State may by rule or regulation
prescribe, | 13 | | which the salesperson is required by this Section to provide
to | 14 | | the dealer, issuer, or controlling person, executed, verified, | 15 | | or
authenticated by the salesperson setting forth or
| 16 | | accompanied by:
| 17 | | (1) the name, residence and business address of the | 18 | | salesperson;
| 19 | | (2) whether any federal or State license or | 20 | | registration as dealer,
limited Canadian dealer, or | 21 | | salesperson has ever been refused the salesperson
or | 22 | | cancelled, suspended, revoked, withdrawn, barred, limited, | 23 | | or
otherwise adversely affected in a similar manner or | 24 | | whether the salesperson has
ever been censured or expelled;
| 25 | | (3) the nature of employment with, and names and |
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| 1 | | addresses of, employers
of the salesperson for the 10 years | 2 | | immediately preceding the date of
application;
| 3 | | (4) a brief description of any civil or criminal | 4 | | proceedings of which
fraud is an essential element pending | 5 | | against the salesperson, and whether
the salesperson has | 6 | | ever been convicted of a felony, or of any misdemeanor
of | 7 | | which fraud is an essential element;
| 8 | | (5) such additional information as the Secretary of | 9 | | State may by rule,
regulation or order prescribe as | 10 | | necessary to determine the salesperson's
business repute | 11 | | and qualification to act as a salesperson; and
| 12 | | (6) no individual shall be registered or re-registered | 13 | | as a
salesperson
under this Section unless and until such | 14 | | individual has passed an
examination conducted by the | 15 | | Secretary of State or a self-regulatory
organization of | 16 | | securities dealers or similar person, which examination | 17 | | has
been designated by the Secretary of State by rule, | 18 | | regulation or order to be
satisfactory for purposes of | 19 | | determining whether the applicant has
sufficient knowledge | 20 | | of the securities business and laws relating thereto
to act | 21 | | as a registered salesperson.
| 22 | | Any salesperson who was registered prior to September | 23 | | 30, 1963, and has
continued to be so registered, and any | 24 | | individual who has passed a securities
salesperson
| 25 | | examination administered by the Secretary of State or an | 26 | | examination
designated by the Secretary of State by rule, |
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| 1 | | regulation or order to be
satisfactory for purposes of | 2 | | determining whether the applicant has
sufficient knowledge | 3 | | of the securities business and laws relating thereto
to act | 4 | | as a registered salesperson, shall not be required to pass | 5 | | an
examination in order to continue to act as a | 6 | | salesperson. The Secretary of
State may by order waive the | 7 | | examination requirement for any applicant for
registration | 8 | | under this subsection C who has had such experience or
| 9 | | education relating to the securities business as may be | 10 | | determined by the
Secretary of State to be the equivalent | 11 | | of such examination. Any request
for such a waiver shall be | 12 | | filed with the Secretary of State in such form
as may be | 13 | | prescribed by rule, regulation or order.
| 14 | | (7) The application for registration of a salesperson | 15 | | shall be
accompanied
by a filing fee and a Securities Audit | 16 | | and Enforcement Fund fee, each
in the amount established | 17 | | pursuant to Section 11a of this Act, which shall
not be | 18 | | returnable in any event.
| 19 | | (8) Any change which renders no longer accurate any
| 20 | | information
contained in any application for registration | 21 | | or re-registration as a
salesperson shall be reported to | 22 | | the Secretary of State within 10 business
days after the | 23 | | occurrence of such change. If the activities are terminated
| 24 | | which rendered an individual a salesperson for the dealer, | 25 | | issuer or
controlling person, the dealer, issuer or | 26 | | controlling person, as the case
may be, shall notify the |
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| 1 | | Secretary of State, in writing, within 30 days of
the | 2 | | salesperson's cessation of activities, using the | 3 | | appropriate termination
notice form.
| 4 | | (9) A registered salesperson may transfer his or her
| 5 | | registration
under this Section 8 for the unexpired term | 6 | | thereof from one registered
dealer or limited Canadian | 7 | | dealer to another by the giving of notice of the
transfer | 8 | | by the new
registered dealer or limited Canadian dealer to | 9 | | the Secretary of State in
such form and subject to
such | 10 | | conditions as the Secretary of State shall by rule or | 11 | | regulation
prescribe. The new registered dealer or limited | 12 | | Canadian dealer shall
promptly file an application
for | 13 | | registration of such salesperson as provided in this | 14 | | subsection C,
accompanied by the filing fee prescribed by | 15 | | paragraph (7) of this
subsection C.
| 16 | | C-5. Except with respect to federal covered investment | 17 | | advisers whose only
clients
are investment companies as defined | 18 | | in the Federal 1940 Act, other investment
advisers, federal | 19 | | covered investment advisers, or any similar person which the
| 20 | | Secretary of State may prescribe by rule or order, a federal | 21 | | covered investment
adviser shall file with the Secretary of | 22 | | State, prior to acting as a federal
covered investment adviser | 23 | | in this State, such documents as have been filed
with the | 24 | | Securities and Exchange Commission as the Secretary of State by | 25 | | rule
or order may prescribe. The notification of a federal |
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| 1 | | covered investment
adviser shall be accompanied by a | 2 | | notification filing fee established pursuant
to Section 11a of | 3 | | this Act, which shall not be returnable in any event. Every
| 4 | | person acting as a federal covered investment adviser in this | 5 | | State shall file
a notification filing and pay an annual | 6 | | notification filing fee established
pursuant to Section 11a of | 7 | | this Act, which is not
returnable in any event. The failure to | 8 | | file any such notification shall
constitute a violation of | 9 | | subsection D of Section 12 of this Act, subject to
the | 10 | | penalties enumerated in Section 14 of this Act.
Until October | 11 | | 10, 1999 or other date as may be legally permissible, a
federal | 12 | | covered investment adviser who fails to file the notification | 13 | | or
refuses to pay the fees as required by this subsection shall | 14 | | register as an
investment adviser with the Secretary of State | 15 | | under Section 8 of this
Act.
The civil remedies
provided for in | 16 | | subsection A of Section 13 of this Act and the civil remedies
| 17 | | of rescission and appointment of receiver, conservator, | 18 | | ancillary receiver, or
ancillary conservator provided for in | 19 | | subsection F of Section 13 of this Act
shall not be available | 20 | | against any person by reason of the failure to file any
such | 21 | | notification or to pay the notification fee or on account of | 22 | | the contents
of any such notification.
| 23 | | D. An application for registration as an investment | 24 | | adviser,
executed, verified, or authenticated by or on behalf | 25 | | of the applicant, shall be
filed with
the Secretary of State, |
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| 1 | | in such form
as the Secretary of State may by rule or | 2 | | regulation prescribe, setting
forth or accompanied by:
| 3 | | (1) The name and form of organization under which the | 4 | | investment adviser
engages or intends to engage in | 5 | | business; the state or country and date of
its | 6 | | organization; the location
of the adviser's principal | 7 | | business office and branch offices, if any; the
names and | 8 | | addresses of the adviser's principal, partners, officers,
| 9 | | directors, and persons performing similar functions or, if | 10 | | the
investment adviser is an individual, of the individual; | 11 | | and the
number of the adviser's employees who perform | 12 | | investment advisory functions;
| 13 | | (2) The education, the business affiliations for the | 14 | | past 10 years, and
the present business affiliations of the | 15 | | investment adviser and of
the adviser's principal, | 16 | | partners, officers, directors, and persons
performing | 17 | | similar functions and of any person controlling the
| 18 | | investment adviser;
| 19 | | (3) The nature of the business of the investment | 20 | | adviser,
including the manner of giving advice and | 21 | | rendering analyses or reports;
| 22 | | (4) The nature and scope of the authority of the | 23 | | investment
adviser with respect to clients' funds and | 24 | | accounts;
| 25 | | (5) The basis or bases upon which the investment | 26 | | adviser is
compensated;
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| 1 | | (6) Whether the investment adviser or any principal,
| 2 | | partner, officer, director, person performing similar | 3 | | functions or person
controlling the investment adviser (i) | 4 | | within 10 years of the
filing of the application has been | 5 | | convicted of a felony, or of
any misdemeanor of which fraud | 6 | | is an essential element, or (ii) is
permanently or | 7 | | temporarily enjoined by order or judgment from acting as an
| 8 | | investment adviser, underwriter, dealer, principal or | 9 | | salesperson, or
from engaging in or continuing any conduct | 10 | | or practice in connection with
any such activity or in | 11 | | connection with the purchase or sale of any
security, and | 12 | | in each case the facts relating to the conviction,
order or | 13 | | judgment;
| 14 | | (7)(a) A statement as to whether the investment adviser | 15 | | is
engaged or is to engage primarily in the business of | 16 | | rendering investment
supervisory services; and
| 17 | | (b) A statement that the investment adviser will | 18 | | furnish his,
her, or its clients with such information as | 19 | | the Secretary of State
deems necessary in the form | 20 | | prescribed by the
Secretary of State by rule or regulation;
| 21 | | (8) Such additional information as the Secretary of | 22 | | State may, by rule,
regulation or order prescribe as | 23 | | necessary to determine the applicant's
financial | 24 | | responsibility, business repute and qualification to act | 25 | | as an
investment adviser.
| 26 | | (9) No applicant shall be registered or re-registered |
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| 1 | | as an investment
adviser under this Section unless and | 2 | | until each principal of the applicant
who is actively | 3 | | engaged in the conduct and management of the applicant's
| 4 | | advisory business in this State has passed an examination | 5 | | or completed an
educational program conducted by the | 6 | | Secretary of State or an association
of investment advisers | 7 | | or similar person, which examination or educational
| 8 | | program has been designated by the Secretary of State by | 9 | | rule, regulation
or order to be satisfactory for purposes | 10 | | of determining whether the
applicant has sufficient | 11 | | knowledge of the securities business and laws
relating | 12 | | thereto to conduct the business of a registered investment | 13 | | adviser.
| 14 | | Any person who was a registered investment adviser | 15 | | prior to September 30,
1963, and has continued to be so | 16 | | registered, and any individual who has
passed an investment | 17 | | adviser examination administered by the Secretary of
| 18 | | State, or passed an examination or completed an educational | 19 | | program
designated by the Secretary of State by rule, | 20 | | regulation or order to be
satisfactory for purposes of | 21 | | determining whether the applicant has
sufficient knowledge | 22 | | of the securities business and laws relating thereto
to | 23 | | conduct the business of a registered investment adviser, | 24 | | shall not be
required to pass an examination or complete an | 25 | | educational program in
order to continue to act as an | 26 | | investment adviser. The Secretary of State
may by order |
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| 1 | | waive the examination or educational program requirement | 2 | | for any
applicant for registration under this subsection D | 3 | | if the principal
of the applicant who is actively engaged | 4 | | in the conduct and management of the
applicant's advisory | 5 | | business in this State has had such experience
or education | 6 | | relating to the securities business as may be determined by | 7 | | the
Secretary of State to be the equivalent of the | 8 | | examination or
educational program. Any request for a | 9 | | waiver shall be filed
with the Secretary of State in such | 10 | | form as may be prescribed by
rule or regulation.
| 11 | | (10) No applicant shall be registered or re-registered | 12 | | as an
investment adviser under this Section 8 unless the | 13 | | application for
registration or re-registration is | 14 | | accompanied by an application for
registration or | 15 | | re-registration for each person
acting as an investment | 16 | | adviser representative on
behalf of the adviser and
a | 17 | | Securities Audit and Enforcement Fund fee that shall not be | 18 | | returnable in any
event is paid with respect to each | 19 | | investment adviser representative.
| 20 | | (11) The application for registration of an investment | 21 | | adviser shall be
accompanied by a filing fee and a fee for | 22 | | each branch office in this State, in
each case in the | 23 | | amount established pursuant to Section 11a of this
Act, | 24 | | which fees shall not be returnable in any event.
| 25 | | (12) The Secretary of State shall notify the investment | 26 | | adviser by written
notice (which may be by electronic or |
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| 1 | | facsimile transmission)
of
the effectiveness of the | 2 | | registration as an investment adviser in this State.
| 3 | | (13) Any change which renders no longer accurate any | 4 | | information contained
in any application for registration | 5 | | or re-registration of an investment adviser
shall be | 6 | | reported to the Secretary of State within 10 business days | 7 | | after the
occurrence of the change. In respect to assets | 8 | | and liabilities of
an investment adviser that retains | 9 | | custody of clients' cash or
securities or accepts | 10 | | pre-payment of fees in excess of $500 per client and
6 or | 11 | | more months in advance only materially adverse changes need | 12 | | be reported by
written notice (which may be by electronic | 13 | | or facsimile
transmission) no later
than the close of | 14 | | business on the second business day following the discovery
| 15 | | thereof.
| 16 | | (14) Each application for registration as an | 17 | | investment adviser shall
become effective automatically on | 18 | | the 45th day following the filing of the
application, | 19 | | required documents or information, and payment of the | 20 | | required
fee unless (i) the Secretary of State has | 21 | | registered the investment adviser
prior to that date or | 22 | | (ii) an action with respect to the applicant is
pending | 23 | | under Section 11 of this Act.
| 24 | | D-5. A registered investment adviser or federal covered | 25 | | investment adviser
desiring to register an investment adviser |
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| 1 | | representative shall file an
application with the Secretary of | 2 | | State, in the form as the Secretary of State
may by rule or | 3 | | order prescribe, which the investment adviser representative | 4 | | is
required by this Section to provide to the investment | 5 | | adviser, executed,
verified, or authenticated by the | 6 | | investment adviser representative and setting
forth or | 7 | | accompanied by:
| 8 | | (1) The name, residence, and business address of the | 9 | | investment
adviser representative;
| 10 | | (2) A statement whether any federal or state license or | 11 | | registration as a
dealer, salesperson, investment adviser, | 12 | | or investment adviser representative
has ever been | 13 | | refused, canceled, suspended, revoked or withdrawn;
| 14 | | (3) The nature of employment with, and names and | 15 | | addresses of,
employers of the investment adviser | 16 | | representative for the 10 years immediately
preceding the | 17 | | date of application;
| 18 | | (4) A brief description of any civil or criminal | 19 | | proceedings, of which
fraud is an essential element, | 20 | | pending against the investment adviser
representative and | 21 | | whether the investment adviser representative has ever | 22 | | been
convicted of a felony or of any misdemeanor of which | 23 | | fraud is an essential
element;
| 24 | | (5) Such additional information as the Secretary of | 25 | | State may by rule or
order prescribe as necessary to | 26 | | determine the investment adviser
representative's business |
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| 1 | | repute or qualification to act as an investment
adviser | 2 | | representative;
| 3 | | (6) Documentation that the individual has passed an | 4 | | examination conducted
by the Secretary of State, an | 5 | | organization of investment advisers, or similar
person, | 6 | | which examination has been designated by the Secretary of | 7 | | State by rule
or order to be satisfactory for purposes of | 8 | | determining whether the
applicant has sufficient knowledge | 9 | | of the investment advisory or securities
business and laws | 10 | | relating to that business to act as a registered investment
| 11 | | adviser representative; and
| 12 | | (7) A Securities Audit and Enforcement Fund fee | 13 | | established under
Section 11a of this Act, which shall not | 14 | | be returnable in any event.
| 15 | | The Secretary of State may by order waive the examination | 16 | | requirement for an
applicant for registration under this | 17 | | subsection D-5 who has had the experience
or education relating | 18 | | to the investment advisory or securities business as may
be | 19 | | determined by the Secretary of State to be the equivalent of | 20 | | the
examination. A request for a waiver shall be filed with the | 21 | | Secretary of State
in the form as may be prescribed by rule or | 22 | | order.
| 23 | | A change that renders no longer accurate any information | 24 | | contained in any
application for registration or | 25 | | re-registration as an investment adviser
representative must | 26 | | be reported to the Secretary of State within 10 business
days |
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| 1 | | after the occurrence of the change. If the activities that | 2 | | rendered an
individual an investment adviser representative | 3 | | for the investment adviser are
terminated, the investment | 4 | | adviser shall notify the Secretary of State in
writing (which | 5 | | may be by electronic or facsimile transmission), within 30 days
| 6 | | of the investment adviser representative's termination, using | 7 | | the
appropriate termination notice form as the Secretary of | 8 | | State may prescribe by
rule or order.
| 9 | | A registered investment adviser representative may | 10 | | transfer his or her
registration under this Section 8 for the | 11 | | unexpired term of the registration
from one registered | 12 | | investment adviser to another by the giving of notice of
the | 13 | | transfer by the new investment adviser to the Secretary of | 14 | | State in the
form and subject to the conditions as the | 15 | | Secretary of State shall prescribe.
The new registered | 16 | | investment adviser shall promptly file an application for
| 17 | | registration of the investment adviser representative as | 18 | | provided in this
subsection, accompanied by the Securities | 19 | | Audit and Enforcement Fund fee
prescribed by paragraph (7) of | 20 | | this
subsection D-5.
| 21 | | E. (1) Subject to the provisions of subsection F of Section | 22 | | 11 of
this Act, the registration of a dealer, limited Canadian | 23 | | dealer,
salesperson, investment adviser, or investment adviser
| 24 | | representative may be denied, suspended , conditioned, limited, | 25 | | or revoked if the Secretary of State
finds that the dealer, |
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| 1 | | limited Canadian dealer, Internet portal, salesperson,
| 2 | | investment adviser, or investment adviser representative or | 3 | | any
principal officer, director, partner, member, trustee, | 4 | | manager or any
person who performs a similar function of the | 5 | | dealer, limited Canadian
dealer, Internet portal, or | 6 | | investment adviser:
| 7 | | (a) has been convicted of any felony
during the 10 year | 8 | | period preceding the date of filing of any application for
| 9 | | registration or at any time thereafter, or of any | 10 | | misdemeanor of
which fraud is an essential element;
| 11 | | (b) has engaged in any unethical practice in connection | 12 | | with any
security, or in any fraudulent business practice;
| 13 | | (c) has failed to account for any money or property, or | 14 | | has failed to
deliver any security, to any person entitled | 15 | | thereto when due or within
a reasonable time thereafter;
| 16 | | (d) in the case of a dealer, limited Canadian dealer, | 17 | | or investment
adviser, is insolvent;
| 18 | | (e) in the case of a dealer, limited Canadian dealer,
| 19 | | salesperson, or registered principal of a dealer or
limited | 20 | | Canadian dealer
(i) has
failed
reasonably to supervise the | 21 | | investment advisory or
securities activities of any of its | 22 | | salespersons or other employees and the
failure
has | 23 | | permitted or facilitated a violation of Section 12 of this | 24 | | Act or (ii) is
offering or selling or has offered or sold | 25 | | securities in this
State through a salesperson other than a | 26 | | registered salesperson, or, in
the case of a salesperson, |
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| 1 | | is selling or has sold securities in this State
for a | 2 | | dealer, limited Canadian dealer, issuer or controlling | 3 | | person with
knowledge that the
dealer, limited Canadian | 4 | | dealer, issuer or controlling person has not
complied with | 5 | | the provisions of
this Act
or (iii) has failed reasonably | 6 | | to supervise the
implementation of compliance measures | 7 | | following notice by
the Secretary of State of noncompliance | 8 | | with the Act or
with the regulations promulgated thereunder | 9 | | or both or (iv) has failed to
maintain and enforce written | 10 | | procedures to supervise the types of
business in which it | 11 | | engages and to supervise the activities of its
salespersons | 12 | | that are reasonably designed to achieve compliance with | 13 | | applicable
securities laws and regulations;
| 14 | | (f) in the case of an investment adviser, has (1) | 15 | | failed reasonably to
supervise the advisory activities of | 16 | | any of its investment adviser
representatives or employees | 17 | | and the
failure has permitted or facilitated a violation of | 18 | | Section 12 of this Act or (2) failed to maintain and | 19 | | enforce written policies and procedures to supervise the | 20 | | types of business in which it engages ;
| 21 | | (g) has violated any of the provisions of this Act;
| 22 | | (h) has made any material misrepresentation to the | 23 | | Secretary of State
in connection with any information | 24 | | deemed necessary by the Secretary of
State to determine a | 25 | | dealer's, limited Canadian dealer's, or investment
| 26 | | adviser's financial responsibility
or a dealer's, limited |
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| 1 | | Canadian dealer's, investment adviser's,
salesperson's, or | 2 | | investment
adviser representative's business repute or
| 3 | | qualifications, or has refused to furnish any such | 4 | | information
requested by the Secretary of State;
| 5 | | (i) has had a license or registration under any Federal | 6 | | or State law
regulating securities, commodity futures
| 7 | | contracts,
or stock futures contracts refused, cancelled, | 8 | | suspended, withdrawn,
revoked, or otherwise
adversely | 9 | | affected in a similar manner;
| 10 | | (j) has had membership
in or
association with any | 11 | | self-regulatory
organization registered under the Federal | 12 | | 1934 Act or the Federal 1974 Act
suspended, revoked, | 13 | | refused, expelled, cancelled, barred, limited in any
| 14 | | capacity, or
otherwise adversely affected in a similar | 15 | | manner
arising from any fraudulent or deceptive act or a | 16 | | practice in violation of
any rule, regulation or standard | 17 | | duly promulgated by the self-regulatory
organization;
| 18 | | (k) has had any order entered against it after notice | 19 | | and opportunity
for hearing by a securities agency of any | 20 | | state, any foreign government
or agency thereof, the | 21 | | Securities and Exchange Commission, or the Federal
| 22 | | Commodities Futures Trading Commission arising from any | 23 | | fraudulent or
deceptive act or a practice in violation of | 24 | | any statute, rule or regulation
administered or | 25 | | promulgated by the agency or commission;
| 26 | | (l) in the case of a dealer or limited Canadian dealer, |
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| 1 | | fails to
maintain a minimum net capital
in an amount which | 2 | | the Secretary of State may by rule or regulation require;
| 3 | | (m) has conducted a continuing course of dealing of | 4 | | such
nature as to demonstrate an inability to properly | 5 | | conduct the business of
the dealer, limited Canadian | 6 | | dealer, salesperson, investment
adviser,
or investment | 7 | | adviser representative;
| 8 | | (n) has had, after notice and opportunity for hearing, | 9 | | any injunction or
order entered against it or license or | 10 | | registration refused, cancelled,
suspended, revoked, | 11 | | withdrawn, limited, or otherwise adversely
affected in a | 12 | | similar manner by any state or federal body,
agency or | 13 | | commission regulating banking, insurance, finance or small | 14 | | loan
companies, real estate or mortgage brokers or | 15 | | companies, if the
action resulted from any act found by the | 16 | | body, agency or
commission to be a fraudulent or deceptive | 17 | | act or practice in violation of
any statute, rule or | 18 | | regulation administered or
promulgated by the body, agency | 19 | | or commission;
| 20 | | (o) has failed to file a return, or to pay the tax, | 21 | | penalty or interest
shown in a filed return, or to pay any | 22 | | final assessment of tax, penalty or
interest, as required | 23 | | by any tax Act administered by the Illinois
Department of | 24 | | Revenue, until such time as the requirements of
that tax | 25 | | Act are satisfied;
| 26 | | (p) (blank);
|
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| 1 | | (q) has failed to maintain the books and records | 2 | | required under this Act
or rules or regulations promulgated | 3 | | under this Act or under any requirements
established by the | 4 | | Securities and Exchange Commission or a self-regulatory
| 5 | | organization;
| 6 | | (r) has refused to allow or otherwise impeded designees | 7 | | of the Secretary
of
State from conducting an audit, | 8 | | examination, inspection, or investigation
provided for | 9 | | under Section 8 or 11 of this Act;
| 10 | | (s) has failed to maintain any minimum net capital or | 11 | | bond requirement set
forth in this Act or any rule or | 12 | | regulation promulgated under this Act;
| 13 | | (t) has refused the Secretary of State or his or her | 14 | | designee access to
any office or location within an office | 15 | | to conduct an investigation, audit,
examination, or | 16 | | inspection;
| 17 | | (u) has advised or caused a public pension fund or | 18 | | retirement system
established under the Illinois Pension | 19 | | Code to make an investment or engage in
a transaction not | 20 | | authorized by that Code;
| 21 | | (v) if a corporation, limited liability company, or | 22 | | limited liability
partnership has been suspended, | 23 | | canceled, revoked, or has failed to register as
a foreign
| 24 | | corporation, limited liability company, or limited | 25 | | liability partnership
with the Secretary
of State;
| 26 | | (w) is permanently or temporarily enjoined by any court |
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| 1 | | of competent
jurisdiction, including any state, federal, | 2 | | or foreign government, from
engaging
in or continuing any | 3 | | conduct or practice involving any aspect of the securities
| 4 | | or commodities business or in any other business where the | 5 | | conduct or practice
enjoined involved investments, | 6 | | franchises, insurance, banking, or finance;
| 7 | | (2) If the Secretary of State finds that any registrant or | 8 | | applicant for
registration is no longer in existence or has | 9 | | ceased to do business as a
dealer, limited Canadian dealer, | 10 | | Internet portal, salesperson, investment
adviser, or | 11 | | investment adviser representative, or is subject to an
| 12 | | adjudication
as a person under legal disability or to the | 13 | | control of a
guardian, or cannot be located after reasonable | 14 | | search, or has failed
after written notice to pay to the | 15 | | Secretary of State any additional fee
prescribed by this | 16 | | Section or specified by rule or regulation, the Secretary of | 17 | | State may by order cancel the
registration or application.
| 18 | | (3) Withdrawal of an application for registration or | 19 | | withdrawal from
registration as a dealer, limited Canadian | 20 | | dealer, salesperson,
investment adviser, or investment adviser | 21 | | representative becomes effective
30 days after receipt of an | 22 | | application to withdraw or within such
shorter period of time | 23 | | as the Secretary of State may determine, unless any
proceeding | 24 | | is pending under Section 11 of this Act when the application is
| 25 | | filed or a proceeding is instituted within 30 days after the | 26 | | application is
filed. If a proceeding is pending or instituted, |
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| 1 | | withdrawal becomes effective
at such time and upon such | 2 | | conditions as the Secretary
of State by order determines. If no | 3 | | proceeding is pending or instituted and
withdrawal | 4 | | automatically becomes effective, the Secretary of State may
| 5 | | nevertheless institute a revocation or suspension proceeding | 6 | | within 2
years after withdrawal became effective and enter a | 7 | | revocation or suspension
order as of the last date on which | 8 | | registration was effective.
| 9 | | F. The Secretary of State shall make available upon request | 10 | | the date
that each dealer, investment adviser, salesperson, or | 11 | | investment
adviser representative was granted
registration, | 12 | | together with the name and address of the dealer, limited
| 13 | | Canadian dealer, or issuer on
whose behalf the salesperson is | 14 | | registered, and all
orders of the Secretary of State denying or | 15 | | abandoning an application, or
suspending or revoking | 16 | | registration, or censuring the persons.
The Secretary of State | 17 | | may designate by rule, regulation or order the
statements, | 18 | | information or reports submitted to or filed with him or
her | 19 | | pursuant to this Section 8 which the Secretary of State | 20 | | determines are
of a sensitive nature and therefore should be | 21 | | exempt from public
disclosure. Any such statement, information | 22 | | or report shall be
deemed confidential and shall not be | 23 | | disclosed to the public except upon the
consent of the person | 24 | | filing or submitting the statement,
information or report or by | 25 | | order of court or in court proceedings.
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| 1 | | G. The registration or re-registration of a dealer or | 2 | | limited Canadian
dealer and of all salespersons
registered upon | 3 | | application of the dealer or limited Canadian dealer shall
| 4 | | expire on the next
succeeding anniversary date of the | 5 | | registration or re-registration of the
dealer; and the | 6 | | registration or re-registration of an investment
adviser and of | 7 | | all investment adviser representatives registered upon
| 8 | | application of the investment adviser shall expire on the next | 9 | | succeeding
anniversary date of the
registration of the | 10 | | investment adviser; provided, that the
Secretary of State may | 11 | | by rule or regulation prescribe an alternate date which
any | 12 | | dealer registered under the Federal 1934 Act or a member of any
| 13 | | self-regulatory association approved pursuant thereto, a | 14 | | member of a
self-regulatory organization or stock exchange in | 15 | | Canada, or any investment
adviser may elect
as
the expiration | 16 | | date of its dealer or limited Canadian dealer and
salesperson | 17 | | registrations, or the expiration date of its investment adviser
| 18 | | registration, as the case may be. A
registration of a | 19 | | salesperson registered upon application of an issuer or
| 20 | | controlling person shall expire on the next succeeding | 21 | | anniversary date of
the registration, or upon termination or | 22 | | expiration of the
registration of the securities, if any, | 23 | | designated in the application for his
or her registration or | 24 | | the alternative date as the Secretary may prescribe by
rule or | 25 | | regulation. Subject to paragraph (9) of subsection C of this |
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| 1 | | Section
8, a salesperson's registration also shall terminate | 2 | | upon cessation of his or
her employment, or termination of his | 3 | | or her appointment or authorization, in
each case by the person | 4 | | who applied for the salesperson's registration,
provided that | 5 | | the Secretary of State may by rule or regulation prescribe an
| 6 | | alternate date for the expiration of the registration.
| 7 | | H. Applications for re-registration of dealers, limited | 8 | | Canadian
dealers, Internet portals, salespersons, investment | 9 | | advisers, and investment
adviser representatives shall be | 10 | | filed with the Secretary of State prior
to the expiration of | 11 | | the then current registration and
shall
contain such | 12 | | information as may be required by the Secretary of
State upon | 13 | | initial application with such omission therefrom or
addition | 14 | | thereto as the Secretary of State may authorize or prescribe. | 15 | | Each
application for re-registration of a dealer, limited | 16 | | Canadian dealer, Internet portal, or
investment adviser
shall | 17 | | be accompanied by a filing fee, each application for
| 18 | | re-registration as a salesperson shall be accompanied by a | 19 | | filing fee and a
Securities Audit and Enforcement Fund fee | 20 | | established pursuant to Section
11a of this Act, and
each | 21 | | application for re-registration as an investment adviser | 22 | | representative
shall be accompanied by a Securities Audit and | 23 | | Enforcement Fund fee
established under Section 11a of this Act,
| 24 | | which shall not be returnable in any event. Notwithstanding
the | 25 | | foregoing, applications for
re-registration of dealers, |
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| 1 | | limited Canadian dealers, Internet portals, and investment
| 2 | | advisers may be filed within 30 days
following the expiration | 3 | | of the registration provided that the applicant pays
the annual | 4 | | registration fee together with an additional amount equal to
| 5 | | the annual registration fee and files any other information or | 6 | | documents that
the Secretary of State may prescribe by rule
or | 7 | | regulation or order. Any application filed within 30 days | 8 | | following the
expiration of the registration shall be | 9 | | automatically effective as of the
time of the earlier | 10 | | expiration provided that the proper fee has been paid
to the | 11 | | Secretary of State.
| 12 | | Each registered dealer, limited Canadian dealer, Internet | 13 | | portal, or investment adviser
shall continue to be
registered | 14 | | if the registrant changes his, her, or its form of organization
| 15 | | provided that the dealer or investment adviser files an | 16 | | amendment to his,
her, or its application not later than 30 | 17 | | days following the occurrence of the
change and pays the | 18 | | Secretary of State a fee in the amount established under
| 19 | | Section 11a of this Act.
| 20 | | I. (1)(a) Every registered dealer, limited Canadian | 21 | | dealer, Internet portal, and investment
adviser shall make and | 22 | | keep
for such periods, such accounts, correspondence,
| 23 | | memoranda, papers, books and records as the Secretary of State | 24 | | may by rule or
regulation prescribe. All records so required | 25 | | shall be preserved for 3 years
unless the Secretary of State by |
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| 1 | | rule, regulation or order prescribes otherwise
for particular | 2 | | types of records.
| 3 | | (b) Every registered dealer, limited Canadian dealer, | 4 | | Internet portal, and investment adviser shall provide to the | 5 | | Secretary of State, upon request, such accounts, | 6 | | correspondence, memoranda, papers, books, and records as the | 7 | | Secretary of State may by rule or regulation prescribe, that it | 8 | | possesses and that it preserves for periods of longer than 3 | 9 | | years. | 10 | | (2) Every registered dealer, limited Canadian dealer, | 11 | | Internet portal, and investment
adviser shall file such | 12 | | financial reports as the Secretary of State may by rule
or | 13 | | regulation
prescribe.
| 14 | | (3) All the books and records referred to in paragraph (1) | 15 | | of this
subsection I are subject at any time or from time to | 16 | | time to such
reasonable periodic, special or other audits, | 17 | | examinations, or inspections by
representatives of the | 18 | | Secretary of State, within or without this State, as the
| 19 | | Secretary of State deems necessary or appropriate in the public | 20 | | interest or for
the protection of investors.
| 21 | | (4) At the time of an audit, examination, or inspection, | 22 | | the Secretary of
State, by his or her designees, may
conduct an | 23 | | interview of any person employed or appointed by or
affiliated | 24 | | with a registered dealer, limited Canadian dealer, Internet | 25 | | portal, or investment
advisor, provided that the
dealer, | 26 | | limited Canadian dealer, Internet portal, or investment |
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| 1 | | advisor shall be given
reasonable
notice of the time and place | 2 | | for the interview. At the option of the dealer,
limited | 3 | | Canadian dealer, Internet portal, or
investment advisor, a | 4 | | representative of the dealer or investment advisor with
| 5 | | supervisory responsibility over the individual being | 6 | | interviewed may be present
at the interview.
| 7 | | J. The Secretary of State may require by rule or regulation | 8 | | the
payment of an additional fee for the filing of information | 9 | | or documents
required to be filed by this Section which have | 10 | | not been filed in a timely
manner. The Secretary of State may | 11 | | also require by rule or regulation the
payment of an | 12 | | examination fee for administering any examination which it
may | 13 | | conduct pursuant to subsection B, C, D, or D-5 of this
Section | 14 | | 8.
| 15 | | K. The Secretary of State may declare any application for
| 16 | | registration or limited registration
under this Section 8 | 17 | | abandoned by order if the applicant fails to pay any
fee or | 18 | | file any information or document required under this Section 8 | 19 | | or by
rule or regulation for more than 30 days after the | 20 | | required payment or
filing date. The applicant may petition the | 21 | | Secretary of State for a
hearing within 15 days after the | 22 | | applicant's receipt of the order of
abandonment, provided that | 23 | | the petition sets forth the grounds
upon which the applicant | 24 | | seeks a hearing.
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| 1 | | L. Any document being filed pursuant to this Section 8 | 2 | | shall be deemed
filed, and any fee being paid pursuant to this | 3 | | Section 8 shall be deemed
paid, upon the date of actual receipt | 4 | | thereof by the Secretary of State or
his or her designee.
| 5 | | M. (Blank).
| 6 | | (Source: P.A. 100-872, eff. 8-14-18; 101-563, eff. 8-23-19.)
| 7 | | (815 ILCS 5/11) (from Ch. 121 1/2, par. 137.11)
| 8 | | Sec. 11. Duties and powers of the Secretary of State.
| 9 | | A. (1) The administration of this Act is vested in the | 10 | | Secretary of State,
who may from time to time make, amend and | 11 | | rescind such rules and
regulations as may be necessary to carry | 12 | | out this Act, including rules and
regulations governing | 13 | | procedures of registration, statements, applications and
| 14 | | reports for various classes of securities, persons and matters | 15 | | within his or
her jurisdiction and defining any terms, whether | 16 | | or not used in this Act,
insofar as the definitions are not | 17 | | inconsistent with this Act. The rules and
regulations adopted | 18 | | by the Secretary of State under this Act shall be effective
in | 19 | | the manner provided for in the Illinois Administrative | 20 | | Procedure Act.
| 21 | | (2) Among other things, the Secretary of State shall have | 22 | | authority, for
the purposes of this Act, to prescribe the form | 23 | | or forms in which required
information shall be set forth, |
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| 1 | | accounting practices, the items or
details to be shown in | 2 | | balance sheets and earning statements, and the
methods to be | 3 | | followed in the preparation of accounts, in the appraisal
or | 4 | | valuation of assets and liabilities, in the determination of
| 5 | | depreciation and depletion, in the differentiation of | 6 | | recurring and
non-recurring income, in the differentiation of | 7 | | investment and operating
income, and in the preparation of | 8 | | consolidated balance sheets or income
accounts of any person, | 9 | | directly or indirectly, controlling or
controlled by the | 10 | | issuer, or any person under direct or indirect common
control | 11 | | with the issuer.
| 12 | | (3) No provision of this Act imposing any liability shall | 13 | | apply to any act
done or omitted in good faith in conformity | 14 | | with any rule or regulation of the
Secretary of State under | 15 | | this Act, notwithstanding that the rule
or regulation may, | 16 | | after the act or omission, be amended or
rescinded or be | 17 | | determined by judicial or other authority to be invalid for any
| 18 | | reason.
| 19 | | (4) The Securities Department of the Office of the | 20 | | Secretary of State shall
be deemed a criminal justice agency | 21 | | for purposes of all federal and state laws
and regulations and, | 22 | | in that capacity, shall be entitled to access to any
| 23 | | information available to criminal justice agencies
and has the | 24 | | power to
appoint special agents to conduct all investigations, | 25 | | searches, seizures,
arrests, and other duties imposed under the | 26 | | provisions of any law
administered by the Department. The |
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| 1 | | special agents have and may
exercise all the powers of peace | 2 | | officers solely for the purpose of
enforcing provisions of this | 3 | | Act.
| 4 | | The Director must authorize to each special agent employed | 5 | | under
this Section a distinct badge that, on its face, (i) | 6 | | clearly states that
the badge is authorized by the Department | 7 | | and (ii) contains a
unique and identifying number.
| 8 | | Special agents shall comply with all training requirements
| 9 | | established for law enforcement officers by provisions of the
| 10 | | Illinois Police Training Act.
| 11 | | (5) The Secretary of State, by rule, may conditionally or | 12 | | unconditionally
exempt any person, security, or transaction, | 13 | | or any class or classes of
persons, securities,
or transactions | 14 | | from any provision of Section 5, 6, 7, 8, 8a, or 9 of this
Act | 15 | | or of any rule promulgated under these Sections, to the extent | 16 | | that
such
exemption is
necessary or appropriate in the public | 17 | | interest, and is consistent with the
protection of investors.
| 18 | | B. The Secretary of State may, anything in this Act to the | 19 | | contrary
notwithstanding, require financial statements and | 20 | | reports of the issuer,
dealer, Internet portal, salesperson, | 21 | | investment adviser, or investment adviser
representative as | 22 | | often as circumstances may
warrant. In addition, the Secretary | 23 | | of
State may secure information or books and records from or | 24 | | through others
and may make or cause to be made investigations | 25 | | respecting the business,
affairs, and property of the issuer of | 26 | | securities, any person involved in the
sale or offer for sale, |
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| 1 | | purchase or offer to purchase of any mineral investment
| 2 | | contract, mineral deferred delivery contract, or security and | 3 | | of dealers, Internet portals,
salespersons, investment | 4 | | advisers, and investment adviser
representatives that are | 5 | | registered or are the
subject of an application for | 6 | | registration under this Act. The
costs of an investigation | 7 | | shall be borne by the registrant or
the applicant, provided | 8 | | that the registrant or applicant shall not
be obligated to pay | 9 | | the costs without his, her or its consent in
advance.
| 10 | | C. Whenever it shall appear to the Secretary of State, | 11 | | either upon
complaint or otherwise, that this Act, or any rule | 12 | | or regulation
prescribed under authority thereof, has been or | 13 | | is about to be violated,
he or she may, in his or her | 14 | | discretion, do one or more of the
following:
| 15 | | (1) require or permit the person to file with the | 16 | | Secretary
of State a statement in writing under oath, or | 17 | | otherwise, as to all the facts
and circumstances concerning | 18 | | the subject matter which the Secretary of State
believes to | 19 | | be in the public interest to investigate, audit, examine, | 20 | | or
inspect;
| 21 | | (2) conduct an investigation, audit, examination, or | 22 | | inspection as
necessary or advisable for the protection of | 23 | | the interests of the
public; and
| 24 | | (3) appoint investigators to conduct all | 25 | | investigations, searches,
seizures,
arrests, and other | 26 | | duties imposed under the provisions of any law
administered |
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| 1 | | by the Department. The Director must authorize to each
| 2 | | investigator employed under this Section a distinct badge
| 3 | | that,
on its face,
(i) clearly states that the badge is | 4 | | authorized by the Department and
(ii) contains a unique and | 5 | | identifying number.
| 6 | | D. (1) For the purpose of all investigations, audits, | 7 | | examinations, or
inspections which in the opinion
of the | 8 | | Secretary of State are necessary and proper for the enforcement
| 9 | | of this Act, the Secretary of State or a person designated by | 10 | | him or
her is empowered to administer oaths and affirmations, | 11 | | subpoena witnesses,
take evidence, and require, by subpoena or | 12 | | other lawful means provided by
this Act or the rules adopted by | 13 | | the Secretary of State,
the production of any books and | 14 | | records, papers,
or other
documents which the Secretary of | 15 | | State or a person designated by him
or her deems relevant or | 16 | | material to the inquiry.
| 17 | | (2) The Secretary of
State or a person designated by him or | 18 | | her is further empowered to
administer oaths and affirmations, | 19 | | subpoena witnesses, take evidence, and
require the production | 20 | | of any books and records, papers, or other documents
in this
| 21 | | State at the request of a securities agency of another state, | 22 | | if the
activities constituting the alleged violation for which | 23 | | the information is
sought would be in violation of Section 12 | 24 | | of this Act if the activities
had occurred in this State.
| 25 | | (3) The Circuit Court of any County of this State, upon | 26 | | application of the
Secretary of State or a person designated by |
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| 1 | | him or her may order the
attendance of witnesses, the | 2 | | production of books and records, papers, accounts
and documents | 3 | | and the giving of testimony before the Secretary of State or a
| 4 | | person designated by him or her; and any failure to obey the | 5 | | order
may be punished by the Circuit Court as a contempt | 6 | | thereof.
| 7 | | (4) The fees of subpoenaed witnesses under this Act for
| 8 | | attendance and travel shall be the same as fees of witnesses | 9 | | before the
Circuit Courts of this State, to be paid when the | 10 | | witness
is excused from further attendance, provided, the | 11 | | witness is
subpoenaed at the instance of the Secretary of | 12 | | State; and payment of the fees shall be made and audited in the | 13 | | same manner as other expenses of
the Secretary of State.
| 14 | | (5) Whenever a subpoena is issued at the request of a | 15 | | complainant or
respondent as the case may be, the Secretary of | 16 | | State may require that the cost
of service and the fee of the | 17 | | witness shall be borne by the party at whose
instance the | 18 | | witness is summoned.
| 19 | | (6) The Secretary of State shall have power at his or her | 20 | | discretion, to
require a deposit to cover the cost of the | 21 | | service and
witness fees and the payment of the legal witness | 22 | | fee and mileage to the
witness served with subpoena.
| 23 | | (7) A subpoena issued under this Act shall be served in the | 24 | | same manner
as a subpoena issued out of a circuit court.
| 25 | | (8) The Secretary of State may in any investigation, | 26 | | audits, examinations,
or inspections cause the taking of |
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| 1 | | depositions of persons residing within or
without this State in | 2 | | the manner provided in civil actions under the laws of
this | 3 | | State.
| 4 | | E. Anything in this Act to the contrary notwithstanding:
| 5 | | (1) If the Secretary of State shall find that the offer | 6 | | or sale or
proposed offer or sale or method of offer or | 7 | | sale of any securities by any
person, whether exempt or | 8 | | not, in this State, is fraudulent, or would
work or tend to | 9 | | work a fraud or deceit, or is being offered or sold in
| 10 | | violation of Section 12,
or there has been a failure or | 11 | | refusal to submit any notification filing or
fee required | 12 | | under this Act,
the Secretary of State may by written order | 13 | | prohibit
or suspend the offer or sale of securities by that | 14 | | person or deny or revoke the
registration of the securities | 15 | | or the exemption from registration
for the securities.
| 16 | | (2) If the Secretary of State shall find that any | 17 | | person has violated
subsection C, D, E, F, G, H, I, J, or K | 18 | | of Section 12 of
this Act, the Secretary of State may by | 19 | | written order temporarily or
permanently prohibit or | 20 | | suspend the person from offering or
selling any securities, | 21 | | any mineral
investment contract, or any mineral deferred | 22 | | delivery contract in this
State, provided that any person | 23 | | who is the subject of an order of
permanent prohibition may | 24 | | petition the Secretary of State for a hearing to
present | 25 | | evidence of rehabilitation or change in circumstances | 26 | | justifying
the amendment or termination of the order of |
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| 1 | | permanent prohibition.
| 2 | | (3) If the Secretary of State shall find that any | 3 | | person is engaging or
has engaged in the business of | 4 | | selling or offering for sale securities as a
dealer, | 5 | | Internet portal, or salesperson or is acting or has acted | 6 | | as an investment adviser,
investment adviser | 7 | | representative, or
federal covered investment adviser,
| 8 | | without prior thereto and at the time thereof having | 9 | | complied with the
registration or notice filing | 10 | | requirements of this Act, the Secretary of
State may by
| 11 | | written order prohibit or suspend the person from engaging | 12 | | in the
business of selling or offering for sale securities, | 13 | | or acting as an investment
adviser, investment adviser | 14 | | representative, or federal covered investment
adviser, in | 15 | | this State.
| 16 | | (4) In addition to any other sanction or remedy | 17 | | contained in this
subsection E, the Secretary of State, | 18 | | after finding that any provision of
this Act has been | 19 | | violated, may impose a fine as provided by rule,
regulation | 20 | | or order not to exceed $10,000 for each
violation of this | 21 | | Act, may
issue an order of public censure against the | 22 | | violator, and may charge as
costs of investigation all | 23 | | reasonable expenses, including attorney's fees and
witness | 24 | | fees.
| 25 | | F. (1) The Secretary of State shall not deny, suspend or | 26 | | revoke the
registration of securities, suspend or revoke the |
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| 1 | | registration of a
dealer, Internet portal, salesperson, | 2 | | investment adviser, or investment adviser
representative, | 3 | | prohibit or suspend the
offer or sale of any securities, | 4 | | prohibit or suspend any person from
offering or selling any | 5 | | securities in this State, prohibit or
suspend a dealer or | 6 | | salesperson from engaging in the business of selling or
| 7 | | offering for sale securities, prohibit or suspend a person from | 8 | | acting as
an investment adviser or federal covered investment | 9 | | adviser, or investment
adviser representative, impose any
fine | 10 | | for violation of this Act, issue an
order of public censure, or | 11 | | enter into an agreed settlement except after an
opportunity for | 12 | | hearing upon not less than 10 days notice given by personal
| 13 | | service or registered mail or certified mail, return receipt | 14 | | requested, to
the person or persons concerned. Such notice | 15 | | shall state the date and time
and place of the hearing and | 16 | | shall contain a brief statement of
the proposed action of the | 17 | | Secretary of State and the grounds for
the proposed action. A | 18 | | failure to appear at the hearing or
otherwise respond to the | 19 | | allegations set forth in the notice of
hearing shall constitute | 20 | | an admission of any facts alleged therein and shall
constitute | 21 | | sufficient basis to enter an order.
| 22 | | (2) Anything herein contained to the contrary | 23 | | notwithstanding, the Secretary
of State may temporarily | 24 | | prohibit or suspend, for a maximum period of 90 days,
by an | 25 | | order effective immediately, the offer or sale or registration | 26 | | of
securities, the registration of a dealer, Internet portal, |
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| 1 | | salesperson, investment
adviser, or investment adviser | 2 | | representative, or
the offer or sale of securities by any | 3 | | person, or the business of rendering
investment advice, without | 4 | | the notice and prior hearing in this subsection
prescribed, if | 5 | | the Secretary of State shall in his or her opinion, based on
| 6 | | credible evidence, deem it necessary to prevent an imminent | 7 | | violation of this
Act or to prevent losses to investors which | 8 | | the Secretary of State reasonably
believes will occur as a | 9 | | result of a prior violation of this Act. Immediately
after | 10 | | taking action without such notice and hearing, the Secretary
of | 11 | | State shall deliver a copy of the
temporary order to the | 12 | | respondent named therein by personal service or
registered mail | 13 | | or certified mail, return receipt requested. The temporary
| 14 | | order shall set forth the grounds for the action and shall | 15 | | advise that the
respondent may request a hearing, that
the | 16 | | request for a hearing will not stop the effectiveness of the | 17 | | temporary
order and that respondent's failure to request a | 18 | | hearing within 30 days
after the date of the entry of the | 19 | | temporary order shall constitute an
admission of any facts | 20 | | alleged therein and shall constitute sufficient
basis to make | 21 | | the temporary order final. Any provision of this paragraph
(2) | 22 | | to the contrary notwithstanding, the Secretary of State may not
| 23 | | pursuant to the provisions of this paragraph (2) suspend the | 24 | | registration
of a dealer, limited Canadian dealer, | 25 | | salesperson, investment
adviser, or investment adviser | 26 | | representative based upon sub-paragraph (n)
of paragraph (l) of |
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| 1 | | subsection E of Section 8 of this Act or revoke
the | 2 | | registration of securities or revoke the registration of any
| 3 | | dealer, salesperson, investment adviser representative, or | 4 | | investment
adviser.
| 5 | | (3) The Secretary of State may issue a temporary order | 6 | | suspending or
delaying the effectiveness of any registration of | 7 | | securities under
subsection A or B of Section 5, 6 or 7 of this | 8 | | Act subsequent to and upon
the basis of the issuance of any | 9 | | stop, suspension or similar order by the
Securities and | 10 | | Exchange Commission with respect to the securities which are
| 11 | | the subject of the registration under subsection A or B of | 12 | | Section 5, 6 or
7 of this Act, and the order shall become | 13 | | effective as of the date
and time of effectiveness of the | 14 | | Securities and Exchange Commission order and
shall be vacated | 15 | | automatically at such time as the order of the
Securities and | 16 | | Exchange Commission is no longer in effect.
| 17 | | (4) When the Secretary of State finds that an application | 18 | | for registration
as a dealer, Internet portal, salesperson, | 19 | | investment adviser, or investment
adviser representative | 20 | | should be denied, the Secretary
of State may enter an order | 21 | | denying the registration. Immediately
after taking such | 22 | | action, the Secretary of State shall deliver a
copy of the | 23 | | order to the respondent named therein by personal service or
| 24 | | registered mail or certified mail, return receipt requested. | 25 | | The order shall
state the grounds for the action and that the | 26 | | matter will be set
for hearing upon written request filed with |
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| 1 | | the Secretary of State within 30
days after the receipt of the | 2 | | request by the respondent. The
respondent's failure to request | 3 | | a hearing within 30 days after receipt of
the order shall | 4 | | constitute an admission of any facts alleged
therein and shall | 5 | | make the order final. If a hearing is held, the
Secretary of | 6 | | State shall affirm, vacate, or modify the order.
| 7 | | (5) The findings and decision of the Secretary of State | 8 | | upon the
conclusion of each final hearing held pursuant to this | 9 | | subsection shall
be set forth in a written order signed on | 10 | | behalf of the Secretary of
State by his or her designee and | 11 | | shall be filed as a public record. All
hearings shall be held | 12 | | before a person designated by the Secretary of State,
and | 13 | | appropriate records thereof shall be kept.
| 14 | | (6) Notwithstanding the foregoing, the Secretary of State, | 15 | | after
notice and opportunity for hearing, may at his or her | 16 | | discretion enter into
an agreed settlement, stipulation or | 17 | | consent order with a respondent in
accordance with the | 18 | | provisions of the Illinois Administrative
Procedure Act. The | 19 | | provisions of the agreed settlement, stipulation or
consent | 20 | | order shall have the full force and effect of an order issued | 21 | | by the
Secretary of State.
| 22 | | (7) Anything in this Act to the contrary notwithstanding, | 23 | | whenever
the Secretary of State finds that a person is | 24 | | currently expelled from, refused
membership in or association | 25 | | with, or limited in any material capacity by a
self-regulatory | 26 | | organization registered under the Federal 1934 Act or the
|
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| 1 | | Federal 1974 Act because of a fraudulent or deceptive act or a | 2 | | practice in
violation of a rule, regulation, or standard duly | 3 | | promulgated by the
self-regulatory organization, the Secretary | 4 | | of State may, at his or her
discretion, enter a Summary Order | 5 | | of Prohibition, which shall prohibit the
offer
or sale of any | 6 | | securities, mineral investment contract, or mineral deferred
| 7 | | delivery contract by the person in this State. The order shall | 8 | | take effect
immediately upon its entry. Immediately after | 9 | | taking the action the Secretary
of State shall deliver a copy | 10 | | of the order to the named Respondent by
personal service or | 11 | | registered mail or certified mail, return receipt
requested. A | 12 | | person who is the subject of an Order of Prohibition may
| 13 | | petition the Secretary of State for a hearing to present | 14 | | evidence of
rehabilitation or change in circumstances | 15 | | justifying the
amendment or termination of the Order of | 16 | | Prohibition.
| 17 | | G. No administrative action shall be brought by the | 18 | | Secretary of State
for relief under this Act or upon or because | 19 | | of any of the matters for
which relief is granted by this Act | 20 | | after the earlier to occur of (i) 3
years from the date upon | 21 | | which the Secretary of State had notice of facts
which in the | 22 | | exercise of reasonable diligence would lead to actual
knowledge | 23 | | of the alleged violation of the Act , or (ii) 5 years from the
| 24 | | date on which the alleged violation occurred .
| 25 | | H. The action of the Secretary of State in denying, | 26 | | suspending, or revoking
the registration of a dealer, Internet |
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| 1 | | portal, limited Canadian dealer, salesperson, investment | 2 | | adviser, or investment adviser representative, in
prohibiting
| 3 | | any person from engaging in the business of offering or selling | 4 | | securities as a
dealer, limited Canadian dealer, or | 5 | | salesperson, in prohibiting or
suspending the offer or sale of
| 6 | | securities by any person, in prohibiting a person from acting | 7 | | as an investment
adviser, federal covered investment adviser, | 8 | | or investment adviser
representative, in denying, suspending, | 9 | | or
revoking the registration of securities, in
prohibiting or | 10 | | suspending the offer or sale or proposed offer or sale of
| 11 | | securities, in imposing any fine for violation of this Act, or | 12 | | in issuing any
order shall be subject to judicial review in the | 13 | | Circuit Courts
of
Cook or Sangamon Counties in this State. The
| 14 | | Administrative Review
Law shall apply to and
govern every | 15 | | action for the judicial review of final actions or decisions
of | 16 | | the Secretary of State under this Act.
| 17 | | I. Notwithstanding any other provisions of this Act to the | 18 | | contrary,
whenever it shall appear to the Secretary of State | 19 | | that any
person is engaged or about to engage in any acts or | 20 | | practices which
constitute or will constitute a violation of | 21 | | this Act or of any rule or
regulation prescribed under | 22 | | authority of this Act, the Secretary of State
may at his or her | 23 | | discretion, through the Attorney General take any of the
| 24 | | following actions:
| 25 | | (1) File a complaint and apply for a temporary | 26 | | restraining order without
notice, and upon a proper showing |
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| 1 | | the court may enter a temporary
restraining order without | 2 | | bond, to enforce this Act.
| 3 | | (2) File a complaint and apply for a preliminary or | 4 | | permanent
injunction, and, after notice and a hearing and | 5 | | upon a proper showing,
the court may grant a preliminary or | 6 | | permanent injunction and may order the
defendant to make an | 7 | | offer of rescission with respect to any sales or
purchases | 8 | | of securities, mineral investment contracts, or mineral
| 9 | | deferred delivery contracts determined by the court to be | 10 | | unlawful under
this Act.
| 11 | | (3) Seek the seizure of assets when probable cause | 12 | | exists that the
assets
were
obtained by a defendant through | 13 | | conduct in violation of Section 12,
paragraph F, G, I, J, | 14 | | K, or L of this Act, and thereby subject to a judicial
| 15 | | forfeiture hearing as required under this Act.
| 16 | | (a) In the event that such probable cause exists | 17 | | that the subject of an
investigation who is alleged to | 18 | | have committed one of the relevant
violations of this | 19 | | Act has in his possession assets obtained as a
result | 20 | | of the conduct giving rise to the violation, the | 21 | | Secretary of
State may seek a seizure warrant in any | 22 | | circuit court in Illinois.
| 23 | | (b) In seeking a seizure warrant, the Secretary of | 24 | | State, or his
or her designee, shall submit to the | 25 | | court a sworn affidavit detailing the
probable cause | 26 | | evidence for the seizure, the location of the assets
to |
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| 1 | | be seized, the relevant violation under Section 12 of | 2 | | this Act, and
a statement detailing any known owners or | 3 | | interest holders in the
assets.
| 4 | | (c) Seizure of the assets shall be made by any | 5 | | peace officer upon
process of the seizure warrant | 6 | | issued by the court. Following the
seizure of assets | 7 | | under this Act and pursuant to a seizure warrant,
| 8 | | notice of seizure, including a description of the | 9 | | seized assets, shall
immediately be returned to the | 10 | | issuing court. Seized assets shall be
maintained | 11 | | pending a judicial forfeiture hearing in accordance | 12 | | with
the instructions of the court.
| 13 | | (d) In the event that management of seized assets | 14 | | becomes necessary
to prevent the devaluation, | 15 | | dissipation, or otherwise to preserve the
property, | 16 | | the court shall have jurisdiction to appoint a | 17 | | receiver,
conservator, ancillary receiver, or | 18 | | ancillary conservator for that
purpose, as provided in | 19 | | item (2) of this subsection.
| 20 | | (4) Seek the forfeiture of assets obtained through | 21 | | conduct in violation of
Section 12, paragraph F, G, H, I, | 22 | | J, K, or L when authorized by law. A
forfeiture must be | 23 | | ordered by a circuit court or an action brought by the
| 24 | | Secretary of State as provided for in this Act, under a | 25 | | verified complaint
for forfeiture.
| 26 | | (a) In the event assets have been seized pursuant |
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| 1 | | to this Act,
forfeiture
proceedings shall be | 2 | | instituted by the Attorney General within 45
days of | 3 | | seizure.
| 4 | | (b) Service of the complaint filed under the | 5 | | provisions of this Act
shall
be made in the manner as | 6 | | provided in civil actions in this State.
| 7 | | (c) Only an owner of or interest holder in the | 8 | | property may file an
answer asserting a claim against | 9 | | the property. For purposes of this Section,
the owner | 10 | | or interest holder shall be
referred to as claimant.
| 11 | | (d) The answer must be signed by the owner or | 12 | | interest holder under
penalty of perjury and must set | 13 | | forth:
| 14 | | (i) the caption of the proceedings as set forth | 15 | | on the notice of
pending forfeiture and the name of | 16 | | the claimant;
| 17 | | (ii) the address at which the claimant will | 18 | | accept mail;
| 19 | | (iii) the nature and extent of the claimant's | 20 | | interest in the
property;
| 21 | | (iv) the date, identity of the transferor, and | 22 | | circumstances of the
claimant's acquisition of the | 23 | | interest in the property;
| 24 | | (v) the names and addresses of all other | 25 | | persons known to have an
interest in the property;
| 26 | | (vi) the specific provisions of this Act |
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| 1 | | relied on in asserting that
the
property is not | 2 | | subject to forfeiture;
| 3 | | (vii) all essential facts supporting each | 4 | | assertion; and
| 5 | | (viii) the precise relief sought.
| 6 | | (e) The answer must be filed with the court within | 7 | | 45 days after service
of the complaint.
| 8 | | (f) A property interest is exempt from forfeiture | 9 | | under this Act if its
owner or interest holder | 10 | | establishes by a preponderance of
evidence that the | 11 | | owner or interest holder:
| 12 | | (i) is not legally accountable for the conduct | 13 | | giving rise to
the forfeiture, did not acquiesce in | 14 | | it, and did not know
and could not reasonably have | 15 | | known of the conduct or
that the conduct was likely | 16 | | to occur;
| 17 | | (ii) with respect to conveyances, did not hold | 18 | | the property
jointly or in common with a person | 19 | | whose conduct gave
rise to the forfeiture;
| 20 | | (iii) does not hold the property for the | 21 | | benefit of or as a
nominee for any person whose | 22 | | conduct gave rise to its
forfeiture and the owner | 23 | | or interest holder acquires it
as a bona fide | 24 | | purchaser for value without knowingly
taking part | 25 | | in the conduct giving rise to the forfeiture; or
| 26 | | (iv) acquired the interest after the
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| 1 | | commencement of the conduct giving rise to its | 2 | | forfeiture
and the owner or interest holder | 3 | | acquired the interest as a
mortgagee, secured | 4 | | creditor, lienholder, or bona fide
purchaser for | 5 | | value without knowledge of the conduct
that gave | 6 | | rise to the forfeiture.
| 7 | | (g) The hearing must be held within 60 days after | 8 | | the answer is filed
unless continued for good cause.
| 9 | | (h) During the probable cause portion of the | 10 | | judicial in rem proceeding
wherein the Secretary of | 11 | | State presents its case-in-chief, the court
must | 12 | | receive and consider, among other things, any relevant
| 13 | | hearsay evidence and information. The laws of evidence | 14 | | relating
to civil actions shall apply to all other | 15 | | portions of the judicial in
rem proceeding.
| 16 | | (i) The Secretary of State shall show the existence | 17 | | of probable cause
for forfeiture of the property. If | 18 | | the Secretary of State shows
probable cause, the | 19 | | claimant has the burden of showing by a
preponderance | 20 | | of the evidence that the claimant's interest in the
| 21 | | property is not subject to forfeiture.
| 22 | | (j) If the Secretary of State does not show the | 23 | | existence of probable
cause or a claimant has an | 24 | | interest that is exempt under
subdivision I (4)(d) of | 25 | | this Section, the court shall order the interest in the
| 26 | | property returned
or conveyed to the claimant and shall |
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| 1 | | order all other property
forfeited to the Secretary of | 2 | | State pursuant to all provisions of this Act. If
the | 3 | | Secretary of State does show the existence of probable
| 4 | | cause and the claimant does not establish by a | 5 | | preponderance of
the evidence that the claimant has an | 6 | | interest that is exempt under
subsection D herein, the | 7 | | court shall order all the property forfeited
to the | 8 | | Secretary of State pursuant to the provisions of the | 9 | | Section.
| 10 | | (k) A defendant convicted in any criminal | 11 | | proceeding is precluded
from later denying the | 12 | | essential allegations of the criminal offense
of which | 13 | | the defendant was convicted in any proceeding for
| 14 | | violations of the Act giving rise to forfeiture of | 15 | | property herein
regardless of the pendency of an appeal | 16 | | from that conviction.
However, evidence of the | 17 | | pendency of an appeal is admissible.
| 18 | | (l) An acquittal or dismissal in a criminal | 19 | | proceeding for violations of
the Act giving rise to the | 20 | | forfeiture of property herein shall not
preclude civil | 21 | | proceedings under this provision; however, for good
| 22 | | cause shown, on a motion by the Secretary of State, the | 23 | | court may
stay civil forfeiture proceedings during the | 24 | | criminal trial for a
related criminal indictment or | 25 | | information alleging violation of the
provisions of | 26 | | Section 12 of the Illinois Securities Law of 1953.
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| 1 | | Property subject to forfeiture under this Section | 2 | | shall not be subject
to return or release by a court | 3 | | exercising jurisdiction over a
criminal case involving | 4 | | the seizure of the property unless the return
or | 5 | | release is consented to by the Secretary of State.
| 6 | | (m) All property declared forfeited under this Act | 7 | | vests in the State on
the commission of the conduct | 8 | | giving rise to forfeiture together
with the proceeds of | 9 | | the property after that time. Any such
property or | 10 | | proceeds subsequently transferred to any person remain
| 11 | | subject to forfeiture and thereafter shall be ordered | 12 | | forfeited unless
the transferee claims and establishes | 13 | | in a hearing under the
provisions of this Act that the | 14 | | transferee's interest is exempt under
the Act. Any | 15 | | assets forfeited to the State shall be disposed of in
| 16 | | following manner:
| 17 | | (i) all forfeited property and assets shall be | 18 | | liquidated by the
Secretary of State in accordance | 19 | | with all laws and
rules governing the disposition | 20 | | of such property;
| 21 | | (ii) the Secretary of State shall provide the | 22 | | court at the time the
property and assets are | 23 | | declared forfeited a verified
statement of | 24 | | investors subject to the conduct giving rise to the
| 25 | | forfeiture;
| 26 | | (iii) after payment of any costs of sale, |
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| 1 | | receivership, storage, or
expenses for | 2 | | preservation of the property seized, other costs
| 3 | | to the State, and payment to claimants for any | 4 | | amount
deemed exempt from forfeiture, the proceeds | 5 | | from
liquidation shall be distributed pro rata to | 6 | | investors subject to the
conduct giving rise to the | 7 | | forfeiture; and
| 8 | | (iv) any proceeds remaining after all verified | 9 | | investors have
been made whole shall be | 10 | | distributed 25% to the
Securities Investors | 11 | | Education Fund, 25%
to the Securities Audit and
| 12 | | Enforcement Fund, 25% to the Attorney General or | 13 | | any
State's Attorney bringing criminal charges for | 14 | | the conduct
giving rise to the forfeiture, and 25% | 15 | | to other law
enforcement agencies participating in | 16 | | the investigation of
the criminal charges for the | 17 | | conduct giving rise to the
forfeiture. In the event | 18 | | that no other law enforcement
agencies are | 19 | | involved in the investigation of the conduct
| 20 | | giving rise to the forfeiture, then the portion to | 21 | | other law
enforcement agencies shall be | 22 | | distributed to the
Securities Investors Education | 23 | | Fund.
| 24 | | (n) The Secretary of State shall notify by | 25 | | certified mail, return
receipt
requested, all known | 26 | | investors in the matter giving rise to the forfeiture
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| 1 | | of the forfeiture proceeding and sale of assets | 2 | | forfeited arising from the
violations of this Act, and | 3 | | shall further publish notice in a paper of
general | 4 | | circulation in the district in which the violations | 5 | | were prosecuted.
The notice to investors shall | 6 | | identify the name, address, and other
identifying | 7 | | information about any defendant prosecuted for | 8 | | violations
of this Act that resulted in forfeiture and | 9 | | sale of property, the offense
for which the defendant | 10 | | was convicted, and that the court has ordered
| 11 | | forfeiture and sale of property for claims of investors | 12 | | who incurred losses
or damages as a result of the | 13 | | violations. Investors may then file a claim
in a form | 14 | | prescribed by the Secretary of State in order to share | 15 | | in
disbursement of the proceeds from sale of the | 16 | | forfeited property.
Investor claims must be filed with | 17 | | the Secretary of State within 30 days
after receipt of | 18 | | the certified mail return receipt, or within 30 days | 19 | | after the
last
date of publication of the general | 20 | | notice in a paper of general circulation
in the | 21 | | district in which the violations were prosecuted, | 22 | | whichever occurs
last.
| 23 | | (o) A civil action under this subsection must be | 24 | | commenced within 5
years
after
the last conduct giving | 25 | | rise to the forfeiture became known or should
have | 26 | | become known or 5 years after the forfeitable property |
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| 1 | | is
discovered, whichever is later, excluding time | 2 | | during which either the
property or claimant is out of | 3 | | this State or in confinement or during which
criminal | 4 | | proceedings relating to the same conduct are in | 5 | | progress.
| 6 | | (p) If property is seized for evidence and for | 7 | | forfeiture, the time
periods
for
instituting judicial | 8 | | forfeiture proceedings shall not begin until the
| 9 | | property is no longer necessary for evidence.
| 10 | | (q) Notwithstanding other provisions of this Act, | 11 | | the Secretary of State
and
a
claimant of forfeitable | 12 | | property may enter into an agreed-upon settlement
| 13 | | concerning the forfeitable property in such an amount | 14 | | and upon such
terms as are set out in writing in a | 15 | | settlement agreement.
| 16 | | (r) Nothing in this Act shall apply to property | 17 | | that constitutes
reasonable
bona
fide attorney's fees | 18 | | paid to an attorney for services rendered or to be
| 19 | | rendered in the forfeiture proceeding or criminal | 20 | | proceeding relating
directly thereto when the property | 21 | | was paid before its seizure and before
the issuance of | 22 | | any seizure warrant or court order prohibiting | 23 | | transfer of
the property and when the attorney, at the | 24 | | time he or she received the
property, did not know that | 25 | | it was property subject to forfeiture under
this Act.
| 26 | | The court shall further have jurisdiction and authority, in |
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| 1 | | addition to the
penalties and other remedies in this Act | 2 | | provided, to enter an order for
the appointment of the court or | 3 | | a person as a receiver, conservator,
ancillary receiver or | 4 | | ancillary conservator for the defendant or the
defendant's | 5 | | assets located in this State, or to require restitution,
| 6 | | damages or disgorgement of profits on behalf of the person or | 7 | | persons
injured by the act or practice constituting the subject | 8 | | matter of the
action, and may assess costs against the | 9 | | defendant for the use of the
State; provided, however, that the | 10 | | civil remedies of rescission and
appointment of a receiver, | 11 | | conservator, ancillary receiver
or ancillary conservator shall | 12 | | not be available against any person by
reason of the failure to | 13 | | file with the Secretary of State, or on account of
the contents | 14 | | of, any report of sale provided for in subsection G or P of
| 15 | | Section 4, paragraph (2) of subsection D of Sections 5 and 6, | 16 | | or paragraph
(2) of subsection F of Section 7 of this Act. | 17 | | Appeals may be
taken as in other civil cases.
| 18 | | I-5. Property forfeited under this Section is subject to | 19 | | reporting under the Seizure and Forfeiture Reporting Act. | 20 | | J. In no case shall the Secretary of State, or any of his | 21 | | or her
employees or agents, in the administration of this Act, | 22 | | incur any official or
personal liability by instituting an | 23 | | injunction or other proceeding or
by denying, suspending or | 24 | | revoking the registration of a dealer or
salesperson, or by | 25 | | denying, suspending or revoking the registration of
securities | 26 | | or prohibiting the offer or sale of securities, or by |
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| 1 | | suspending or
prohibiting any person from acting as a dealer, | 2 | | limited Canadian dealer,
salesperson, investment adviser, or | 3 | | investment adviser
representative or from offering or selling | 4 | | securities.
| 5 | | K. No provision of this Act shall be construed to require | 6 | | or to
authorize the Secretary of State to require any | 7 | | investment adviser
or federal covered investment adviser | 8 | | engaged in rendering investment
supervisory services to | 9 | | disclose the
identity, investments, or affairs of any client of | 10 | | the investment
adviser or federal covered investment adviser, | 11 | | except insofar as the
disclosure may be necessary or
| 12 | | appropriate in a particular proceeding or investigation having | 13 | | as its
object the enforcement of this Act.
| 14 | | L. Whenever, after an examination, investigation or
| 15 | | hearing, the Secretary of State deems it of public interest or | 16 | | advantage,
he or she may certify a record to the State's | 17 | | Attorney of the county in
which the act complained of, examined | 18 | | or investigated occurred. The
State's Attorney of that county | 19 | | within 90 days after receipt of the record
shall file a written | 20 | | statement at the Office of the Secretary of State,
which | 21 | | statement shall set forth the action taken upon the record, or | 22 | | if no
action has been taken upon the record that fact, together | 23 | | with the reasons
therefor, shall be stated.
| 24 | | M. The Secretary of State may initiate, take, pursue, or | 25 | | prosecute any
action authorized or permitted under Section 6d | 26 | | of the Federal 1974 Act.
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| 1 | | N. (1) Notwithstanding any provision of this Act to the | 2 | | contrary, to
encourage uniform interpretation, administration, | 3 | | and enforcement of the
provisions of this Act, the Secretary of | 4 | | State may cooperate with the
securities agencies or | 5 | | administrators of one or more states, Canadian provinces
or | 6 | | territories, or another country, the North American Securities | 7 | | Administrators Association, the Securities and Exchange | 8 | | Commission, the
Commodity Futures Trading Commission, the | 9 | | Securities Investor Protection
Corporation, any | 10 | | self-regulatory organization, and any governmental law
| 11 | | enforcement or regulatory agency.
| 12 | | (2) The cooperation authorized by paragraph (1) of this | 13 | | subsection includes,
but is not limited to, the following:
| 14 | | (a) establishing or participating in a central | 15 | | depository or depositories
for registration under this Act | 16 | | and for documents or records required under
this Act;
| 17 | | (b) making a joint audit, inspection, examination, or | 18 | | investigation;
| 19 | | (c) holding a joint administrative hearing;
| 20 | | (d) filing and prosecuting a joint civil or criminal | 21 | | proceeding;
| 22 | | (e) sharing and exchanging personnel;
| 23 | | (f) sharing and exchanging information and documents; | 24 | | or
| 25 | | (g) issuing any joint statement or policy.
| 26 | | (Source: P.A. 99-182, eff. 1-1-16; 100-512, eff. 7-1-18; |
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| 1 | | 100-699, eff. 8-3-18.)
| 2 | | (815 ILCS 5/11.7 new) | 3 | | Sec. 11.7. Vulnerable adult protection. | 4 | | (a) As used in this Section: | 5 | | "Eligible adult" means (1) a person 60 years of age or | 6 | | older or (2) a person subject to the Adult Protective Services | 7 | | Act. | 8 | | "Financial exploitation" means (1) the wrongful or | 9 | | unauthorized taking, withholding, appropriation, or use of | 10 | | money, assets, or property of an eligible adult or (2) any act | 11 | | or omission taken by a person, including through the use of a | 12 | | power of attorney, guardianship, or conservatorship of an | 13 | | eligible adult, to: | 14 | | (A) obtain control, through deception, intimidation or | 15 | | undue influence, over the eligible adult's money, assets, | 16 | | or property to deprive the eligible adult of the ownership, | 17 | | use, benefit, or possession of his or her money, assets, or | 18 | | property; or | 19 | | (B) convert money, assets, or property of the eligible | 20 | | adult to deprive such eligible adult of the ownership, use, | 21 | | benefit, or possession of his or her money, assets, or | 22 | | property. | 23 | | "Qualified individual" means any salesperson, investment | 24 | | adviser, investment adviser representative, or person who | 25 | | serves in a supervisory, compliance, legal, or investor |
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| 1 | | protection capacity for a broker-dealer or investment adviser. | 2 | | (b) Disclosures to governmental agency. If a qualified | 3 | | individual reasonably believes that financial exploitation of | 4 | | an eligible adult may have occurred, may have been attempted, | 5 | | or is being attempted, the qualified individual shall notify a | 6 | | governmental agency or agent thereof responsible for adult | 7 | | protective services and the Illinois Securities Department | 8 | | (collectively the "Agencies"). | 9 | | (c) Third-party disclosures. If a qualified individual | 10 | | reasonably believes that financial exploitation of an eligible | 11 | | adult may have occurred, may have been attempted, or is being | 12 | | attempted, the qualified individual may notify any third party | 13 | | that is reasonably associated with the eligible adult or | 14 | | otherwise permitted by law. Disclosure may not be made to any | 15 | | designated third party that is suspected of financial | 16 | | exploitation or other abuse of the eligible adult. | 17 | | (d) Delaying transactions or disbursements. | 18 | | (1) A broker-dealer or investment adviser may delay a | 19 | | transaction or disbursement from an account of an eligible | 20 | | adult or an account on which an eligible adult is a | 21 | | beneficiary if: | 22 | | (A) the broker-dealer, investment adviser, or | 23 | | qualified individual reasonably believes, after | 24 | | initiating an internal review of the requested | 25 | | transaction or disbursement, that the requested | 26 | | transaction or disbursement may result in financial |
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| 1 | | exploitation of an eligible adult; and | 2 | | (B) the broker-dealer or investment adviser: | 3 | | (i) immediately, but in no event more than 2 | 4 | | business days after the date on which the | 5 | | broker-dealer or investment adviser first delayed | 6 | | the transaction or disbursement of the funds, | 7 | | provides written notification of the delay and the | 8 | | reason for the delay to all parties authorized to | 9 | | transact business on the account, unless any such | 10 | | party is reasonably believed to have engaged in | 11 | | suspected or attempted financial exploitation of | 12 | | the eligible adult; | 13 | | (ii) immediately, but in no event more than 2 | 14 | | business days after the date on which the | 15 | | transaction or disbursement was first delayed, | 16 | | notifies the Agencies; and | 17 | | (iii) continues its internal review of the | 18 | | suspected or attempted financial exploitation of | 19 | | the eligible adult, as necessary, and provides | 20 | | updates to the Agencies upon request. | 21 | | (2) Any delay of a transaction or disbursement as | 22 | | authorized by this Section shall expire upon the sooner of: | 23 | | (A) a determination by the broker-dealer or | 24 | | investment adviser that the transaction or | 25 | | disbursement will not result in financial exploitation | 26 | | of the eligible adult; or |
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| 1 | | (B) fifteen business days after the date on which | 2 | | the broker-dealer or investment adviser first delayed | 3 | | the transaction or disbursement of the funds, unless | 4 | | either of the Agencies requests that the broker-dealer | 5 | | or investment adviser extend the delay, in which case | 6 | | the delay shall expire no more than 25 business days | 7 | | after the date on which the broker-dealer or investment | 8 | | adviser first delayed the transaction or disbursement | 9 | | of the funds, unless sooner terminated or further | 10 | | extended by either of the Agencies or an order of a | 11 | | court. | 12 | | (e) Records. A broker-dealer or investment adviser shall | 13 | | provide access to or copies of records that are relevant to the | 14 | | suspected or attempted financial exploitation of an eligible | 15 | | adult to Agencies charged with administering state adult | 16 | | protective services laws and to law enforcement, either as part | 17 | | of a referral to the Agencies or to law enforcement, or upon | 18 | | request of the agency or law enforcement pursuant to an | 19 | | investigation. The records may include historical records as | 20 | | well as records relating to the most recent transaction or | 21 | | transactions that may comprise financial exploitation of an | 22 | | eligible adult. All records made available to the Agencies | 23 | | under this Section shall not be considered a public record. | 24 | | Nothing in this provision shall limit or otherwise impede the | 25 | | authority of the Illinois Securities Department to access or | 26 | | examine the books and records of broker-dealers and investment |
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| 1 | | advisers as otherwise provided by law. | 2 | | (f) Disclosure to reporting party. Notwithstanding any | 3 | | provision of law to the contrary, the Agencies may disclose to | 4 | | any notifying qualified person the general status or final | 5 | | disposition of any investigation that arose from a report made | 6 | | by the qualified person. | 7 | | (g) Liability. The Secretary shall not bring any | 8 | | administrative or civil action against a qualified individual, | 9 | | broker-dealer, or investment adviser for delaying a | 10 | | transaction or disbursement when acting in good faith and | 11 | | exercising reasonable care in accordance with this Section.
| 12 | | (815 ILCS 5/12) (from Ch. 121 1/2, par. 137.12)
| 13 | | Sec. 12. Violation. It shall be a violation of the | 14 | | provisions of
this Act for any person:
| 15 | | A. To offer or sell any security except in accordance | 16 | | with the provisions
of this Act.
| 17 | | B. To deliver to a purchaser any security required to | 18 | | be registered
under Section 5, Section 6 or Section 7 | 19 | | hereof unless accompanied or preceded
by a prospectus that | 20 | | meets the requirements of the pertinent subsection of
| 21 | | Section 5 or of Section 6 or of Section 7.
| 22 | | C. To act as a dealer, Internet portal, salesperson, | 23 | | investment adviser, or
investment adviser representative, | 24 | | unless
registered as such, where such registration is | 25 | | required, under the
provisions of this Act.
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| 1 | | D. To fail to file with the Secretary of State any | 2 | | application,
report or document required to be filed under | 3 | | the provisions of this Act
or any rule or regulation made | 4 | | by the Secretary of State pursuant to
this Act or to fail | 5 | | to comply with the terms of any order of the
Secretary of | 6 | | State issued pursuant to Section 11 hereof.
| 7 | | E. To make, or cause to be made, (1) in any sworn | 8 | | testimony before the Secretary of State or the Illinois | 9 | | Securities Department within the Office of the Secretary, | 10 | | or application, report or
document filed under this Act or | 11 | | any rule or regulation made by the
Secretary of State | 12 | | pursuant to this Act, any statement which was false
or | 13 | | misleading with respect to any material fact or (2) any | 14 | | statement to
the effect that a security (other than a | 15 | | security issued by the State of
Illinois) has been in any | 16 | | way endorsed or approved by the Secretary of
State or the | 17 | | State of Illinois.
| 18 | | F. To engage in any transaction, practice or course of | 19 | | business in
connection with the sale or purchase of | 20 | | securities which works or tends
to work a fraud or deceit | 21 | | upon the purchaser or seller thereof.
| 22 | | G. To obtain money or property through the sale of | 23 | | securities by
means of any untrue statement of a material | 24 | | fact or any omission to
state a material fact necessary in | 25 | | order to make the statements made, in
the light of the | 26 | | circumstances under which they were made, not
misleading.
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| 1 | | H. To sign or circulate any statement, prospectus, or | 2 | | other paper or
document required by any provision of this | 3 | | Act or pertaining to any
security knowing or having
| 4 | | reasonable grounds to know any material representation | 5 | | therein contained
to be false or untrue.
| 6 | | I. To employ any device, scheme or artifice to defraud | 7 | | in connection
with the sale or purchase of any security, | 8 | | directly or indirectly.
| 9 | | J. When acting as an investment adviser, investment | 10 | | adviser
representative, or federal covered investment | 11 | | adviser, or in the course of providing investment advice, | 12 | | by any means or
instrumentality, directly or indirectly:
| 13 | | (1) To employ any device, scheme or artifice to defraud | 14 | | any client
or prospective client;
| 15 | | (2) To engage in any transaction, practice, or | 16 | | course of business
which operates as a fraud or deceit | 17 | | upon any client or prospective
client; or
| 18 | | (3) To engage in any act, practice, or course of | 19 | | business which is
fraudulent, deceptive or | 20 | | manipulative. The Secretary of State shall for
the | 21 | | purposes of this paragraph (3), by rules and | 22 | | regulations, define and
prescribe means reasonably | 23 | | designed to prevent such acts, practices,
and courses | 24 | | of business as are fraudulent, deceptive, or | 25 | | manipulative.
| 26 | | K. When offering or selling any mineral investment |
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| 1 | | contract or mineral
deferred delivery contract:
| 2 | | (1) To employ any device, scheme, or artifice to | 3 | | defraud any customer,
prospective customer, or | 4 | | offeree;
| 5 | | (2) To engage in any transaction, practice, or course | 6 | | of business that
operates as a fraud or deceit upon any | 7 | | customer, prospective customer, or
offeree; or
| 8 | | (3) To engage in any act, practice, or course of | 9 | | business that is
fraudulent, deceptive, or | 10 | | manipulative. The Secretary of State shall for
the | 11 | | purposes of this paragraph (3), by rules and | 12 | | regulations, define and
prescribe means reasonably | 13 | | designed to prevent acts, practices, and
courses of | 14 | | business as are fraudulent, deceptive, or | 15 | | manipulative.
| 16 | | L. To knowingly influence, coerce, manipulate, or | 17 | | mislead any person
engaged
in
the
preparation or audit of | 18 | | financial statements or appraisals to be used in the
offer | 19 | | or
sale of securities for the purpose of rendering such | 20 | | financial statements or
appraisals materially misleading.
| 21 | | (Source: P.A. 101-563, eff. 8-23-19.)
| 22 | | (815 ILCS 5/12.5 new) | 23 | | Sec. 12.5. Non-public distribution of information. | 24 | | Information and documents obtained or generated by employees of | 25 | | the Secretary pursuant to the provisions of Section 11 shall, |
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| 1 | | unless made a matter of public record, be deemed confidential. | 2 | | Confidential information and documents or any other non-public | 3 | | records of the Illinois Securities Department shall not be made | 4 | | public unless the Secretary or his or her designee authorizes | 5 | | the disclosure of the information or the production of the | 6 | | documents as not being contrary to the public interest. | 7 | | Notices, orders, settlement agreements, and evidence presented | 8 | | in administrative hearings shall be considered public records. | 9 | | The Illinois Securities Department administrative hearings | 10 | | shall be open to the public.
| 11 | | (815 ILCS 5/14) (from Ch. 121 1/2, par. 137.14)
| 12 | | Sec. 14. Sentence.
| 13 | | A. Any person who violates any of the provisions of | 14 | | subsection A, B, C,
or D of Section 12 or paragraph (3) of | 15 | | subsection K of Section 12 of this
Act shall be
guilty of a | 16 | | Class 4 felony.
| 17 | | B. Any person who violates any of the provisions of | 18 | | subsection E,
F, G, H, I, or J, paragraph (1) or (2) of | 19 | | subsection K, or
subsection
L
of Section 12
of this Act shall | 20 | | be guilty of a Class 3 felony.
| 21 | | B-5. A person who violates a provision of subsection E, F, | 22 | | G, H, I,
or J or paragraph (1) or (2) of subsection K of Section | 23 | | 12 of this Act by use
of a plan, program, or campaign that is | 24 | | conducted using one or more
telephones for the purpose of | 25 | | inducing the purchase or sale of securities is
guilty of a |
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| 1 | | Class 2 felony.
| 2 | | B-10. A person who in the course of violating a provision | 3 | | of
subsection E, F, G, H, I, or J or paragraph (1) or (2) of | 4 | | subsection K of
Section 12 of this Act induces a person 60 | 5 | | years of age or older to purchase
or sell securities is guilty | 6 | | of a Class 2 felony.
| 7 | | C. No prosecution for violation of any provision of this | 8 | | Act shall
bar or be barred by any prosecution for the violation | 9 | | of any other
provision of this Act or of any other statute; but | 10 | | all prosecutions
under this Act or based upon any provision of | 11 | | this Act must be commenced
within 3 years after the violation | 12 | | upon which such prosecution is based;
provided however, that if | 13 | | the accused has intentionally concealed evidence
of a violation | 14 | | of subsection E, F, G, H, I, J, or K of Section 12 of this
Act, | 15 | | the period of limitation prescribed herein shall be extended up | 16 | | to an
additional 2 years after the proper prosecuting officer | 17 | | becomes aware of
the offense but in no such event shall the | 18 | | period of limitation so extended
be more than 2 years beyond | 19 | | the expiration of the period otherwise applicable .
| 20 | | D. For the purposes of this Act all persons who shall sell | 21 | | or offer
for sale, or who shall purchase or offer to purchase, | 22 | | securities in
violation of the provisions of this Act, or who | 23 | | shall in any manner
knowingly authorize, aid or assist in any | 24 | | unlawful conduct under this Act
shall be deemed
equally guilty, | 25 | | and may be tried and punished in the county in which said
| 26 | | unlawful sale or offering for sale or unlawful purchase or |
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| 1 | | offer to
purchase was made, or in the county in which the | 2 | | securities so sold or
offered for sale or so purchased or | 3 | | offered to be purchased were delivered
or proposed to be | 4 | | delivered to the purchaser thereof or by the seller
thereof, as | 5 | | the case may be.
| 6 | | E. Any person who shall be convicted of a second or any | 7 | | subsequent
offense specified in subsection A, B, C, D, or | 8 | | paragraph (3) of
subsection K of Section 12 of this
Act
shall | 9 | | be guilty of a Class 3 felony, and any person who shall be
| 10 | | convicted of a second or any subsequent offense specified in | 11 | | subsection E, F,
G, H, I, J, or paragraph (1) or (2) of | 12 | | subsection K of
Section 12 of this Act shall be guilty of a | 13 | | Class 2 felony.
| 14 | | F. If any person referred to in this Section is not a | 15 | | natural person,
it may upon conviction of a first offense be | 16 | | fined up to $25,000, and if
convicted of a second and | 17 | | subsequent offense, may be fined up to $50,000,
in addition to | 18 | | any other sentence authorized by law.
| 19 | | G. This Act shall not be construed to repeal or affect any | 20 | | law now
in force relating to the organization of corporations | 21 | | in this State or
the admission of any foreign corporation to do | 22 | | business in this State.
| 23 | | H. For the purposes of this Act, all persons who sell or | 24 | | offer for
sale, or who purchase or offer to purchase any | 25 | | mineral investment contract
or mineral deferred delivery | 26 | | contract in violation of the provisions of this
Act or who, in |
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| 1 | | any manner, knowingly authorize, aid, or assist in any
unlawful | 2 | | sale or offer for sale or unlawful purchase or offer to | 3 | | purchase
any mineral investment contract or mineral deferred | 4 | | delivery contract shall
be deemed equally guilty and may be | 5 | | tried and punished in the county
in which the unlawful sale or | 6 | | offer for sale or unlawful purchase or offer
to purchase any | 7 | | mineral investment contract or mineral deferred delivery
| 8 | | contract was made or in the county in which the mineral | 9 | | investment
contract or mineral deferred delivery contract so | 10 | | sold or offered for sale
or so purchased or offered to be | 11 | | purchased was delivered or proposed to be
delivered to the | 12 | | purchaser thereof or by the seller thereof, as the case
may be, | 13 | | or in Sangamon County.
| 14 | | (Source: P.A. 92-308, eff. 1-1-02; 93-580, eff. 8-21-03.)
| 15 | | (815 ILCS 5/2.14 rep.)
| 16 | | Section 10. The Illinois Securities Law of 1953 is amended | 17 | | by repealing Section 2.14.
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