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Public Act 099-0182 | ||||
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AN ACT concerning business.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Securities Law of 1953 is amended | ||||
by changing Sections 4, 8, 11, 11a, 12, 13, and 18.1 and by | ||||
adding Sections 2.34, 2.35, 2.36, and 8d as follows: | ||||
(815 ILCS 5/2.34 new) | ||||
Sec. 2.34. Accredited investor. "Accredited investor" has | ||||
the
meaning given to that term in 17 CFR 230.501(a), as amended | ||||
and in effect from time to time. | ||||
(815 ILCS 5/2.35 new) | ||||
Sec. 2.35. Qualified escrowee. "Qualified escrowee" means | ||||
a person, firm, partnership, association, corporation, or | ||||
other legal entity who: (a) falls under the definition of | ||||
"title insurance company" under, and pursuant to the terms and | ||||
requirements of, the Title Insurance Act; (b) is certified as | ||||
an independent escrowee under, and pursuant to the terms and | ||||
requirements of, the Title Insurance Act; or (c) is a bank, | ||||
regulated trust company, savings bank, savings and loan | ||||
association, or credit union which is authorized to do business | ||||
in the State and which maintains at least one physical business | ||||
location within the State. |
(815 ILCS 5/2.36 new) | ||
Sec. 2.36. Registered Internet portal. "Registered | ||
Internet portal"
means an Internet portal maintained by a | ||
corporation or other legal
entity that is being used to offer | ||
or sell securities and
that meets the requirements of Section | ||
8d of this Act.
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(815 ILCS 5/4) (from Ch. 121 1/2, par. 137.4)
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Sec. 4. Exempt transactions. The provisions of Sections 2a, | ||
5, 6 and 7
of this Act shall not apply to any of the following | ||
transactions, except
where otherwise specified in this Section | ||
4:
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A. Any offer or sale, whether through a dealer or | ||
otherwise, of securities
by a person who is not an issuer, | ||
underwriter, dealer or controlling person
in respect of such | ||
securities, and who, being the bona fide owner of such
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securities, disposes thereof for his or her own account; | ||
provided, that
such offer or sale is not made directly or | ||
indirectly for the benefit of
the issuer or of an underwriter | ||
or controlling person.
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B. Any offer, sale, issuance or exchange of securities of | ||
the issuer
to or with security holders of the issuer except to | ||
or with persons who
are security holders solely by reason of | ||
holding transferable warrants,
transferable options, or | ||
similar transferable rights of the issuer, if
no commission or |
other remuneration is paid or given directly or
indirectly for | ||
or on account of the procuring or soliciting of such sale
or | ||
exchange (other than a fee paid to underwriters based on their
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undertaking to purchase any securities not purchased by | ||
security holders
in connection with such sale or exchange).
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C. Any offer, sale or issuance of securities to any | ||
corporation, bank,
savings bank, savings institution, savings | ||
and loan association, trust company,
insurance company, | ||
building and loan association, or dealer; to a pension fund,
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pension trust, or employees' profit sharing trust, other | ||
financial institution
or institutional investor, any | ||
government or political subdivision or
instrumentality | ||
thereof, whether the
purchaser is acting for itself or in some | ||
fiduciary capacity; to any
partnership or other association | ||
engaged as a substantial part of its
business or operations in | ||
purchasing or holding securities; to any trust
in respect of | ||
which a bank or trust company is trustee or co-trustee; to
any | ||
entity in which at least 90% of the equity is owned by persons
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described under subsection C, H, or S of this Section 4; to any
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employee benefit plan within the meaning of Title I of the | ||
Federal ERISA
Act if (i) the investment decision is made by a | ||
plan fiduciary as defined
in Section 3(21) of the Federal ERISA | ||
Act and such plan fiduciary is either
a bank, savings and loan | ||
association, insurance company, registered
investment adviser | ||
or an investment adviser registered under the Federal
1940 | ||
Investment Advisers Act, or (ii) the plan has total assets in |
excess
of $5,000,000, or (iii) in the case of a self-directed | ||
plan, investment
decisions are made solely by persons that are | ||
described under subsection C,
D, H or S of this Section 4; to | ||
any plan established and maintained by,
and for the benefit of | ||
the employees of, any state or political subdivision
or agency | ||
or instrumentality thereof if such plan has total assets in
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excess of $5,000,000; or to any organization described in | ||
Section 501(c)(3)
of the Internal Revenue Code of 1986, any | ||
Massachusetts or similar business
trust, or any partnership, if | ||
such organization, trust, or partnership has
total assets in | ||
excess of $5,000,000.
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D. The Secretary of State is granted authority to create by | ||
rule or
regulation a limited offering transactional exemption | ||
that furthers the
objectives of compatibility with federal | ||
exemptions and uniformity among the
states. The Secretary of | ||
State shall prescribe by rule or regulation the
amount of the | ||
fee for filing any report required under this subsection, but | ||
the
fee shall not be less than the minimum amount nor more than | ||
the maximum amount
established under Section 11a of this Act | ||
and shall not be returnable in any
event.
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E. Any offer or sale of securities by an executor, | ||
administrator,
guardian, receiver or trustee in insolvency or | ||
bankruptcy, or at any
judicial sale, or at a public sale by | ||
auction held at an advertised time
and place, or the offer or | ||
sale of securities in good faith and not for the
purpose of | ||
avoiding the provisions of this Act by a pledgee of securities
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pledged for a bona fide debt.
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F. Any offer or sale by a registered dealer, either as | ||
principal or
agent, of any securities (except face amount | ||
certificate contracts and
investment fund shares) at a price | ||
reasonably related to the current market
price of such | ||
securities, provided:
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(1) (a) the securities are issued and outstanding;
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(b) the issuer is required to file reports pursuant | ||
to Section 13 or
Section 15(d) of the Federal 1934 Act | ||
and has been subject to such
requirements during the 90 | ||
day period immediately preceding the date of the
offer | ||
or sale, or is an issuer of a security covered by | ||
Section 12(g)(2)(B)
or (G) of the Federal 1934 Act;
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(c) the dealer has a reasonable basis for believing | ||
that the issuer is
current in filing the reports | ||
required to be filed at regular intervals
pursuant to | ||
the provisions of Section 13 or Section 15(d), as the | ||
case may
be, of the Federal 1934 Act, or in the case of | ||
insurance companies exempted
from Section 12(g) of the | ||
Federal 1934 Act by subparagraph 12(g)(2)(G)
thereof, | ||
the annual statement referred to in Section | ||
12(g)(2)(G)(i) of the
Federal 1934 Act; and
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(d) the dealer has in its records, and makes | ||
reasonably available upon
request to any person | ||
expressing an interest in a proposed transaction in
the | ||
securities, the issuer's most recent annual report |
filed pursuant to
Section 13 or 15(d), as the case may | ||
be, of the Federal 1934 Act or the annual
statement in | ||
the case of an insurance company exempted from Section | ||
12(g)
of the Federal 1934 Act by subparagraph | ||
12(g)(2)(G) thereof, together with
any other reports | ||
required to be filed at regular intervals under the
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Federal 1934 Act by the issuer after such annual report | ||
or annual
statement; provided that the making | ||
available of such reports pursuant to
this | ||
subparagraph, unless otherwise represented, shall not | ||
constitute a
representation by the dealer that the | ||
information is true and correct, but
shall constitute a | ||
representation by the dealer that the information is
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reasonably current; or
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(2) (a) prior to any offer or sale, an application for | ||
the authorization
thereof and a report as set forth | ||
under sub-paragraph (d) of this
paragraph (2) has been | ||
filed by any registered dealer with and approved by
the | ||
Secretary of State pursuant to such rules and | ||
regulations as the
Secretary of State may prescribe;
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(b) the Secretary of State shall have the power by | ||
order to refuse
to approve any application or report | ||
filed pursuant to this paragraph (2) if
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(i) the application or report does not comply | ||
with the provisions of
this paragraph (2), or
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(ii) the offer or sale of such securities would |
work
or tend to work a fraud or deceit, or
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(iii) the issuer or the applicant has violated | ||
any of the
provisions of this Act;
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(c) each application and report filed pursuant to | ||
this paragraph (2)
shall be accompanied by a filing fee | ||
and an examination fee in the amount
established | ||
pursuant to Section 11a of this Act, which shall not be
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returnable in any event;
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(d) there shall be submitted to the Secretary of | ||
State no later than
120 days following the end of the | ||
issuer's fiscal year, each year
during the period of | ||
the authorization, one copy of a report which shall
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contain a balance sheet and income statement prepared | ||
as of the issuer's
most recent fiscal year end | ||
certified by an independent certified public
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accountant, together with such current information | ||
concerning the
securities and the issuer thereof as the | ||
Secretary of State may prescribe
by rule or regulation | ||
or order;
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(e) prior to any offer or sale of securities under | ||
the provisions of
this paragraph (2), each registered | ||
dealer participating in the offer or
sale of such | ||
securities shall provide upon request of prospective
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purchasers of such securities a copy of the most recent | ||
report required
under the provisions of sub-paragraph | ||
(d) of this paragraph (2);
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(f) approval of an application filed pursuant to | ||
this paragraph (2) of
subsection F shall expire 5 years | ||
after the date of the granting
of the approval, unless | ||
said approval is sooner terminated by (1) suspension or
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revocation by the Secretary of State in the same manner | ||
as is provided
for in subsections E, F and G of Section | ||
11 of this Act,
or (2) the applicant filing with the | ||
Secretary of State an affidavit to
the effect that (i) | ||
the subject securities have become exempt under | ||
Section
3 of this Act or (ii) the applicant no longer | ||
is capable of acting as
the applicant and stating the | ||
reasons therefor or (iii) the applicant no longer
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desires to act as the applicant. In the event of the | ||
filing of an
affidavit under either preceding | ||
sub-division (ii) or (iii) the
Secretary of State may | ||
authorize a substitution of applicant upon the
new | ||
applicant executing the application as originally | ||
filed. However,
the aforementioned substituted | ||
execution shall have no effect upon the
previously | ||
determined date of expiration of approval of the | ||
application.
Notwithstanding the provisions of this | ||
subparagraph (f), approvals granted
under this | ||
paragraph (2) of subsection F prior to the effective | ||
date of this
Act shall be governed by the provisions of | ||
this Act in effect on such
date of approval; and
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(g) no person shall be considered to have violated |
Section 5 of this
Act by reason of any offer or sale | ||
effected in reliance upon an
approval granted under | ||
this paragraph (2) after a termination thereof under | ||
the
foregoing subparagraph (f) if official notice of | ||
such termination has not
been circulated generally to | ||
dealers by the Secretary of State and if
such person | ||
sustains the burden of proof that he or she did not | ||
know, and in
the exercise of reasonable care, could not | ||
have known, of the
termination; or
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(3) the securities, or securities of the same class, | ||
are the subject
of an existing registration under Section 5 | ||
of this Act.
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The exemption provided in this subsection F shall apply | ||
only if the offer
or sale is made in good faith and not for the | ||
purpose of avoiding any of
the provisions of this Act, and only | ||
if the offer or sale is not made for the
direct or indirect | ||
benefit of the issuer of the securities, or the
controlling | ||
person in respect of such issuer.
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G. (1) Any offer, sale or issuance of a security, whether | ||
to residents
or to non-residents of this State, where:
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(a) all sales of such security to residents of this | ||
State (including the
most recent such sale) within the | ||
immediately preceding 12-month period
have been made | ||
to not more than 35 persons or have involved an | ||
aggregate
sales price of not more than $1,000,000;
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(b) such security is not offered or sold by means |
of any general
advertising or general solicitation in | ||
this State; and
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(c) no commission, discount, or other remuneration | ||
exceeding 20%
of the
sale price of such security, if | ||
sold to a resident of this State, is
paid or given | ||
directly or indirectly for
or on account of such sales.
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(2) In computing the number of resident purchasers or | ||
the aggregate sales
price under paragraph (1) (a) above, | ||
there shall be excluded any purchaser
or dollar amount of | ||
sales price, as the case may be, with respect to any
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security which at the time of its sale was exempt under | ||
Section 3 or was
registered under Section 5, 6 or 7 or was | ||
sold in a
transaction exempt under other subsections of | ||
this Section 4.
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(3) A prospectus or preliminary prospectus with | ||
respect to a security for
which a registration statement is | ||
pending or effective under the Federal
1933 Act shall not | ||
be deemed to constitute general advertising or general
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solicitation in this State as such terms are used in | ||
paragraph (1) (b)
above, provided that such prospectus or | ||
preliminary prospectus has not been
sent or otherwise | ||
delivered
to more than 150 residents of this State.
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(4) The Secretary of State shall by rule or regulation | ||
require the
filing of a report or reports of sales made in
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reliance upon the exemption provided by this subsection G | ||
and prescribe
the form of such report and the time within |
which such report shall be filed.
Such report shall set | ||
forth the name and address of the issuer and of the
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controlling person, if the sale was for the direct or | ||
indirect benefit
of such person, and any other information | ||
deemed necessary by the Secretary
of State to enforce | ||
compliance with this subsection G. The Secretary of
State | ||
shall prescribe by rule or regulation the amount of the fee | ||
for
filing any such report, established pursuant to Section | ||
11a
of this Act, which shall not be returnable in any | ||
event. The
Secretary of
State may impose, in such cases as | ||
he or she may deem appropriate, a penalty
for failure to | ||
file any such report in a timely manner, but no such | ||
penalty
shall exceed an amount equal to five times the | ||
filing fee. The contents
of any such report or portion | ||
thereof may be deemed confidential
by the Secretary of | ||
State by rule or order and if so deemed shall not
be
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disclosed
to the public except by order of court or in | ||
court proceedings. The
failure to file any such report | ||
shall not affect the availability of such
exemption, but | ||
such failure to file any such report shall constitute a
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violation of subsection D of Section 12 of this Act, | ||
subject to the
penalties enumerated in Section 14 of this | ||
Act. The civil remedies
provided for in subsection A of | ||
Section 13 of this Act and the civil
remedies of rescission | ||
and appointment of a receiver, conservator,
ancillary | ||
receiver or ancillary conservator provided for in |
subsection F of
Section 13 of this Act shall not be | ||
available against any person by
reason of the failure to | ||
file any such report or on account of the contents of
any | ||
such report.
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H. Any offer, sale or issuance of a security to an | ||
accredited investor provided that such security is not offered | ||
or sold by means of any general advertising or general | ||
solicitation, except as otherwise permitted in this Act. (1) | ||
any natural person
who has, or is reasonably believed by the | ||
person relying upon this subsection
H to have, a net worth or | ||
joint net worth with that person's spouse,
at the time of the | ||
offer, sale or issuance, in excess of
$1,000,000
excluding the | ||
value of a principal residence, or (2) any natural person who
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had, or is reasonably believed
by the person relying upon this | ||
subsection H to have had, an income or
joint income with that | ||
person's spouse, in excess of $200,000 in each of
the two most | ||
recent years and who reasonably expects, or is reasonably
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expected to have, an income in excess of $200,000 in the
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current year, or (3) any person that is not a natural person | ||
and in which
at least 90% of the equity interest is owned by | ||
persons who meet either of
the tests set forth in clauses (1) | ||
or (2) of this subsection H; provided
that such security is not | ||
offered or sold by means
of any general advertising or general | ||
solicitation in this State.
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I. Any offer, sale or issuance of securities to or for the | ||
benefit
of security holders of any person incident to a vote by |
such security
holders pursuant to such person's organizational | ||
document or any applicable
statute of the jurisdiction of such | ||
person's organization, on a merger,
consolidation, | ||
reclassification of securities, or sale or transfer of
assets | ||
in consideration of or exchange for securities of the same or
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another person.
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J. Any offer, sale or issuance of securities in exchange | ||
for one
or more outstanding securities, claims or property | ||
interests, or partly
in such exchange and partly for cash, | ||
where such offer, sale or issuance
is incident to a | ||
reorganization, recapitalization, readjustment,
composition or | ||
settlement of a claim, as approved by a court of competent
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jurisdiction of the United States, or any state.
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K. Any offer, sale or issuance of securities for patronage,
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or as patronage refunds, or in connection with marketing | ||
agreements by
cooperative associations organized exclusively | ||
for agricultural, producer,
marketing, purchasing, or consumer | ||
purposes; and the sale of
subscriptions for or shares of stock | ||
of cooperative associations
organized exclusively for | ||
agricultural, producer, marketing, purchasing,
or consumer | ||
purposes, if no commission or other remuneration is paid or
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given directly or indirectly for or on account of such | ||
subscription,
sale or resale, and if any person does not own | ||
beneficially more than 5%
of the aggregate amount of issued and | ||
outstanding capital stock of such
cooperative association.
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L. Offers for sale or solicitations of offers to buy (but |
not the
acceptance thereof), of securities which are the | ||
subject of a pending
registration statement filed under the | ||
Federal 1933 Act and which are the
subject of a pending | ||
application for registration under this Act.
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M. Any offer or sale of preorganization subscriptions for | ||
any securities
prior to the incorporation, organization or | ||
formation of any issuer
under the laws of the United States, or | ||
any state, or the issuance by
such issuer, after its | ||
incorporation, organization or formation, of
securities | ||
pursuant to such preorganization subscriptions, provided the
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number of subscribers does not exceed 25 and either (1) no | ||
commission
or other remuneration is paid or given directly or | ||
indirectly for or on
account of such sale or sales or issuance, | ||
or (2) if any commission or
other remuneration is paid or given | ||
directly or indirectly for or on account
of such sale or sales | ||
or issuance, the securities are not offered or sold
by any | ||
means of general advertising or general solicitation in this
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State.
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N. The execution of orders for purchase of securities by a | ||
registered
salesperson and dealer, provided such persons act as | ||
agent for the purchaser,
have made no solicitation of the order | ||
to purchase the securities, have no
direct interest in the sale | ||
or distribution of the securities ordered, receive
no | ||
commission, profit, or other compensation other than the | ||
commissions
involved in the purchase and sale of the securities | ||
and deliver to the
purchaser written confirmation of the order |
which clearly identifies the
commissions paid to the registered | ||
dealer.
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O. Any offer, sale or issuance of securities, other than | ||
fractional
undivided interests in an oil, gas or other mineral | ||
lease, right or
royalty, for the direct or indirect benefit of | ||
the issuer thereof, or of a
controlling person, whether through | ||
a dealer (acting either as principal
or agent) or otherwise, if | ||
the securities sold, immediately following
the sale or sales, | ||
together with securities already owned by the
purchaser, would | ||
constitute 50% or more of the equity interest of any
one | ||
issuer, provided that the number of purchasers is not more than | ||
5 and
provided further that no commission, discount or other | ||
remuneration
exceeding 15% of the aggregate sale price of the | ||
securities is paid or
given directly or indirectly for or on | ||
account of the sale or sales.
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P. Any offer, sale or issuance of securities
(except face | ||
amount certificate contracts and investment fund shares)
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issued by and representing an interest in an issuer which is a | ||
business
corporation incorporated under the laws of this State,
| ||
the purposes of which are to provide capital and supervision | ||
solely for
the redevelopment of blighted urban areas located in | ||
a municipality in
this State and whose assets are located | ||
entirely within that municipality,
provided: (1) no | ||
commission, discount or other remuneration
is paid or given | ||
directly or indirectly for or on account of the sale or
sales | ||
of such securities; (2) the aggregate amount of any securities |
of
the issuer owned of record or beneficially by any one person | ||
will not exceed
the lesser of $5,000 or 4% of the equity | ||
capitalization of the issuer; (3) the
officers and directors of | ||
the
corporation have been bona fide residents of the | ||
municipality not less than
3 years immediately preceding the | ||
effectiveness of the offering sheet for
the securities under | ||
this subsection P; and (4) the issuer files with the
Secretary | ||
of State an offering sheet descriptive of the securities | ||
setting
forth:
| ||
(a) the name and address of the issuer;
| ||
(b) the title and total amount of securities to be | ||
offered;
| ||
(c) the price at which the securities are to be | ||
offered; and
| ||
(d) such additional information as the Secretary of | ||
State may prescribe
by rule and regulation.
| ||
The Secretary of State shall within a reasonable time | ||
examine the
offering sheet so filed and, unless the Secretary | ||
of State shall make a
determination that the offering sheet so | ||
filed does not
conform to the requirements of this subsection | ||
P, shall declare the offering
sheet to be effective, which | ||
offering sheet shall continue effective for a
period of 12 | ||
months from the date it becomes effective. The fee for
| ||
examining the offering sheet shall be as established pursuant | ||
to Section
11a of this Act, and shall not be returnable in any | ||
event. The Secretary
of State shall by rule or regulation |
require the filing of a report or
reports of sales made to | ||
residents of this State in reliance upon the
exemption provided | ||
by this subsection P and prescribe the form of such
report and | ||
the time within which such report shall be filed. The Secretary
| ||
of State shall prescribe by rule or regulation the amount of | ||
the fee for
filing any such report, but such fee shall not be | ||
less than the minimum
amount nor more than the maximum amount | ||
established pursuant to Section
11a of this Act, and shall not | ||
be returnable in any event. The Secretary
of State may impose, | ||
in such cases as he or she may deem appropriate, a penalty
for | ||
failure to file any such report in a timely manner, but no such | ||
penalty
shall exceed an amount equal to five times the filing | ||
fee. The contents
of any such report shall be deemed | ||
confidential and shall not be disclosed
to the public except by | ||
order of court or in court proceedings. The
failure to file any | ||
such report shall not affect the availability of such
| ||
exemption, but such failure to file any such report shall | ||
constitute a
violation of subsection D of Section 12 of this | ||
Act, subject to the
penalties enumerated in Section 14 of this | ||
Act. The civil remedies
provided for in subsection A of Section | ||
13 of this Act and the civil
remedies of rescission and | ||
appointment of a receiver, conservator,
ancillary receiver or | ||
ancillary conservator provided for in subsection F of
Section | ||
13 of this Act shall not be available against any person by | ||
reason
of the failure to file any such report or on account of | ||
the contents of any
such report.
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Q. Any isolated transaction, whether effected by a dealer | ||
or
not.
| ||
R. Any offer, sale or issuance of a security to any person | ||
who purchases
at least $150,000 of the securities being | ||
offered, where the purchaser's
total purchase price does not, | ||
or it is reasonably believed by the person
relying upon this | ||
subsection R that said purchase price does not, exceed
20 | ||
percent of the purchaser's net worth at the time of sale, or if | ||
a
natural person a joint net worth with that person's spouse, | ||
for one
or any combination of the following: (i) cash, (ii) | ||
securities for which
market quotations are readily available, | ||
(iii) an unconditional obligation
to pay cash or securities for | ||
which quotations are readily available,
which obligation is to | ||
be discharged within five years of the sale of the
securities | ||
to the purchaser, or (iv) the cancellation of any indebtedness
| ||
owed by the issuer to the purchaser; provided that such | ||
security is not
offered or sold by means of any general | ||
advertising or general solicitation
in this State.
| ||
S. Any offer, sale or issuance of a security to any person | ||
who is, or
who is reasonably believed by the person relying | ||
upon this subsection S to
be, a director, executive officer, or | ||
general partner of the issuer of the
securities being offered | ||
or sold, or any director, executive officer, or
general partner | ||
of a general partner of that issuer. For purposes of this
| ||
subsection S, "executive officer" shall mean the president, any | ||
vice
president in charge of a principal business unit, division |
or function
(such as sales, administration or finance), any | ||
other officer who performs
a policy making function, or any | ||
other person who performs similar policy
making functions for | ||
the issuer. Executive officers of subsidiaries may be
deemed | ||
executive officers of the issuer if they perform such policy | ||
making
functions for the issuer.
| ||
A document being filed pursuant to this Section 4 shall be | ||
deemed filed,
and any fee paid pursuant to this Section 4 shall | ||
be deemed paid, upon the date
of actual receipt thereof by the | ||
Secretary of State.
| ||
T. An offer or sale of a security by an issuer that is | ||
organized
and, as of the time of the offer and the time of | ||
sale, in good standing under
the laws of the State of Illinois, | ||
made solely to persons or entities that are, as of the time of | ||
the offer and time of sale, residents of the State of Illinois, | ||
provided: | ||
(1) The offering meets all of the requirements of the
| ||
federal exemption for intrastate offerings provided in | ||
Section
3(a)(11) of the Securities Act of 1933 (15 U.S.C. | ||
77c(a)(11)) and
Rule 147 adopted under the Securities Act | ||
of 1933 (17 CFR
230.147). | ||
(2) The aggregate purchase price of all securities sold | ||
by an issuer in reliance on the exemption under this | ||
subsection, within any 12-month period, does not exceed: | ||
(i) $1,000,000; or (ii) $4,000,000 if the issuer has | ||
undergone and made available (directly, or through a |
registered Internet portal), to each prospective purchaser | ||
and the Secretary of State, copies of its most recent | ||
financial statements which have been audited by an | ||
independent auditor and certified by a senior officer of | ||
the issuer as fairly, completely, and accurately | ||
presenting the financial condition of the issuer, in all | ||
material respects, as of the dates indicated therein. | ||
Amounts received in connection with any offer or sale to | ||
any accredited investor or any of the following shall not | ||
count toward the calculation of the foregoing monetary | ||
limitations: | ||
(a) any entity (including, without limitation, any | ||
trust) in which all of the equity interests are owned | ||
by (or with respect to any trust, the primary | ||
beneficiaries are) persons who are accredited | ||
investors or who meet one or more of the criteria in | ||
subparagraphs (b) through (d) of this paragraph (2); | ||
(b) with respect to participating in an offering of | ||
a particular issuer, a natural person serving as an | ||
officer, director, partner, or trustee of, or | ||
otherwise occupying similar status or performing | ||
similar functions with respect to, such issuer; | ||
(c) with respect to participating in an offering of | ||
a particular issuer, a natural person or entity who | ||
owns 10% or more of the then aggregate outstanding | ||
voting capital securities of such issuer; or |
(d) such other person or entity as the Secretary of | ||
State may hereafter exempt by rule. | ||
The Secretary of State may hereafter cumulatively | ||
increase the dollar limitations provided in this | ||
paragraph. | ||
(3) The aggregate amount sold by an issuer to any | ||
purchaser (other than an accredited investor or a person or | ||
entity which meets one or more of the criteria in | ||
subparagraphs (a) through (d) of paragraph (2) of this | ||
subsection T) in an offering of securities made in reliance | ||
on the exemption provided in this subsection T, within any | ||
consecutive 12-month period, does not exceed $5,000. | ||
(4) The Secretary of State shall establish by rule the | ||
duties of the issuer including disclosure and filing | ||
requirements, treatment of escrow funds and agreements, | ||
production of financial statements, and other requirements | ||
as deemed necessary. | ||
(5) The issuer has made available, to each prospective | ||
purchaser and the Secretary of State, copies of its most | ||
recent financial statements personally certified by one or | ||
more senior officers of the issuer as fairly, completely, | ||
and accurately presenting the financial condition of the | ||
issuer, in all material respects, as of the dates indicated | ||
therein. | ||
(6) No commission or other remuneration is paid or | ||
given
directly or indirectly to any person or entity |
(including,
without limitation, any registered Internet | ||
portal) for
soliciting any person in this State, except to | ||
registered dealers
and registered salespersons licensed in | ||
this State. | ||
(7) Not less than 15 days before the earlier of
the | ||
first sale of securities made in reliance on the exemption | ||
provided in this subsection T,
or the use of any general | ||
solicitation with respect thereto
(other than a general | ||
announcement made by or on behalf of), an issuer shall file | ||
forms, materials, and fees as required by the Secretary of | ||
State by rule. | ||
The Secretary of State shall prescribe by rule the | ||
amount of the fee for filing the notice required in | ||
subparagraph (a), established pursuant to Section
11a of | ||
this Act. The
Secretary of State may impose, in such cases | ||
as he or she may
deem appropriate, a penalty for failure to | ||
file any such notice
in a timely manner, but no such | ||
penalty shall exceed an
amount equal to 5 times the filing | ||
fee. The contents of any
such notice or portion thereof may | ||
be deemed confidential by the
Secretary of State by rule or | ||
order and if so deemed shall not
be disclosed to the public | ||
except by order of court or in court
proceedings. The | ||
failure to file any such notice does not
affect the | ||
availability of such exemption, but such failure to
file | ||
any such report constitutes a violation of subsection
D of | ||
Section 12 of this Act and is subject to the penalties and |
remedies available in this Act and under the law. | ||
(8) All payments for purchase of securities offered
| ||
pursuant to the exemption provided under this subsection T | ||
are made directly to, and held by,
the qualified escrowee | ||
identified in the escrow agreement
required pursuant to | ||
subparagraph (c) of paragraph (4). | ||
(9) The issuer includes each of the following in one or | ||
more of the offering materials delivered to a prospective | ||
purchaser, or to which a prospective purchaser has been | ||
granted electronic access, in connection with the | ||
offering: | ||
(a) a description of the issuer, its type of | ||
entity, the address, and telephone number of its | ||
principal office; | ||
(b) a reasonably detailed description of the | ||
intended use of the offering proceeds, including any | ||
amounts to be paid, as compensation or otherwise, to | ||
any owner, executive officer, director, managing | ||
member, or other person occupying a similar status or | ||
performing similar functions on behalf of the issuer; | ||
(c) the identity of all persons owning more than | ||
10% of the voting capital securities of the issuer; | ||
(d) the identity of the executive officers, | ||
directors, managing members, and other persons | ||
occupying a similar status or performing similar | ||
functions in the name of and on behalf of the issuer, |
including their titles and a reasonably detailed | ||
description of their prior experience; | ||
(e) the identity of any person or entity who has | ||
been or will be retained by the issuer to assist the | ||
issuer in conducting the offering and sale of the | ||
securities (including all registered Internet portals | ||
but excluding persons acting solely as accountants or | ||
attorneys and employees whose primary job | ||
responsibilities involve the operating business of the | ||
issuer rather than assisting the issuer in raising | ||
capital) and a description of the consideration being | ||
paid to each such person or entity for such assistance; | ||
(f) any additional information material to the | ||
offering, including a description of significant | ||
factors that make the offering speculative or risky for | ||
the purchaser; | ||
(g) the information required pursuant to | ||
subparagraphs (a) and (b) of paragraph (4) of this | ||
subsection T; | ||
(h) such other information as the Secretary of | ||
State may hereafter require by rule. | ||
(10) The issuer (directly or through a registered | ||
Internet
portal) requires each purchaser to certify, in | ||
writing or
electronically, that the purchaser: | ||
(a) is a resident of the State of Illinois; | ||
(b) understands that he or she is investing in a |
high-risk, highly speculative, business venture, that | ||
he or she may lose all of his or her investment, and | ||
that he or she can afford such a loss of his or her | ||
investment; | ||
(c) understands that the securities being offered | ||
are highly illiquid, that there is no ready market for | ||
the sale of such securities, that it may be difficult | ||
or impossible for purchaser to sell or otherwise | ||
dispose of such securities, and (where applicable) | ||
that purchaser may be required to hold the securities | ||
for an indefinite period of time; and | ||
(d) understands that purchaser may be subject to | ||
the payment of certain taxes with respect to the | ||
securities being purchased whether or not purchaser | ||
has sold, or otherwise disposed of, such securities or | ||
whether purchaser has received any distributions or | ||
other amounts from the issuer. | ||
(11) The issuer (directly or through a registered | ||
Internet
portal) obtains from each purchaser of a security | ||
offered under
this subsection T evidence that the purchaser | ||
is a resident of
this State and, if applicable, is an | ||
accredited investor. Without limiting the generality of | ||
the
foregoing, and not to the exclusion of other reasonable | ||
methods
which may be used by the issuer in connection with | ||
the
foregoing, an issuer may rely. | ||
(12) The issuer (and to the extent a registered |
Internet
portal is used, such registered Internet portal) | ||
maintains
records of all offers and sales of securities | ||
made
pursuant to the exemption granted by this subsection T | ||
and provides ready access to such records to the Secretary | ||
of State,
upon notice from the Secretary of State. | ||
(13) The issuer is not, either before or as a result of
| ||
the offering: | ||
(a) an investment company, as defined in Section 3 | ||
of the Investment Company Act of 1940 (15 U.S.C. | ||
80a-3), as amended and in effect (unless the issuer | ||
qualifies for exclusion from such definition pursuant | ||
to one or more of the exceptions provided in Section | ||
3(c) of the Investment Company Act of 1940, any other | ||
provision of the Investment Company Act of 1940, or any | ||
administrative rule or regulation promulgated with | ||
respect to the Investment Company Act of 1940 or in | ||
connection therewith); or | ||
(b) subject to the reporting requirements of | ||
Section 13 or 15(d) of the Securities Exchange Act of | ||
1934 (15 U.S.C. 78m or 15 U.S.C. 78o(d). | ||
(14) Neither the issuer, nor any person affiliated with
| ||
the issuer (either before or as a result of the offering), | ||
nor
the offering itself, nor the registered Internet portal | ||
(to the
extent used) is subject to disqualification | ||
established by the
Secretary of State by rule or contained | ||
in the Securities Act of 1933
(15 U.S.C. 77c(a)(11)) and |
Rule 147 adopted under the Securities Act of 1933 (17 CFR | ||
230.147), unless both of the following are
met: | ||
(a) on a showing of good cause and without
| ||
prejudice to any other action by the Secretary of | ||
State,
the Secretary of State determines that it is not | ||
necessary
under the circumstances that an exemption is | ||
denied; and | ||
(b) the issuer establishes that it made a factual
| ||
inquiry into whether any disqualification existed | ||
under
this paragraph (14), but did not know, and in the | ||
exercise of reasonable care could not have known, that | ||
a
disqualification existed under this paragraph (14); | ||
the nature
and scope of the requisite inquiry will vary | ||
based on the
circumstances of the issuer and the other | ||
offering
participants. | ||
(Source: P.A. 90-70, eff. 7-8-97; 91-809, eff. 1-1-01.)
| ||
(815 ILCS 5/8) (from Ch. 121 1/2, par. 137.8)
| ||
Sec. 8. Registration of dealers, limited Canadian dealers, | ||
internet portals,
salespersons, investment advisers, and | ||
investment adviser representatives.
| ||
A. Except as otherwise provided in this subsection A, every | ||
dealer,
limited Canadian dealer, salesperson, investment | ||
adviser,
and investment adviser representative shall be | ||
registered as such with the
Secretary of State. No dealer or |
salesperson need be registered as such when
offering or selling | ||
securities in transactions
exempted by subsection A, B, C, D, | ||
E, G, H, I, J, K, M, O, P, Q, R or S of
Section 4 of this Act, | ||
provided that such dealer or salesperson is not
regularly | ||
engaged in the business of offering or selling securities
in | ||
reliance
upon the exemption set forth in subsection G or M of | ||
Section 4 of this Act. No
dealer, issuer or controlling person | ||
shall employ a salesperson unless such
salesperson is | ||
registered as such with the Secretary of State or is employed
| ||
for the purpose of offering or selling securities solely in
| ||
transactions exempted by subsection A, B, C,
D, E, G, H, I, J, | ||
K, L, M, O, P, Q, R or S of Section 4 of this Act;
provided that | ||
such salesperson need not be registered when
effecting | ||
transactions in this State limited to those transactions | ||
described
in Section 15(h)(2) of the Federal 1934 Act or | ||
engaging in the
offer or sale of securities in respect of which | ||
he or she has beneficial
ownership and is a controlling person. | ||
The Secretary of State may, by
rule, regulation or order and | ||
subject to such terms, conditions, and
fees as
may be | ||
prescribed in such rule, regulation or order, exempt from the
| ||
registration requirements of this Section 8 any investment | ||
adviser, if the
Secretary of State shall find that such | ||
registration is not necessary in
the public interest by reason | ||
of the small number of clients or otherwise
limited character | ||
of operation of such investment adviser.
|
B. An application for registration as a dealer or limited | ||
Canadian
dealer, executed, verified, or
authenticated by or on | ||
behalf of the applicant,
shall be filed with the Secretary of | ||
State, in such form as the Secretary of
State may by rule, | ||
regulation or order prescribe, setting forth or accompanied
by:
| ||
(1) The name and address of the applicant, the location | ||
of its principal
business office and all branch offices, if | ||
any, and the
date of its organization;
| ||
(2) A statement of any other Federal or state licenses | ||
or
registrations
which have been granted the applicant and | ||
whether any such licenses or
registrations have ever been | ||
refused, cancelled, suspended, revoked or
withdrawn;
| ||
(3) The assets and all liabilities, including | ||
contingent
liabilities of
the applicant, as of a date not | ||
more than 60 days prior to the filing of
the application;
| ||
(4) (a) A brief description of any civil or criminal
| ||
proceeding of which
fraud is an essential element pending | ||
against the applicant and whether the
applicant has ever | ||
been convicted of a felony, or of any misdemeanor of
which | ||
fraud is an essential element;
| ||
(b) A list setting forth the name, residence and | ||
business address and
a 10 year occupational statement of | ||
each principal of the applicant and a
statement describing | ||
briefly any civil or criminal proceedings of which
fraud is | ||
an essential element pending against any such principal and | ||
the
facts concerning any conviction of any such principal |
of a felony, or of
any misdemeanor of which fraud is an | ||
essential element;
| ||
(5) If the applicant is a corporation: a list
of its | ||
officers and directors
setting forth the residence and | ||
business address of each; a 10-year
occupational statement | ||
of each such officer or director; and a
statement | ||
describing briefly any civil or criminal proceedings of | ||
which
fraud is an essential element pending against each | ||
such officer or
director and the facts concerning any | ||
conviction of any officer or director
of a felony, or of | ||
any misdemeanor of which fraud is an essential element;
| ||
(6) If the applicant is a sole proprietorship, a | ||
partnership,
limited liability company, an unincorporated | ||
association or any similar
form of business organization:
| ||
the name, residence and business address of the proprietor | ||
or of each
partner, member, officer, director, trustee or | ||
manager; the limitations, if
any, of the liability of each | ||
such individual; a 10-year occupational
statement of each | ||
such individual; a statement describing briefly any civil
| ||
or criminal proceedings of which fraud is an essential | ||
element pending
against each such individual and the facts | ||
concerning any conviction of
any such individual of a | ||
felony, or of any misdemeanor of
which fraud is an | ||
essential element;
| ||
(7) Such additional information as the Secretary of
| ||
State may by rule or regulation prescribe as necessary to |
determine the
applicant's financial responsibility, | ||
business repute and qualification to
act as a dealer.
| ||
(8) (a) No applicant shall be registered or | ||
re-registered as a
dealer or limited Canadian dealer
under | ||
this Section unless and until each principal of the dealer | ||
has
passed an examination conducted by the Secretary of | ||
State or a
self-regulatory organization of securities | ||
dealers or similar person, which
examination has been | ||
designated by the Secretary of State by rule,
regulation or | ||
order to be satisfactory for purposes of determining | ||
whether
the applicant has sufficient knowledge of the | ||
securities business and laws
relating thereto to act as a | ||
registered dealer. Any dealer who was
registered on | ||
September 30, 1963, and has continued to be so registered;
| ||
and any principal of any registered dealer, who was acting | ||
in such capacity
on and continuously since September 30, | ||
1963; and any individual who has
previously passed a | ||
securities dealer examination administered by the
| ||
Secretary of State or any examination designated by the | ||
Secretary of State
to be satisfactory for purposes of | ||
determining whether the applicant has
sufficient knowledge | ||
of the securities business and laws relating thereto
to act | ||
as a registered dealer by rule, regulation or order, shall | ||
not be
required to pass an examination in order to continue | ||
to act in such
capacity. The Secretary of State may by | ||
order waive the examination
requirement for any principal |
of an applicant for registration under this
subsection B | ||
who has had such experience or education relating to the
| ||
securities business as may be determined by the Secretary | ||
of State to be
the equivalent of such examination. Any | ||
request for such a waiver shall be
filed with the Secretary | ||
of State in such form as may be prescribed by rule
or | ||
regulation.
| ||
(b) Unless an applicant is a member of the body | ||
corporate known as the
Securities Investor Protection | ||
Corporation established pursuant to the Act
of Congress of | ||
the United States known as the Securities Investor
| ||
Protection Act of 1970, as amended, a member of an | ||
association of
dealers registered as a national securities | ||
association pursuant to Section
15A of the Federal 1934 | ||
Act,
or a member of a self-regulatory organization or stock | ||
exchange in Canada
which the Secretary of State has | ||
designated by rule or order,
an applicant shall not be | ||
registered or
re-registered unless and until there is filed | ||
with the Secretary of State
evidence that such applicant | ||
has in effect insurance or other equivalent
protection for | ||
each client's cash or securities held by such applicant, | ||
and
an undertaking that such applicant will continually | ||
maintain such insurance
or other protection during the | ||
period of registration or re-registration.
Such insurance | ||
or other protection shall be in a form and amount | ||
reasonably
prescribed by the Secretary of State by rule or |
regulation.
| ||
(9) The application for the registration of a dealer or | ||
limited Canadian
dealer shall be
accompanied by a filing | ||
fee and a fee for each branch office in this State, in
each | ||
case in the amount established pursuant to Section 11a of | ||
this
Act, which fees shall not be returnable in any event.
| ||
(10) The Secretary of State shall notify the dealer or | ||
limited Canadian
dealer by written notice (which may be by | ||
electronic or
facsimile transmission) of the effectiveness | ||
of the registration as a dealer in
this State.
| ||
(11) Any change which renders no longer accurate any
| ||
information
contained in any application for registration | ||
or re-registration of a
dealer or limited Canadian dealer | ||
shall be reported to the Secretary of
State within 10 | ||
business days
after the occurrence of such change; but in | ||
respect to assets and
liabilities only materially adverse | ||
changes need be reported.
| ||
C. Any registered dealer, limited Canadian dealer, issuer, | ||
or
controlling person desiring to
register a salesperson shall | ||
file an application with the Secretary of
State, in such form | ||
as the Secretary of State may by rule or regulation
prescribe, | ||
which the salesperson is required by this Section to provide
to | ||
the dealer, issuer, or controlling person, executed, verified, | ||
or
authenticated by the salesperson setting forth or
| ||
accompanied by:
|
(1) the name, residence and business address of the | ||
salesperson;
| ||
(2) whether any federal or State license or | ||
registration as dealer,
limited Canadian dealer, or | ||
salesperson has ever been refused the salesperson
or | ||
cancelled, suspended, revoked, withdrawn, barred, limited, | ||
or
otherwise adversely affected in a similar manner or | ||
whether the salesperson has
ever been censured or expelled;
| ||
(3) the nature of employment with, and names and | ||
addresses of, employers
of the salesperson for the 10 years | ||
immediately preceding the date of
application;
| ||
(4) a brief description of any civil or criminal | ||
proceedings of which
fraud is an essential element pending | ||
against the salesperson, and whether
the salesperson has | ||
ever been convicted of a felony, or of any misdemeanor
of | ||
which fraud is an essential element;
| ||
(5) such additional information as the Secretary of | ||
State may by rule,
regulation or order prescribe as | ||
necessary to determine the salesperson's
business repute | ||
and qualification to act as a salesperson; and
| ||
(6) no individual shall be registered or re-registered | ||
as a
salesperson
under this Section unless and until such | ||
individual has passed an
examination conducted by the | ||
Secretary of State or a self-regulatory
organization of | ||
securities dealers or similar person, which examination | ||
has
been designated by the Secretary of State by rule, |
regulation or order to be
satisfactory for purposes of | ||
determining whether the applicant has
sufficient knowledge | ||
of the securities business and laws relating thereto
to act | ||
as a registered salesperson.
| ||
Any salesperson who was registered prior to September | ||
30, 1963, and has
continued to be so registered, and any | ||
individual who has passed a securities
salesperson
| ||
examination administered by the Secretary of State or an | ||
examination
designated by the Secretary of State by rule, | ||
regulation or order to be
satisfactory for purposes of | ||
determining whether the applicant has
sufficient knowledge | ||
of the securities business and laws relating thereto
to act | ||
as a registered salesperson, shall not be required to pass | ||
an
examination in order to continue to act as a | ||
salesperson. The Secretary of
State may by order waive the | ||
examination requirement for any applicant for
registration | ||
under this subsection C who has had such experience or
| ||
education relating to the securities business as may be | ||
determined by the
Secretary of State to be the equivalent | ||
of such examination. Any request
for such a waiver shall be | ||
filed with the Secretary of State in such form
as may be | ||
prescribed by rule, regulation or order.
| ||
(7) The application for registration of a salesperson | ||
shall be
accompanied
by a filing fee and a Securities Audit | ||
and Enforcement Fund fee, each
in the amount established | ||
pursuant to Section 11a of this Act, which shall
not be |
returnable in any event.
| ||
(8) Any change which renders no longer accurate any
| ||
information
contained in any application for registration | ||
or re-registration as a
salesperson shall be reported to | ||
the Secretary of State within 10 business
days after the | ||
occurrence of such change. If the activities are terminated
| ||
which rendered an individual a salesperson for the dealer, | ||
issuer or
controlling person, the dealer, issuer or | ||
controlling person, as the case
may be, shall notify the | ||
Secretary of State, in writing, within 30 days of
the | ||
salesperson's cessation of activities, using the | ||
appropriate termination
notice form.
| ||
(9) A registered salesperson may transfer his or her
| ||
registration
under this Section 8 for the unexpired term | ||
thereof from one registered
dealer or limited Canadian | ||
dealer to another by the giving of notice of the
transfer | ||
by the new
registered dealer or limited Canadian dealer to | ||
the Secretary of State in
such form and subject to
such | ||
conditions as the Secretary of State shall by rule or | ||
regulation
prescribe. The new registered dealer or limited | ||
Canadian dealer shall
promptly file an application
for | ||
registration of such salesperson as provided in this | ||
subsection C,
accompanied by the filing fee prescribed by | ||
paragraph (7) of this
subsection C.
| ||
C-5. Except with respect to federal covered investment |
advisers whose only
clients
are investment companies as defined | ||
in the Federal 1940 Act, other investment
advisers, federal | ||
covered investment advisers, or any similar person which the
| ||
Secretary of State may prescribe by rule or order, a federal | ||
covered investment
adviser shall file with the Secretary of | ||
State, prior to acting as a federal
covered investment adviser | ||
in this State, such documents as have been filed
with the | ||
Securities and Exchange Commission as the Secretary of State by | ||
rule
or order may prescribe. The notification of a federal | ||
covered investment
adviser shall be accompanied by a | ||
notification filing fee established pursuant
to Section 11a of | ||
this Act, which shall not be returnable in any event. Every
| ||
person acting as a federal covered investment adviser in this | ||
State shall file
a notification filing and pay an annual | ||
notification filing fee established
pursuant to Section 11a of | ||
this Act, which is not
returnable in any event. The failure to | ||
file any such notification shall
constitute a violation of | ||
subsection D of Section 12 of this Act, subject to
the | ||
penalties enumerated in Section 14 of this Act.
Until October | ||
10, 1999 or other date as may be legally permissible, a
federal | ||
covered investment adviser who fails to file the notification | ||
or
refuses to pay the fees as required by this subsection shall | ||
register as an
investment adviser with the Secretary of State | ||
under Section 8 of this
Act.
The civil remedies
provided for in | ||
subsection A of Section 13 of this Act and the civil remedies
| ||
of rescission and appointment of receiver, conservator, |
ancillary receiver, or
ancillary conservator provided for in | ||
subsection F of Section 13 of this Act
shall not be available | ||
against any person by reason of the failure to file any
such | ||
notification or to pay the notification fee or on account of | ||
the contents
of any such notification.
| ||
D. An application for registration as an investment | ||
adviser,
executed, verified, or authenticated by or on behalf | ||
of the applicant, shall be
filed with
the Secretary of State, | ||
in such form
as the Secretary of State may by rule or | ||
regulation prescribe, setting
forth or accompanied by:
| ||
(1) The name and form of organization under which the | ||
investment adviser
engages or intends to engage in | ||
business; the state or country and date of
its | ||
organization; the location
of the adviser's principal | ||
business office and branch offices, if any; the
names and | ||
addresses of the adviser's principal, partners, officers,
| ||
directors, and persons performing similar functions or, if | ||
the
investment adviser is an individual, of the individual; | ||
and the
number of the adviser's employees who perform | ||
investment advisory functions;
| ||
(2) The education, the business affiliations for the | ||
past 10 years, and
the present business affiliations of the | ||
investment adviser and of
the adviser's principal, | ||
partners, officers, directors, and persons
performing | ||
similar functions and of any person controlling the
|
investment adviser;
| ||
(3) The nature of the business of the investment | ||
adviser,
including the manner of giving advice and | ||
rendering analyses or reports;
| ||
(4) The nature and scope of the authority of the | ||
investment
adviser with respect to clients' funds and | ||
accounts;
| ||
(5) The basis or bases upon which the investment | ||
adviser is
compensated;
| ||
(6) Whether the investment adviser or any principal,
| ||
partner, officer, director, person performing similar | ||
functions or person
controlling the investment adviser (i) | ||
within 10 years of the
filing of the application has been | ||
convicted of a felony, or of
any misdemeanor of which fraud | ||
is an essential element, or (ii) is
permanently or | ||
temporarily enjoined by order or judgment from acting as an
| ||
investment adviser, underwriter, dealer, principal or | ||
salesperson, or
from engaging in or continuing any conduct | ||
or practice in connection with
any such activity or in | ||
connection with the purchase or sale of any
security, and | ||
in each case the facts relating to the conviction,
order or | ||
judgment;
| ||
(7) (a) A statement as to whether the investment | ||
adviser is
engaged or is to engage primarily in the | ||
business of rendering investment
supervisory services; and
| ||
(b) A statement that the investment adviser will |
furnish his,
her, or its clients with such information as | ||
the Secretary of State
deems necessary in the form | ||
prescribed by the
Secretary of State by rule or regulation;
| ||
(8) Such additional information as the Secretary of | ||
State may, by rule,
regulation or order prescribe as | ||
necessary to determine the applicant's
financial | ||
responsibility, business repute and qualification to act | ||
as an
investment adviser.
| ||
(9) No applicant shall be registered or re-registered | ||
as an investment
adviser under this Section unless and | ||
until each principal of the applicant
who is actively | ||
engaged in the conduct and management of the applicant's
| ||
advisory business in this State has passed an examination | ||
or completed an
educational program conducted by the | ||
Secretary of State or an association
of investment advisers | ||
or similar person, which examination or educational
| ||
program has been designated by the Secretary of State by | ||
rule, regulation
or order to be satisfactory for purposes | ||
of determining whether the
applicant has sufficient | ||
knowledge of the securities business and laws
relating | ||
thereto to conduct the business of a registered investment | ||
adviser.
| ||
Any person who was a registered investment adviser | ||
prior to September 30,
1963, and has continued to be so | ||
registered, and any individual who has
passed an investment | ||
adviser examination administered by the Secretary of
|
State, or passed an examination or completed an educational | ||
program
designated by the Secretary of State by rule, | ||
regulation or order to be
satisfactory for purposes of | ||
determining whether the applicant has
sufficient knowledge | ||
of the securities business and laws relating thereto
to | ||
conduct the business of a registered investment adviser, | ||
shall not be
required to pass an examination or complete an | ||
educational program in
order to continue to act as an | ||
investment adviser. The Secretary of State
may by order | ||
waive the examination or educational program requirement | ||
for any
applicant for registration under this subsection D | ||
if the principal
of the applicant who is actively engaged | ||
in the conduct and management of the
applicant's advisory | ||
business in this State has had such experience
or education | ||
relating to the securities business as may be determined by | ||
the
Secretary of State to be the equivalent of the | ||
examination or
educational program. Any request for a | ||
waiver shall be filed
with the Secretary of State in such | ||
form as may be prescribed by
rule or regulation.
| ||
(10) No applicant shall be registered or re-registered | ||
as an
investment adviser under this Section 8 unless the | ||
application for
registration or re-registration is | ||
accompanied by an application for
registration or | ||
re-registration for each person
acting as an investment | ||
adviser representative on
behalf of the adviser and
a | ||
Securities Audit and Enforcement Fund fee that shall not be |
returnable in any
event is paid with respect to each | ||
investment adviser representative.
| ||
(11) The application for registration of an investment | ||
adviser shall be
accompanied by a filing fee and a fee for | ||
each branch office in this State, in
each case in the | ||
amount established pursuant to Section 11a of this
Act, | ||
which fees shall not be returnable in any event.
| ||
(12) The Secretary of State shall notify the investment | ||
adviser by written
notice (which may be by electronic or | ||
facsimile transmission)
of
the effectiveness of the | ||
registration as an investment adviser in this State.
| ||
(13) Any change which renders no longer accurate any | ||
information contained
in any application for registration | ||
or re-registration of an investment adviser
shall be | ||
reported to the Secretary of State within 10 business days | ||
after the
occurrence of the change. In respect to assets | ||
and liabilities of
an investment adviser that retains | ||
custody of clients' cash or
securities or accepts | ||
pre-payment of fees in excess of $500 per client and
6 or | ||
more months in advance only materially adverse changes need | ||
be reported by
written notice (which may be by electronic | ||
or facsimile
transmission) no later
than the close of | ||
business on the second business day following the discovery
| ||
thereof.
| ||
(14) Each application for registration as an | ||
investment adviser shall
become effective automatically on |
the 45th day following the filing of the
application, | ||
required documents or information, and payment of the | ||
required
fee unless (i) the Secretary of State has | ||
registered the investment adviser
prior to that date or | ||
(ii) an action with respect to the applicant is
pending | ||
under Section 11 of this Act.
| ||
D-5. A registered investment adviser or federal covered | ||
investment adviser
desiring to register an investment adviser | ||
representative shall file an
application with the Secretary of | ||
State, in the form as the Secretary of State
may by rule or | ||
order prescribe, which the investment adviser representative | ||
is
required by this Section to provide to the investment | ||
adviser, executed,
verified, or authenticated by the | ||
investment adviser representative and setting
forth or | ||
accompanied by:
| ||
(1) The name, residence, and business address of the | ||
investment
adviser representative;
| ||
(2) A statement whether any federal or state license or | ||
registration as a
dealer, salesperson, investment adviser, | ||
or investment adviser representative
has ever been | ||
refused, canceled, suspended, revoked or withdrawn;
| ||
(3) The nature of employment with, and names and | ||
addresses of,
employers of the investment adviser | ||
representative for the 10 years immediately
preceding the | ||
date of application;
|
(4) A brief description of any civil or criminal | ||
proceedings, of which
fraud is an essential element, | ||
pending against the investment adviser
representative and | ||
whether the investment adviser representative has ever | ||
been
convicted of a felony or of any misdemeanor of which | ||
fraud is an essential
element;
| ||
(5) Such additional information as the Secretary of | ||
State may by rule or
order prescribe as necessary to | ||
determine the investment adviser
representative's business | ||
repute or qualification to act as an investment
adviser | ||
representative;
| ||
(6) Documentation that the individual has passed an | ||
examination conducted
by the Secretary of State, an | ||
organization of investment advisers, or similar
person, | ||
which examination has been designated by the Secretary of | ||
State by rule
or order to be satisfactory for purposes of | ||
determining whether the
applicant has sufficient knowledge | ||
of the investment advisory or securities
business and laws | ||
relating to that business to act as a registered investment
| ||
adviser representative; and
| ||
(7) A Securities Audit and Enforcement Fund fee | ||
established under
Section 11a of this Act, which shall not | ||
be returnable in any event.
| ||
The Secretary of State may by order waive the examination | ||
requirement for an
applicant for registration under this | ||
subsection D-5 who has had the experience
or education relating |
to the investment advisory or securities business as may
be | ||
determined by the Secretary of State to be the equivalent of | ||
the
examination. A request for a waiver shall be filed with the | ||
Secretary of State
in the form as may be prescribed by rule or | ||
order.
| ||
A change that renders no longer accurate any information | ||
contained in any
application for registration or | ||
re-registration as an investment adviser
representative must | ||
be reported to the Secretary of State within 10 business
days | ||
after the occurrence of the change. If the activities that | ||
rendered an
individual an investment adviser representative | ||
for the investment adviser are
terminated, the investment | ||
adviser shall notify the Secretary of State in
writing (which | ||
may be by electronic or facsimile transmission), within 30 days
| ||
of the investment adviser representative's termination, using | ||
the
appropriate termination notice form as the Secretary of | ||
State may prescribe by
rule or order.
| ||
A registered investment adviser representative may | ||
transfer his or her
registration under this Section 8 for the | ||
unexpired term of the registration
from one registered | ||
investment adviser to another by the giving of notice of
the | ||
transfer by the new investment adviser to the Secretary of | ||
State in the
form and subject to the conditions as the | ||
Secretary of State shall prescribe.
The new registered | ||
investment adviser shall promptly file an application for
| ||
registration of the investment adviser representative as |
provided in this
subsection, accompanied by the Securities | ||
Audit and Enforcement Fund fee
prescribed by paragraph (7) of | ||
this
subsection D-5.
| ||
E. (1) Subject to the provisions of subsection F of Section | ||
11 of
this Act, the registration of a dealer, limited Canadian | ||
dealer,
salesperson, investment adviser, or investment adviser
| ||
representative may be denied, suspended or revoked if the | ||
Secretary of State
finds that the dealer, limited Canadian | ||
dealer, internet portal, salesperson,
investment adviser, or | ||
investment adviser representative or any
principal officer, | ||
director, partner, member, trustee, manager or any
person who | ||
performs a similar function of the dealer, limited Canadian
| ||
dealer, internet portal, or investment adviser:
| ||
(a) has been convicted of any felony
during the 10 year | ||
period preceding the date of filing of any application for
| ||
registration or at any time thereafter, or of any | ||
misdemeanor of
which fraud is an essential element;
| ||
(b) has engaged in any unethical practice in connection | ||
with any
security, or in any fraudulent business practice;
| ||
(c) has failed to account for any money or property, or | ||
has failed to
deliver any security, to any person entitled | ||
thereto when due or within
a reasonable time thereafter;
| ||
(d) in the case of a dealer, limited Canadian dealer, | ||
or investment
adviser, is insolvent;
| ||
(e) in the case of a dealer, limited Canadian dealer,
|
salesperson, or registered principal of a dealer or
limited | ||
Canadian dealer
(i) has
failed
reasonably to supervise the
| ||
securities activities of any of its salespersons or other | ||
employees and the
failure
has permitted or facilitated a | ||
violation of Section 12 of this Act or (ii) is
offering or | ||
selling or has offered or sold securities in this
State | ||
through a salesperson other than a registered salesperson, | ||
or, in
the case of a salesperson, is selling or has sold | ||
securities in this State
for a dealer, limited Canadian | ||
dealer, issuer or controlling person with
knowledge that | ||
the
dealer, limited Canadian dealer, issuer or controlling | ||
person has not
complied with the provisions of
this Act
or | ||
(iii) has failed reasonably to supervise the
| ||
implementation of compliance measures following notice by
| ||
the Secretary of State of noncompliance with the Act or
| ||
with the regulations promulgated thereunder or both or (iv) | ||
has failed to
maintain and enforce written procedures to | ||
supervise the types of
business in which it engages and to | ||
supervise the activities of its
salespersons that are | ||
reasonably designed to achieve compliance with applicable
| ||
securities laws and regulations;
| ||
(f) in the case of an investment adviser, has failed | ||
reasonably to
supervise the advisory activities of any of | ||
its investment adviser
representatives or employees and | ||
the
failure has permitted or facilitated a violation of | ||
Section 12 of this Act;
|
(g) has violated any of the provisions of this Act;
| ||
(h) has made any material misrepresentation to the | ||
Secretary of State
in connection with any information | ||
deemed necessary by the Secretary of
State to determine a | ||
dealer's, limited Canadian dealer's, or investment
| ||
adviser's financial responsibility
or a dealer's, limited | ||
Canadian dealer's, investment adviser's,
salesperson's, or | ||
investment
adviser representative's business repute or
| ||
qualifications, or has refused to furnish any such | ||
information
requested by the Secretary of State;
| ||
(i) has had a license or registration under any Federal | ||
or State law
regulating securities, commodity futures
| ||
contracts,
or stock futures contracts refused, cancelled, | ||
suspended, withdrawn,
revoked, or otherwise
adversely | ||
affected in a similar manner;
| ||
(j) has had membership
in or
association with any | ||
self-regulatory
organization registered under the Federal | ||
1934 Act or the Federal 1974 Act
suspended, revoked, | ||
refused, expelled, cancelled, barred, limited in any
| ||
capacity, or
otherwise adversely affected in a similar | ||
manner
arising from any fraudulent or deceptive act or a | ||
practice in violation of
any rule, regulation or standard | ||
duly promulgated by the self-regulatory
organization;
| ||
(k) has had any order entered against it after notice | ||
and opportunity
for hearing by a securities agency of any | ||
state, any foreign government
or agency thereof, the |
Securities and Exchange Commission, or the Federal
| ||
Commodities Futures Trading Commission arising from any | ||
fraudulent or
deceptive act or a practice in violation of | ||
any statute, rule or regulation
administered or | ||
promulgated by the agency or commission;
| ||
(l) in the case of a dealer or limited Canadian dealer, | ||
fails to
maintain a minimum net capital
in an amount which | ||
the Secretary of State may by rule or regulation require;
| ||
(m) has conducted a continuing course of dealing of | ||
such
nature as to demonstrate an inability to properly | ||
conduct the business of
the dealer, limited Canadian | ||
dealer, salesperson, investment
adviser,
or investment | ||
adviser representative;
| ||
(n) has had, after notice and opportunity for hearing, | ||
any injunction or
order entered against it or license or | ||
registration refused, cancelled,
suspended, revoked, | ||
withdrawn, limited, or otherwise adversely
affected in a | ||
similar manner by any state or federal body,
agency or | ||
commission regulating banking, insurance, finance or small | ||
loan
companies, real estate or mortgage brokers or | ||
companies, if the
action resulted from any act found by the | ||
body, agency or
commission to be a fraudulent or deceptive | ||
act or practice in violation of
any statute, rule or | ||
regulation administered or
promulgated by the body, agency | ||
or commission;
| ||
(o) has failed to file a return, or to pay the tax, |
penalty or interest
shown in a filed return, or to pay any | ||
final assessment of tax, penalty or
interest, as required | ||
by any tax Act administered by the Illinois
Department of | ||
Revenue, until such time as the requirements of
that tax | ||
Act are satisfied;
| ||
(p) in the case of a natural person who is a dealer, | ||
limited Canadian
dealer, salesperson,
investment adviser, | ||
or investment adviser representative, has defaulted on
an | ||
educational loan guaranteed by the
Illinois Student | ||
Assistance Commission, until the
natural person has | ||
established a satisfactory repayment record as determined | ||
by
the Illinois Student Assistance Commission;
| ||
(q) has failed to maintain the books and records | ||
required under this Act
or rules or regulations promulgated | ||
under this Act or under any requirements
established by the | ||
Securities and Exchange Commission or a self-regulatory
| ||
organization;
| ||
(r) has refused to allow or otherwise impeded designees | ||
of the Secretary
of
State from conducting an audit, | ||
examination, inspection, or investigation
provided for | ||
under Section 8 or 11 of this Act;
| ||
(s) has failed to maintain any minimum net capital or | ||
bond requirement set
forth in this Act or any rule or | ||
regulation promulgated under this Act;
| ||
(t) has refused the Secretary of State or his or her | ||
designee access to
any office or location within an office |
to conduct an investigation, audit,
examination, or | ||
inspection;
| ||
(u) has advised or caused a public pension fund or | ||
retirement system
established under the Illinois Pension | ||
Code to make an investment or engage in
a transaction not | ||
authorized by that Code;
| ||
(v) if a corporation, limited liability company, or | ||
limited liability
partnership has been suspended, | ||
canceled, revoked, or has failed to register as
a foreign
| ||
corporation, limited liability company, or limited | ||
liability partnership
with the Secretary
of State;
| ||
(w) is permanently or temporarily enjoined by any court | ||
of competent
jurisdiction, including any state, federal, | ||
or foreign government, from
engaging
in or continuing any | ||
conduct or practice involving any aspect of the securities
| ||
or commodities business or in any other business where the | ||
conduct or practice
enjoined involved investments, | ||
franchises, insurance, banking, or finance;
| ||
(2) If the Secretary of State finds that any registrant or | ||
applicant for
registration is no longer in existence or has | ||
ceased to do business as a
dealer, limited Canadian dealer, | ||
internet portal, salesperson, investment
adviser, or | ||
investment adviser representative, or is subject to an
| ||
adjudication
as a person under legal disability or to the | ||
control of a
guardian, or cannot be located after reasonable | ||
search, or has failed
after written notice to pay to the |
Secretary of State any additional fee
prescribed by this | ||
Section or specified by rule or regulation, or if a
natural | ||
person, has defaulted on an educational loan guaranteed by the | ||
Illinois
Student Assistance Commission, the Secretary of State | ||
may by order cancel the
registration or application.
| ||
(3) Withdrawal of an application for registration or | ||
withdrawal from
registration as a dealer, limited Canadian | ||
dealer, salesperson,
investment adviser, or investment adviser | ||
representative becomes effective
30 days after receipt of an | ||
application to withdraw or within such
shorter period of time | ||
as the Secretary of State may determine, unless any
proceeding | ||
is pending under Section 11 of this Act when the application is
| ||
filed or a proceeding is instituted within 30 days after the | ||
application is
filed. If a proceeding is pending or instituted, | ||
withdrawal becomes effective
at such time and upon such | ||
conditions as the Secretary
of State by order determines. If no | ||
proceeding is pending or instituted and
withdrawal | ||
automatically becomes effective, the Secretary of State may
| ||
nevertheless institute a revocation or suspension proceeding | ||
within 2
years after withdrawal became effective and enter a | ||
revocation or suspension
order as of the last date on which | ||
registration was effective.
| ||
F. The Secretary of State shall make available upon request | ||
the date
that each dealer, investment adviser, salesperson, or | ||
investment
adviser representative was granted
registration, |
together with the name and address of the dealer, limited
| ||
Canadian dealer, or issuer on
whose behalf the salesperson is | ||
registered, and all
orders of the Secretary of State denying or | ||
abandoning an application, or
suspending or revoking | ||
registration, or censuring the persons.
The Secretary of State | ||
may designate by rule, regulation or order the
statements, | ||
information or reports submitted to or filed with him or
her | ||
pursuant to this Section 8 which the Secretary of State | ||
determines are
of a sensitive nature and therefore should be | ||
exempt from public
disclosure. Any such statement, information | ||
or report shall be
deemed confidential and shall not be | ||
disclosed to the public except upon the
consent of the person | ||
filing or submitting the statement,
information or report or by | ||
order of court or in court proceedings.
| ||
G. The registration or re-registration of a dealer or | ||
limited Canadian
dealer and of all salespersons
registered upon | ||
application of the dealer or limited Canadian dealer shall
| ||
expire on the next
succeeding anniversary date of the | ||
registration or re-registration of the
dealer; and the | ||
registration or re-registration of an investment
adviser and of | ||
all investment adviser representatives registered upon
| ||
application of the investment adviser shall expire on the next | ||
succeeding
anniversary date of the
registration of the | ||
investment adviser; provided, that the
Secretary of State may | ||
by rule or regulation prescribe an alternate date which
any |
dealer registered under the Federal 1934 Act or a member of any
| ||
self-regulatory association approved pursuant thereto, a | ||
member of a
self-regulatory organization or stock exchange in | ||
Canada, or any investment
adviser may elect
as
the expiration | ||
date of its dealer or limited Canadian dealer and
salesperson | ||
registrations, or the expiration date of its investment adviser
| ||
registration, as the case may be. A
registration of a | ||
salesperson registered upon application of an issuer or
| ||
controlling person shall expire on the next succeeding | ||
anniversary date of
the registration, or upon termination or | ||
expiration of the
registration of the securities, if any, | ||
designated in the application for his
or her registration or | ||
the alternative date as the Secretary may prescribe by
rule or | ||
regulation. Subject to paragraph (9) of subsection C of this | ||
Section
8, a salesperson's registration also shall terminate | ||
upon cessation of his or
her employment, or termination of his | ||
or her appointment or authorization, in
each case by the person | ||
who applied for the salesperson's registration,
provided that | ||
the Secretary of State may by rule or regulation prescribe an
| ||
alternate date for the expiration of the registration.
| ||
H. Applications for re-registration of dealers, limited | ||
Canadian
dealers, internet portals, salespersons, investment | ||
advisers, and investment
adviser representatives shall be | ||
filed with the Secretary of State prior
to the expiration of | ||
the then current registration and
shall
contain such |
information as may be required by the Secretary of
State upon | ||
initial application with such omission therefrom or
addition | ||
thereto as the Secretary of State may authorize or prescribe. | ||
Each
application for re-registration of a dealer, limited | ||
Canadian dealer, internet portal, or
investment adviser
shall | ||
be accompanied by a filing fee, each application for
| ||
re-registration as a salesperson shall be accompanied by a | ||
filing fee and a
Securities Audit and Enforcement Fund fee | ||
established pursuant to Section
11a of this Act, and
each | ||
application for re-registration as an investment adviser | ||
representative
shall be accompanied by a Securities Audit and | ||
Enforcement Fund fee
established under Section 11a of this Act,
| ||
which shall not be returnable in any event. Notwithstanding
the | ||
foregoing, applications for
re-registration of dealers, | ||
limited Canadian dealers, internet portals, and investment
| ||
advisers may be filed within 30 days
following the expiration | ||
of the registration provided that the applicant pays
the annual | ||
registration fee together with an additional amount equal to
| ||
the annual registration fee and files any other information or | ||
documents that
the Secretary of State may prescribe by rule
or | ||
regulation or order. Any application filed within 30 days | ||
following the
expiration of the registration shall be | ||
automatically effective as of the
time of the earlier | ||
expiration provided that the proper fee has been paid
to the | ||
Secretary of State.
| ||
Each registered dealer, limited Canadian dealer, internet |
portal, or investment adviser
shall continue to be
registered | ||
if the registrant changes his, her, or its form of organization
| ||
provided that the dealer or investment adviser files an | ||
amendment to his,
her, or its application not later than 30 | ||
days following the occurrence of the
change and pays the | ||
Secretary of State a fee in the amount established under
| ||
Section 11a of this Act.
| ||
I. (1) Every registered dealer, limited Canadian dealer, | ||
internet portal, and investment
adviser shall make and keep
for | ||
such periods, such accounts, correspondence,
memoranda, | ||
papers, books and records as the Secretary of State may by rule | ||
or
regulation prescribe. All records so required shall be | ||
preserved for 3 years
unless the Secretary of State by rule, | ||
regulation or order prescribes otherwise
for particular types | ||
of records.
| ||
(2) Every registered dealer, limited Canadian dealer, | ||
internet portal, and investment
adviser shall file such | ||
financial reports as the Secretary of State may by rule
or | ||
regulation
prescribe.
| ||
(3) All the books and records referred to in paragraph (1) | ||
of this
subsection I are subject at any time or from time to | ||
time to such
reasonable periodic, special or other audits, | ||
examinations, or inspections by
representatives of the | ||
Secretary of State, within or without this State, as the
| ||
Secretary of State deems necessary or appropriate in the public |
interest or for
the protection of investors.
| ||
(4) At the time of an audit, examination, or inspection, | ||
the Secretary of
State, by his or her designees, may
conduct an | ||
interview of any person employed or appointed by or
affiliated | ||
with a registered dealer, limited Canadian dealer, internet | ||
portal, or investment
advisor, provided that the
dealer, | ||
limited Canadian dealer, internet portal, or investment | ||
advisor shall be given
reasonable
notice of the time and place | ||
for the interview. At the option of the dealer,
limited | ||
Canadian dealer, internet portal, or
investment advisor, a | ||
representative of the dealer or investment advisor with
| ||
supervisory responsibility over the individual being | ||
interviewed may be present
at the interview.
| ||
J. The Secretary of State may require by rule or regulation | ||
the
payment of an additional fee for the filing of information | ||
or documents
required to be filed by this Section which have | ||
not been filed in a timely
manner. The Secretary of State may | ||
also require by rule or regulation the
payment of an | ||
examination fee for administering any examination which it
may | ||
conduct pursuant to subsection B, C, D, or D-5 of this
Section | ||
8.
| ||
K. The Secretary of State may declare any application for
| ||
registration or limited registration
under this Section 8 | ||
abandoned by order if the applicant fails to pay any
fee or |
file any information or document required under this Section 8 | ||
or by
rule or regulation for more than 30 days after the | ||
required payment or
filing date. The applicant may petition the | ||
Secretary of State for a
hearing within 15 days after the | ||
applicant's receipt of the order of
abandonment, provided that | ||
the petition sets forth the grounds
upon which the applicant | ||
seeks a hearing.
| ||
L. Any document being filed pursuant to this Section 8 | ||
shall be deemed
filed, and any fee being paid pursuant to this | ||
Section 8 shall be deemed
paid, upon the date of actual receipt | ||
thereof by the Secretary of State or
his or her designee.
| ||
M. The Secretary of State shall provide to the Illinois | ||
Student
Assistance
Commission annually or at mutually agreed | ||
periodic intervals the names and
social security numbers of | ||
natural persons registered under subsections B, C,
D, and D-5 | ||
of this Section. The Illinois Student Assistance Commission | ||
shall
determine if any student loan defaulter is registered as | ||
a dealer, limited
Canadian dealer, internet portal | ||
salesperson, or investment adviser under this Act and report
| ||
its determination to the Secretary of State or his or her | ||
designee.
| ||
(Source: P.A. 92-308, eff. 1-1-02; 93-580, eff. 8-21-03.)
| ||
(815 ILCS 5/8d new) |
Sec. 8d. Offerings made through
registered Internet | ||
portals. | ||
(a) An issuer shall make an offering or
sale of securities | ||
pursuant to subsection T of Section 4 of this Act
through the | ||
use of one or more registered Internet portals. | ||
(b) The Internet portal: | ||
(1) shall be a registered broker-dealer under the
| ||
Securities Exchange Act of 1934 (15 U.S.C. 78o); | ||
(2) shall be a funding portal registered under the
| ||
Securities Act of 1933 (15 U.S.C. 77d-1) and the
Securities | ||
and Exchange Commission has adopted rules
under authority | ||
of Section 3(h) of the Securities
Exchange Act of 1934 (15 | ||
U.S.C. 78c) and Section
304 of the Jumpstart Our Business | ||
Startups
Act (P.L. 112-106) governing funding portals; | ||
(3) shall be a dealer registered under this Act as of
| ||
the date of any offer or sale of securities made
through | ||
the Internet portal; or | ||
(4) shall, to the extent it meets
the qualifications | ||
for exemption from registration
pursuant to subsection (d) | ||
of this Section: | ||
(A) file, not later than 30 days
before the date of | ||
the first offer or sale of
securities made within this | ||
State, an
application for registration (or renewal of
| ||
registration, as applicable) as a registered
Internet | ||
portal with the Secretary of State, in
writing or in | ||
electronic form as prescribed by
the Secretary of |
State, which the Secretary of
State shall make | ||
available as an electronic
document on the Secretary of | ||
State's Internet
website, containing such information | ||
and
required deliveries as specified therein; and | ||
(B) pay the application filing fee
established | ||
under Section 11a of this Act; the Secretary of State | ||
shall, within a reasonable
time, examine the filed | ||
application and other
materials filed and, approve or | ||
deny the application. | ||
(c) If any change occurs in the information submitted by,
| ||
or on behalf of, an Internet portal to the Secretary of State,
| ||
the Internet portal shall notify the Secretary of State within | ||
10
days after such change occurs and shall provide the | ||
Secretary of
State with such additional information (if any) | ||
requested by the
Secretary of State in connection therewith. | ||
(d) Notwithstanding anything contained in this Act to the
| ||
contrary, neither an Internet portal nor its owning or | ||
operating
entity is required to register as a dealer or an
| ||
investment advisor under this Act if each of the following | ||
applies
with respect to the Internet portal and its owning or | ||
operating
entity: | ||
(1) It does not solicit purchases, sales, or offers
to | ||
buy the securities offered or displayed on the
Internet | ||
portal. | ||
(2) It does not collect or hold funds in
connection | ||
with any purchase, sale, or offer to buy any
securities |
offered or displayed on the Internet portal. | ||
(3) It does not compensate employees, agents, or
other | ||
persons for the solicitation or based on the sale
of | ||
securities displayed or referenced on the Internet
portal. | ||
(4) It is not compensated based on the amount of
| ||
securities sold. | ||
(5) The fee it charges an issuer for an offering of | ||
securities on the Internet portal is a fixed amount for | ||
each offering, a variable amount based on the length of | ||
time that the securities are offered on the Internet | ||
portal, a variable amount based on the total proposed | ||
offering amount, or any combination of such fixed and | ||
variable amounts. | ||
(6) It does not offer investment advice or
| ||
recommendations; however, an Internet portal
is not deemed | ||
to be offering investment advice or
recommendations simply | ||
by virtue of: | ||
(A) selecting transactions in which the
Internet | ||
portal shall serve as an intermediary; | ||
(B) establishing reasonable selection criteria
for | ||
an issuer to meet in order to establish an offer or
| ||
sale of securities through the Internet portal; | ||
(C) establishing reasonable selection criteria
for | ||
a potential purchaser to meet in order to
participate | ||
in an offer or sale of securities made
through the | ||
Internet portal; or |
(D) terminating an issuer transaction at any
time | ||
before the first sale of the securities of such
issuer | ||
if the Internet portal determines such action
is | ||
appropriate, after reasonable due diligence, to
| ||
protect potential purchasers, and the Internet portal
| ||
is able to direct the qualified escrowee to return all | ||
funds then provided by potential purchasers, if
any. | ||
(7) It does not engage in such other
activities as the | ||
Secretary of State, by rule, determines
are prohibited. | ||
(e) Upon completion of an offering made pursuant to | ||
subsection T of Section 4, each registered Internet portal | ||
involved with the transactions (and the issuer, to the extent | ||
applicable) shall store any and all electronic materials | ||
related to the completed offering (including copies of all | ||
offering documents, all offering materials, and all purchaser | ||
information) on a secure, non-public, server or in such other | ||
manner as the Secretary of State may hereafter deem acceptable | ||
by rule.
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(815 ILCS 5/11) (from Ch. 121 1/2, par. 137.11)
| ||
Sec. 11. Duties and powers of the Secretary of State.
| ||
A. (1) The administration of this Act is vested in the | ||
Secretary of State,
who may from time to time make, amend and | ||
rescind such rules and
regulations as may be necessary to carry | ||
out this Act, including rules and
regulations governing | ||
procedures of registration, statements, applications and
|
reports for various classes of securities, persons and matters | ||
within his or
her jurisdiction and defining any terms, whether | ||
or not used in this Act,
insofar as the definitions are not | ||
inconsistent with this Act. The rules and
regulations adopted | ||
by the Secretary of State under this Act shall be effective
in | ||
the manner provided for in the Illinois Administrative | ||
Procedure Act.
| ||
(2) Among other things, the Secretary of State shall have | ||
authority, for
the purposes of this Act, to prescribe the form | ||
or forms in which required
information shall be set forth, | ||
accounting practices, the items or
details to be shown in | ||
balance sheets and earning statements, and the
methods to be | ||
followed in the preparation of accounts, in the appraisal
or | ||
valuation of assets and liabilities, in the determination of
| ||
depreciation and depletion, in the differentiation of | ||
recurring and
non-recurring income, in the differentiation of | ||
investment and operating
income, and in the preparation of | ||
consolidated balance sheets or income
accounts of any person, | ||
directly or indirectly, controlling or
controlled by the | ||
issuer, or any person under direct or indirect common
control | ||
with the issuer.
| ||
(3) No provision of this Act imposing any liability shall | ||
apply to any act
done or omitted in good faith in conformity | ||
with any rule or regulation of the
Secretary of State under | ||
this Act, notwithstanding that the rule
or regulation may, | ||
after the act or omission, be amended or
rescinded or be |
determined by judicial or other authority to be invalid for any
| ||
reason.
| ||
(4) The Securities Department of the Office of the | ||
Secretary of State shall
be deemed a criminal justice agency | ||
for purposes of all federal and state laws
and regulations and, | ||
in that capacity, shall be entitled to access to any
| ||
information available to criminal justice agencies
and has the | ||
power to
appoint special agents to conduct all investigations, | ||
searches, seizures,
arrests, and other duties imposed under the | ||
provisions of any law
administered by the Department. The | ||
special agents have and may
exercise all the powers of peace | ||
officers solely for the purpose of
enforcing provisions of this | ||
Act.
| ||
The Director must authorize to each special agent employed | ||
under
this Section a distinct badge that, on its face, (i) | ||
clearly states that
the badge is authorized by the Department | ||
and (ii) contains a
unique and identifying number.
| ||
Special agents shall comply with all training requirements
| ||
established for law enforcement officers by provisions of the
| ||
Illinois Police Training Act.
| ||
(5) The Secretary of State, by rule, may conditionally or | ||
unconditionally
exempt any person, security, or transaction, | ||
or any class or classes of
persons, securities,
or transactions | ||
from any provision of Section 5, 6, 7, 8, 8a, or 9 of this
Act | ||
or of any rule promulgated under these Sections, to the extent | ||
that
such
exemption is
necessary or appropriate in the public |
interest, and is consistent with the
protection of investors.
| ||
B. The Secretary of State may, anything in this Act to the | ||
contrary
notwithstanding, require financial statements and | ||
reports of the issuer,
dealer, internet portal, salesperson, | ||
investment adviser, or investment adviser
representative as | ||
often as circumstances may
warrant. In addition, the Secretary | ||
of
State may secure information or books and records from or | ||
through others
and may make or cause to be made investigations | ||
respecting the business,
affairs, and property of the issuer of | ||
securities, any person involved in the
sale or offer for sale, | ||
purchase or offer to purchase of any mineral investment
| ||
contract, mineral deferred delivery contract, or security and | ||
of dealers, internet portals,
salespersons, investment | ||
advisers, and investment adviser
representatives that are | ||
registered or are the
subject of an application for | ||
registration under this Act. The
costs of an investigation | ||
shall be borne by the registrant or
the applicant, provided | ||
that the registrant or applicant shall not
be obligated to pay | ||
the costs without his, her or its consent in
advance.
| ||
C. Whenever it shall appear to the Secretary of State, | ||
either upon
complaint or otherwise, that this Act, or any rule | ||
or regulation
prescribed under authority thereof, has been or | ||
is about to be violated,
he or she may, in his or her | ||
discretion, do one or more of the
following:
| ||
(1) require or permit the person to file with the | ||
Secretary
of State a statement in writing under oath, or |
otherwise, as to all the facts
and circumstances concerning | ||
the subject matter which the Secretary of State
believes to | ||
be in the public interest to investigate, audit, examine, | ||
or
inspect;
| ||
(2) conduct an investigation, audit, examination, or | ||
inspection as
necessary or advisable for the protection of | ||
the interests of the
public; and
| ||
(3) appoint investigators to conduct all | ||
investigations, searches,
seizures,
arrests, and other | ||
duties imposed under the provisions of any law
administered | ||
by the Department. The Director must authorize to each
| ||
investigator employed under this Section a distinct badge
| ||
that,
on its face,
(i) clearly states that the badge is | ||
authorized by the Department and
(ii) contains a unique and | ||
identifying number.
| ||
D. (1) For the purpose of all investigations, audits, | ||
examinations, or
inspections which in the opinion
of the | ||
Secretary of State are necessary and proper for the enforcement
| ||
of this Act, the Secretary of State or a person designated by | ||
him or
her is empowered to administer oaths and affirmations, | ||
subpoena witnesses,
take evidence, and require, by subpoena or | ||
other lawful means provided by
this Act or the rules adopted by | ||
the Secretary of State,
the production of any books and | ||
records, papers,
or other
documents which the Secretary of | ||
State or a person designated by him
or her deems relevant or | ||
material to the inquiry.
|
(2) The Secretary of
State or a person designated by him or | ||
her is further empowered to
administer oaths and affirmations, | ||
subpoena witnesses, take evidence, and
require the production | ||
of any books and records, papers, or other documents
in this
| ||
State at the request of a securities agency of another state, | ||
if the
activities constituting the alleged violation for which | ||
the information is
sought would be in violation of Section 12 | ||
of this Act if the activities
had occurred in this State.
| ||
(3) The Circuit Court of any County of this State, upon | ||
application of the
Secretary of State or a person designated by | ||
him or her may order the
attendance of witnesses, the | ||
production of books and records, papers, accounts
and documents | ||
and the giving of testimony before the Secretary of State or a
| ||
person designated by him or her; and any failure to obey the | ||
order
may be punished by the Circuit Court as a contempt | ||
thereof.
| ||
(4) The fees of subpoenaed witnesses under this Act for
| ||
attendance and travel shall be the same as fees of witnesses | ||
before the
Circuit Courts of this State, to be paid when the | ||
witness
is excused from further attendance, provided, the | ||
witness is
subpoenaed at the instance of the Secretary of | ||
State; and payment of the fees shall be made and audited in the | ||
same manner as other expenses of
the Secretary of State.
| ||
(5) Whenever a subpoena is issued at the request of a | ||
complainant or
respondent as the case may be, the Secretary of | ||
State may require that the cost
of service and the fee of the |
witness shall be borne by the party at whose
instance the | ||
witness is summoned.
| ||
(6) The Secretary of State shall have power at his or her | ||
discretion, to
require a deposit to cover the cost of the | ||
service and
witness fees and the payment of the legal witness | ||
fee and mileage to the
witness served with subpoena.
| ||
(7) A subpoena issued under this Act shall be served in the | ||
same manner
as a subpoena issued out of a circuit court.
| ||
(8) The Secretary of State may in any investigation, | ||
audits, examinations,
or inspections cause the taking of | ||
depositions of persons residing within or
without this State in | ||
the manner provided in civil actions under the laws of
this | ||
State.
| ||
E. Anything in this Act to the contrary notwithstanding:
| ||
(1) If the Secretary of State shall find that the offer | ||
or sale or
proposed offer or sale or method of offer or | ||
sale of any securities by any
person, whether exempt or | ||
not, in this State, is fraudulent, or would
work or tend to | ||
work a fraud or deceit, or is being offered or sold in
| ||
violation of Section 12,
or there has been a failure or | ||
refusal to submit any notification filing or
fee required | ||
under this Act,
the Secretary of State may by written order | ||
prohibit
or suspend the offer or sale of securities by that | ||
person or deny or revoke the
registration of the securities | ||
or the exemption from registration
for the securities.
| ||
(2) If the Secretary of State shall find that any |
person has violated
subsection C, D, E, F, G, H, I, J, or K | ||
of Section 12 of
this Act, the Secretary of State may by | ||
written order temporarily or
permanently prohibit or | ||
suspend the person from offering or
selling any securities, | ||
any mineral
investment contract, or any mineral deferred | ||
delivery contract in this
State, provided that any person | ||
who is the subject of an order of
permanent prohibition may | ||
petition the Secretary of State for a hearing to
present | ||
evidence of rehabilitation or change in circumstances | ||
justifying
the amendment or termination of the order of | ||
permanent prohibition.
| ||
(3) If the Secretary of State shall find that any | ||
person is engaging or
has engaged in the business of | ||
selling or offering for sale securities as a
dealer , | ||
internet portal, or salesperson or is acting or has acted | ||
as an investment adviser,
investment adviser | ||
representative, or
federal covered investment adviser,
| ||
without prior thereto and at the time thereof having | ||
complied with the
registration or notice filing | ||
requirements of this Act, the Secretary of
State may by
| ||
written order prohibit or suspend the person from engaging | ||
in the
business of selling or offering for sale securities, | ||
or acting as an investment
adviser, investment adviser | ||
representative, or federal covered investment
adviser, in | ||
this State.
| ||
(4) In addition to any other sanction or remedy |
contained in this
subsection E, the Secretary of State, | ||
after finding that any provision of
this Act has been | ||
violated, may impose a fine as provided by rule,
regulation | ||
or order not to exceed $10,000 for each
violation of this | ||
Act, may
issue an order of public censure against the | ||
violator, and may charge as
costs of investigation all | ||
reasonable expenses, including attorney's fees and
witness | ||
fees.
| ||
F. (1) The Secretary of State shall not deny, suspend or | ||
revoke the
registration of securities, suspend or revoke the | ||
registration of a
dealer, internet portal, salesperson, | ||
investment adviser, or investment adviser
representative, | ||
prohibit or suspend the
offer or sale of any securities, | ||
prohibit or suspend any person from
offering or selling any | ||
securities in this State, prohibit or
suspend a dealer or | ||
salesperson from engaging in the business of selling or
| ||
offering for sale securities, prohibit or suspend a person from | ||
acting as
an investment adviser or federal covered investment | ||
adviser, or investment
adviser representative, impose any
fine | ||
for violation of this Act, issue an
order of public censure, or | ||
enter into an agreed settlement except after an
opportunity for | ||
hearing upon not less than 10 days notice given by personal
| ||
service or registered mail or certified mail, return receipt | ||
requested, to
the person or persons concerned. Such notice | ||
shall state the date and time
and place of the hearing and | ||
shall contain a brief statement of
the proposed action of the |
Secretary of State and the grounds for
the proposed action. A | ||
failure to appear at the hearing or
otherwise respond to the | ||
allegations set forth in the notice of
hearing shall constitute | ||
an admission of any facts alleged therein and shall
constitute | ||
sufficient basis to enter an order.
| ||
(2) Anything herein contained to the contrary | ||
notwithstanding, the Secretary
of State may temporarily | ||
prohibit or suspend, for a maximum period of 90 days,
by an | ||
order effective immediately, the offer or sale or registration | ||
of
securities, the registration of a dealer, internet portal, | ||
salesperson, investment
adviser, or investment adviser | ||
representative, or
the offer or sale of securities by any | ||
person, or the business of rendering
investment advice, without | ||
the notice and prior hearing in this subsection
prescribed, if | ||
the Secretary of State shall in his or her opinion, based on
| ||
credible evidence, deem it necessary to prevent an imminent | ||
violation of this
Act or to prevent losses to investors which | ||
the Secretary of State reasonably
believes will occur as a | ||
result of a prior violation of this Act. Immediately
after | ||
taking action without such notice and hearing, the Secretary
of | ||
State shall deliver a copy of the
temporary order to the | ||
respondent named therein by personal service or
registered mail | ||
or certified mail, return receipt requested. The temporary
| ||
order shall set forth the grounds for the action and shall | ||
advise that the
respondent may request a hearing, that
the | ||
request for a hearing will not stop the effectiveness of the |
temporary
order and that respondent's failure to request a | ||
hearing within 30 days
after the date of the entry of the | ||
temporary order shall constitute an
admission of any facts | ||
alleged therein and shall constitute sufficient
basis to make | ||
the temporary order final. Any provision of this paragraph
(2) | ||
to the contrary notwithstanding, the Secretary of State may not
| ||
pursuant to the provisions of this paragraph (2) suspend the | ||
registration
of a dealer, limited Canadian dealer, | ||
salesperson, investment
adviser, or investment adviser | ||
representative based upon sub-paragraph (n)
of paragraph (l) of | ||
subsection E of Section 8 of this Act or revoke
the | ||
registration of securities or revoke the registration of any
| ||
dealer, salesperson, investment adviser representative, or | ||
investment
adviser.
| ||
(3) The Secretary of State may issue a temporary order | ||
suspending or
delaying the effectiveness of any registration of | ||
securities under
subsection A or B of Section 5, 6 or 7 of this | ||
Act subsequent to and upon
the basis of the issuance of any | ||
stop, suspension or similar order by the
Securities and | ||
Exchange Commission with respect to the securities which are
| ||
the subject of the registration under subsection A or B of | ||
Section 5, 6 or
7 of this Act, and the order shall become | ||
effective as of the date
and time of effectiveness of the | ||
Securities and Exchange Commission order and
shall be vacated | ||
automatically at such time as the order of the
Securities and | ||
Exchange Commission is no longer in effect.
|
(4) When the Secretary of State finds that an application | ||
for registration
as a dealer, internet portal, salesperson, | ||
investment adviser, or investment
adviser representative | ||
should be denied, the Secretary
of State may enter an order | ||
denying the registration. Immediately
after taking such | ||
action, the Secretary of State shall deliver a
copy of the | ||
order to the respondent named therein by personal service or
| ||
registered mail or certified mail, return receipt requested. | ||
The order shall
state the grounds for the action and that the | ||
matter will be set
for hearing upon written request filed with | ||
the Secretary of State within 30
days after the receipt of the | ||
request by the respondent. The
respondent's failure to request | ||
a hearing within 30 days after receipt of
the order shall | ||
constitute an admission of any facts alleged
therein and shall | ||
make the order final. If a hearing is held, the
Secretary of | ||
State shall affirm, vacate, or modify the order.
| ||
(5) The findings and decision of the Secretary of State | ||
upon the
conclusion of each final hearing held pursuant to this | ||
subsection shall
be set forth in a written order signed on | ||
behalf of the Secretary of
State by his or her designee and | ||
shall be filed as a public record. All
hearings shall be held | ||
before a person designated by the Secretary of State,
and | ||
appropriate records thereof shall be kept.
| ||
(6) Notwithstanding the foregoing, the Secretary of State, | ||
after
notice and opportunity for hearing, may at his or her | ||
discretion enter into
an agreed settlement, stipulation or |
consent order with a respondent in
accordance with the | ||
provisions of the Illinois Administrative
Procedure Act. The | ||
provisions of the agreed settlement, stipulation or
consent | ||
order shall have the full force and effect of an order issued | ||
by the
Secretary of State.
| ||
(7) Anything in this Act to the contrary notwithstanding, | ||
whenever
the Secretary of State finds that a person is | ||
currently expelled from, refused
membership in or association | ||
with, or limited in any material capacity by a
self-regulatory | ||
organization registered under the Federal 1934 Act or the
| ||
Federal 1974 Act because of a fraudulent or deceptive act or a | ||
practice in
violation of a rule, regulation, or standard duly | ||
promulgated by the
self-regulatory organization, the Secretary | ||
of State may, at his or her
discretion, enter a Summary Order | ||
of Prohibition, which shall prohibit the
offer
or sale of any | ||
securities, mineral investment contract, or mineral deferred
| ||
delivery contract by the person in this State. The order shall | ||
take effect
immediately upon its entry. Immediately after | ||
taking the action the Secretary
of State shall deliver a copy | ||
of the order to the named Respondent by
personal service or | ||
registered mail or certified mail, return receipt
requested. A | ||
person who is the subject of an Order of Prohibition may
| ||
petition the Secretary of State for a hearing to present | ||
evidence of
rehabilitation or change in circumstances | ||
justifying the
amendment or termination of the Order of | ||
Prohibition.
|
G. No administrative action shall be brought by the | ||
Secretary of State
for relief under this Act or upon or because | ||
of any of the matters for
which relief is granted by this Act | ||
after the earlier to occur of (i) 3
years from the date upon | ||
which the Secretary of State had notice of facts
which in the | ||
exercise of reasonable diligence would lead to actual
knowledge | ||
of the alleged violation of the Act, or (ii) 5 years from the
| ||
date on which the alleged violation occurred.
| ||
H. The action of the Secretary of State in denying, | ||
suspending, or revoking
the registration of a dealer, internet | ||
portal, limited Canadian dealer, salesperson, investment | ||
adviser, or investment adviser representative, in
prohibiting
| ||
any person from engaging in the business of offering or selling | ||
securities as a
dealer, limited Canadian dealer, or | ||
salesperson, in prohibiting or
suspending the offer or sale of
| ||
securities by any person, in prohibiting a person from acting | ||
as an investment
adviser, federal covered investment adviser, | ||
or investment adviser
representative, in denying, suspending, | ||
or
revoking the registration of securities, in
prohibiting or | ||
suspending the offer or sale or proposed offer or sale of
| ||
securities, in imposing any fine for violation of this Act, or | ||
in issuing any
order shall be subject to judicial review in the | ||
Circuit Courts
of
Cook or Sangamon Counties in this State. The
| ||
Administrative Review
Law shall apply to and
govern every | ||
action for the judicial review of final actions or decisions
of | ||
the Secretary of State under this Act.
|
I. Notwithstanding any other provisions of this Act to the | ||
contrary,
whenever it shall appear to the Secretary of State | ||
that any
person is engaged or about to engage in any acts or | ||
practices which
constitute or will constitute a violation of | ||
this Act or of any rule or
regulation prescribed under | ||
authority of this Act, the Secretary of State
may at his or her | ||
discretion, through the Attorney General take any of the
| ||
following actions:
| ||
(1) File a complaint and apply for a temporary | ||
restraining order without
notice, and upon a proper showing | ||
the court may enter a temporary
restraining order without | ||
bond, to enforce this Act.
| ||
(2) File a complaint and apply for a preliminary or | ||
permanent
injunction, and, after notice and a hearing and | ||
upon a proper showing,
the court may grant a preliminary or | ||
permanent injunction and may order the
defendant to make an | ||
offer of rescission with respect to any sales or
purchases | ||
of securities, mineral investment contracts, or mineral
| ||
deferred delivery contracts determined by the court to be | ||
unlawful under
this Act.
| ||
(3) Seek the seizure of assets when probable cause | ||
exists that the
assets
were
obtained by a defendant through | ||
conduct in violation of Section 12,
paragraph F, G, I, J, | ||
K, or L of this Act, and thereby subject to a judicial
| ||
forfeiture hearing as required under this Act.
| ||
(a) In the event that such probable cause exists |
that the subject of an
investigation who is alleged to | ||
have committed one of the relevant
violations of this | ||
Act has in his possession assets obtained as a
result | ||
of the conduct giving rise to the violation, the | ||
Secretary of
State may seek a seizure warrant in any | ||
circuit court in Illinois.
| ||
(b) In seeking a seizure warrant, the Secretary of | ||
State, or his
or her designee, shall submit to the | ||
court a sworn affidavit detailing the
probable cause | ||
evidence for the seizure, the location of the assets
to | ||
be seized, the relevant violation under Section 12 of | ||
this Act, and
a statement detailing any known owners or | ||
interest holders in the
assets.
| ||
(c) Seizure of the assets shall be made by any | ||
peace officer upon
process of the seizure warrant | ||
issued by the court. Following the
seizure of assets | ||
under this Act and pursuant to a seizure warrant,
| ||
notice of seizure, including a description of the | ||
seized assets, shall
immediately be returned to the | ||
issuing court. Seized assets shall be
maintained | ||
pending a judicial forfeiture hearing in accordance | ||
with
the instructions of the court.
| ||
(d) In the event that management of seized assets | ||
becomes necessary
to prevent the devaluation, | ||
dissipation, or otherwise to preserve the
property, | ||
the court shall have jurisdiction to appoint a |
receiver,
conservator, ancillary receiver, or | ||
ancillary conservator for that
purpose, as provided in | ||
item (2) of this subsection.
| ||
(4) Seek the forfeiture of assets obtained through | ||
conduct in violation of
Section 12, paragraph F, G, H, I, | ||
J, K, or L when authorized by law. A
forfeiture must be | ||
ordered by a circuit court or an action brought by the
| ||
Secretary of State as provided for in this Act, under a | ||
verified complaint
for forfeiture.
| ||
(a) In the event assets have been seized pursuant | ||
to this Act,
forfeiture
proceedings shall be | ||
instituted by the Attorney General within 45
days of | ||
seizure.
| ||
(b) Service of the complaint filed under the | ||
provisions of this Act
shall
be made in the manner as | ||
provided in civil actions in this State.
| ||
(c) Only an owner of or interest holder in the | ||
property may file an
answer asserting a claim against | ||
the property. For purposes of this Section,
the owner | ||
or interest holder shall be
referred to as claimant.
| ||
(d) The answer must be signed by the owner or | ||
interest holder under
penalty of perjury and must set | ||
forth:
| ||
(i) the caption of the proceedings as set forth | ||
on the notice of
pending forfeiture and the name of | ||
the claimant;
|
(ii) the address at which the claimant will | ||
accept mail;
| ||
(iii) the nature and extent of the claimant's | ||
interest in the
property;
| ||
(iv) the date, identity of the transferor, and | ||
circumstances of the
claimant's acquisition of the | ||
interest in the property;
| ||
(v) the name and address of all other persons | ||
known to have an
interest in the property;
| ||
(vi) the specific provisions of this Act | ||
relied on in asserting that
the
property is not | ||
subject to forfeiture;
| ||
(vii) all essential facts supporting each | ||
assertion; and
| ||
(viii) the precise relief sought.
| ||
(e) The answer must be filed with the court within | ||
45 days after service
of the complaint.
| ||
(f) A property interest is exempt from forfeiture | ||
under this Act if its
owner or interest holder | ||
establishes by a preponderance of
evidence that the | ||
owner or interest holder:
| ||
(i) is not legally accountable for the conduct | ||
giving rise to
the forfeiture, did not acquiesce in | ||
it, and did not know
and could not reasonably have | ||
known of the conduct or
that the conduct was likely | ||
to occur;
|
(ii) with respect to conveyances, did not hold | ||
the property
jointly or in common with a person | ||
whose conduct gave
rise to the forfeiture;
| ||
(iii) does not hold the property for the | ||
benefit of or as a
nominee for any person whose | ||
conduct gave rise to its
forfeiture and the owner | ||
or interest holder acquires it
as a bona fide | ||
purchaser for value without knowingly
taking part | ||
in the conduct giving rise to the forfeiture; or
| ||
(iv) acquired the interest after the
| ||
commencement of the conduct giving rise to its | ||
forfeiture
and the owner or interest holder | ||
acquired the interest as a
mortgagee, secured | ||
creditor, lienholder, or bona fide
purchaser for | ||
value without knowledge of the conduct
that gave | ||
rise to the forfeiture.
| ||
(g) The hearing must be held within 60 days after | ||
the answer is filed
unless continued for good cause.
| ||
(h) During the probable cause portion of the | ||
judicial in rem proceeding
wherein the Secretary of | ||
State presents its case-in-chief, the court
must | ||
receive and consider, among other things, any relevant
| ||
hearsay evidence and information. The laws of evidence | ||
relating
to civil actions shall apply to all other | ||
portions of the judicial in
rem proceeding.
| ||
(i) The Secretary of State shall show the existence |
of probable cause
for forfeiture of the property. If | ||
the Secretary of State shows
probable cause, the | ||
claimant has the burden of showing by a
preponderance | ||
of the evidence that the claimant's interest in the
| ||
property is not subject to forfeiture.
| ||
(j) If the Secretary of State does not show the | ||
existence of probable
cause or a claimant has an | ||
interest that is exempt under
subdivision I (4)(d) of | ||
this Section, the court shall order the interest in the
| ||
property returned
or conveyed to the claimant and shall | ||
order all other property
forfeited to the Secretary of | ||
State pursuant to all provisions of this Act. If
the | ||
Secretary of State does show the existence of probable
| ||
cause and the claimant does not establish by a | ||
preponderance of
the evidence that the claimant has an | ||
interest that is exempt under
subsection D herein, the | ||
court shall order all the property forfeited
to the | ||
Secretary of State pursuant to the provisions of the | ||
Section.
| ||
(k) A defendant convicted in any criminal | ||
proceeding is precluded
from later denying the | ||
essential allegations of the criminal offense
of which | ||
the defendant was convicted in any proceeding for
| ||
violations of the Act giving rise to forfeiture of | ||
property herein
regardless of the pendency of an appeal | ||
from that conviction.
However, evidence of the |
pendency of an appeal is admissible.
| ||
(l) An acquittal or dismissal in a criminal | ||
proceeding for violations of
the Act giving rise to the | ||
forfeiture of property herein shall not
preclude civil | ||
proceedings under this provision; however, for good
| ||
cause shown, on a motion by the Secretary of State, the | ||
court may
stay civil forfeiture proceedings during the | ||
criminal trial for a
related criminal indictment or | ||
information alleging violation of the
provisions of | ||
Section 12 of the Illinois Securities Law of 1953.
| ||
Property subject to forfeiture under this Section | ||
shall not be subject
to return or release by a court | ||
exercising jurisdiction over a
criminal case involving | ||
the seizure of the property unless the return
or | ||
release is consented to by the Secretary of State.
| ||
(m) All property declared forfeited under this Act | ||
vests in the State on
the commission of the conduct | ||
giving rise to forfeiture together
with the proceeds of | ||
the property after that time. Any such
property or | ||
proceeds subsequently transferred to any person remain
| ||
subject to forfeiture and thereafter shall be ordered | ||
forfeited unless
the transferee claims and establishes | ||
in a hearing under the
provisions of this Act that the | ||
transferee's interest is exempt under
the Act. Any | ||
assets forfeited to the State shall be disposed of in
| ||
following manner:
|
(i) all forfeited property and assets shall be | ||
liquidated by the
Secretary of State in accordance | ||
with all laws and
rules governing the disposition | ||
of such property;
| ||
(ii) the Secretary of State shall provide the | ||
court at the time the
property and assets are | ||
declared forfeited a verified
statement of | ||
investors subject to the conduct giving rise to the
| ||
forfeiture;
| ||
(iii) after payment of any costs of sale, | ||
receivership, storage, or
expenses for | ||
preservation of the property seized, other costs
| ||
to the State, and payment to claimants for any | ||
amount
deemed exempt from forfeiture, the proceeds | ||
from
liquidation shall be distributed pro rata to | ||
investors subject to the
conduct giving rise to the | ||
forfeiture; and
| ||
(iv) any proceeds remaining after all verified | ||
investors have
been made whole shall be | ||
distributed 25% to the
Securities Investors | ||
Education Fund, 25%
to the Securities Audit and
| ||
Enforcement Fund, 25% to the Attorney General or | ||
any
State's Attorney bringing criminal charges for | ||
the conduct
giving rise to the forfeiture, and 25% | ||
to other law
enforcement agencies participating in | ||
the investigation of
the criminal charges for the |
conduct giving rise to the
forfeiture. In the event | ||
that no other law enforcement
agencies are | ||
involved in the investigation of the conduct
| ||
giving rise to the forfeiture, then the portion to | ||
other law
enforcement agencies shall be | ||
distributed to the
Securities Investors Education | ||
Fund.
| ||
(n) The Secretary of State shall notify by | ||
certified mail, return
receipt
requested, all known | ||
investors in the matter giving rise to the forfeiture
| ||
of the forfeiture proceeding and sale of assets | ||
forfeited arising from the
violations of this Act, and | ||
shall further publish notice in a paper of
general | ||
circulation in the district in which the violations | ||
were prosecuted.
The notice to investors shall | ||
identify the name, address, and other
identifying | ||
information about any defendant prosecuted for | ||
violations
of this Act that resulted in forfeiture and | ||
sale of property, the offense
for which the defendant | ||
was convicted, and that the court has ordered
| ||
forfeiture and sale of property for claims of investors | ||
who incurred losses
or damages as a result of the | ||
violations. Investors may then file a claim
in a form | ||
prescribed by the Secretary of State in order to share | ||
in
disbursement of the proceeds from sale of the | ||
forfeited property.
Investor claims must be filed with |
the Secretary of State within 30 days
after receipt of | ||
the certified mail return receipt, or within 30 days | ||
after the
last
date of publication of the general | ||
notice in a paper of general circulation
in the | ||
district in which the violations were prosecuted, | ||
whichever occurs
last.
| ||
(o) A civil action under this subsection must be | ||
commenced within 5
years
after
the last conduct giving | ||
rise to the forfeiture became known or should
have | ||
become known or 5 years after the forfeitable property | ||
is
discovered, whichever is later, excluding time | ||
during which either the
property or claimant is out of | ||
this State or in confinement or during which
criminal | ||
proceedings relating to the same conduct are in | ||
progress.
| ||
(p) If property is seized for evidence and for | ||
forfeiture, the time
periods
for
instituting judicial | ||
forfeiture proceedings shall not begin until the
| ||
property is no longer necessary for evidence.
| ||
(q) Notwithstanding other provisions of this Act, | ||
the Secretary of State
and
a
claimant of forfeitable | ||
property may enter into an agreed-upon settlement
| ||
concerning the forfeitable property in such an amount | ||
and upon such
terms as are set out in writing in a | ||
settlement agreement.
| ||
(r) Nothing in this Act shall apply to property |
that constitutes
reasonable
bona
fide attorney's fees | ||
paid to an attorney for services rendered or to be
| ||
rendered in the forfeiture proceeding or criminal | ||
proceeding relating
directly thereto when the property | ||
was paid before its seizure and before
the issuance of | ||
any seizure warrant or court order prohibiting | ||
transfer of
the property and when the attorney, at the | ||
time he or she received the
property, did not know that | ||
it was property subject to forfeiture under
this Act.
| ||
The court shall further have jurisdiction and authority, in | ||
addition to the
penalties and other remedies in this Act | ||
provided, to enter an order for
the appointment of the court or | ||
a person as a receiver, conservator,
ancillary receiver or | ||
ancillary conservator for the defendant or the
defendant's | ||
assets located in this State, or to require restitution,
| ||
damages or disgorgement of profits on behalf of the person or | ||
persons
injured by the act or practice constituting the subject | ||
matter of the
action, and may assess costs against the | ||
defendant for the use of the
State; provided, however, that the | ||
civil remedies of rescission and
appointment of a receiver, | ||
conservator, ancillary receiver
or ancillary conservator shall | ||
not be available against any person by
reason of the failure to | ||
file with the Secretary of State, or on account of
the contents | ||
of, any report of sale provided for in subsection G or P of
| ||
Section 4, paragraph (2) of subsection D of Sections 5 and 6, | ||
or paragraph
(2) of subsection F of Section 7 of this Act. |
Appeals may be
taken as in other civil cases.
| ||
J. In no case shall the Secretary of State, or any of his | ||
or her
employees or agents, in the administration of this Act, | ||
incur any official or
personal liability by instituting an | ||
injunction or other proceeding or
by denying, suspending or | ||
revoking the registration of a dealer or
salesperson, or by | ||
denying, suspending or revoking the registration of
securities | ||
or prohibiting the offer or sale of securities, or by | ||
suspending or
prohibiting any person from acting as a dealer, | ||
limited Canadian dealer,
salesperson, investment adviser, or | ||
investment adviser
representative or from offering or selling | ||
securities.
| ||
K. No provision of this Act shall be construed to require | ||
or to
authorize the Secretary of State to require any | ||
investment adviser
or federal covered investment adviser | ||
engaged in rendering investment
supervisory services to | ||
disclose the
identity, investments, or affairs of any client of | ||
the investment
adviser or federal covered investment adviser, | ||
except insofar as the
disclosure may be necessary or
| ||
appropriate in a particular proceeding or investigation having | ||
as its
object the enforcement of this Act.
| ||
L. Whenever, after an examination, investigation or
| ||
hearing, the Secretary of State deems it of public interest or | ||
advantage,
he or she may certify a record to the State's | ||
Attorney of the county in
which the act complained of, examined | ||
or investigated occurred. The
State's Attorney of that county |
within 90 days after receipt of the record
shall file a written | ||
statement at the Office of the Secretary of State,
which | ||
statement shall set forth the action taken upon the record, or | ||
if no
action has been taken upon the record that fact, together | ||
with the reasons
therefor, shall be stated.
| ||
M. The Secretary of State may initiate, take, pursue, or | ||
prosecute any
action authorized or permitted under Section 6d | ||
of the Federal 1974 Act.
| ||
N. (1) Notwithstanding any provision of this Act to the | ||
contrary, to
encourage uniform interpretation, administration, | ||
and enforcement of the
provisions of this Act, the Secretary of | ||
State may cooperate with the
securities agencies or | ||
administrators of one or more states, Canadian provinces
or | ||
territories, or another country, the Securities and Exchange | ||
Commission, the
Commodity Futures Trading Commission, the | ||
Securities Investor Protection
Corporation, any | ||
self-regulatory organization, and any governmental law
| ||
enforcement or regulatory agency.
| ||
(2) The cooperation authorized by paragraph (1) of this | ||
subsection includes,
but is not limited to, the following:
| ||
(a) establishing or participating in a central | ||
depository or depositories
for registration under this Act | ||
and for documents or records required under
this Act;
| ||
(b) making a joint audit, inspection, examination, or | ||
investigation;
| ||
(c) holding a joint administrative hearing;
|
(d) filing and prosecuting a joint civil or criminal | ||
proceeding;
| ||
(e) sharing and exchanging personnel;
| ||
(f) sharing and exchanging information and documents; | ||
or
| ||
(g) issuing any joint statement or policy.
| ||
(Source: P.A. 92-308, eff. 1-1-02; 93-580, eff. 8-21-03.)
| ||
(815 ILCS 5/11a) (from Ch. 121 1/2, par. 137.11a)
| ||
Sec. 11a. Fees.
| ||
(1) The Secretary of State shall by rule or
regulation | ||
impose and shall collect reasonable fees necessary for
the | ||
administration of this Act including, but not limited to, fees | ||
for
the following purposes:
| ||
(a) filing an application pursuant to paragraph (2) of | ||
subsection F of
Section 4 of this Act;
| ||
(b) examining an application and report pursuant to | ||
paragraph (2) of
subsection F of Section 4 of this Act;
| ||
(c) filing a report pursuant to subsection G of Section | ||
4 of this Act,
determined
in accordance with paragraph (4) | ||
of subsection G of Section 4 of this Act;
| ||
(d) examining an offering sheet pursuant to subsection | ||
P of Section 4 of
this Act;
| ||
(e) filing a report pursuant to subsection P of Section | ||
4, determined
in accordance with subsection P of Section 4 | ||
of this Act;
|
(f) examining an application to register securities | ||
under
subsection B of Section 5 of this Act;
| ||
(g) examining an amended or supplemental prospectus | ||
filed
pursuant to the undertaking required by | ||
sub-paragraph (i) of paragraph (2)
of subsection B of | ||
Section 5 of this Act;
| ||
(h) registering or renewing registration of securities | ||
under Section 5,
determined in accordance with subsection C | ||
of Section 5 of this Act;
| ||
(i) registering securities in excess of the amount | ||
initially registered,
determined in accordance with | ||
paragraph (2) of subsection C of Section 5 of
this Act;
| ||
(j) failure to file timely an application for renewal | ||
under subsection E
of Section 5 of this Act;
| ||
(k) failure to file timely any document or information | ||
required
under Section 5 of this Act;
| ||
(l) examining an application to register face amount
| ||
certificate contracts under subsection B of Section 6 of | ||
this Act;
| ||
(m) examining an amended or supplemental prospectus | ||
filed
pursuant to the undertaking required by | ||
sub-paragraph (f) of paragraph (2)
of subsection B of | ||
Section 6 of this Act;
| ||
(n) registering or renewing registration
of face | ||
amount certificate contracts under Section 6 of this Act;
| ||
(o) amending a registration of face amount certificate
|
contracts pursuant to subsection E of Section 6 of this Act | ||
to add any
additional
series, type or class of contract;
| ||
(p) failure to file timely an application for renewal | ||
under subsection
F of Section 6 of this Act;
| ||
(q) adding to or withdrawing from deposits with respect | ||
to
face amount certificate contracts pursuant to | ||
subsection H of Section 6, a
transaction charge payable at | ||
the times and in the manner specified in
subsection H of | ||
Section 6 (which transaction charge shall be in addition to
| ||
the annual fee called for by subsection H of Section 6 of | ||
this Act);
| ||
(r) failure to file timely any document or information | ||
required
under Section 6 of this Act;
| ||
(s) examining an application to register investment | ||
fund
shares under subsection B of Section 7 of this Act;
| ||
(t) examining an amended or supplemental prospectus | ||
filed
pursuant to the undertaking required by | ||
sub-paragraph (f) of paragraph (2)
of subsection B of | ||
Section 7 of this Act;
| ||
(u) registering or renewing registration of investment | ||
fund shares
under Section 7 of this Act;
| ||
(v) amending a registration of investment fund shares
| ||
pursuant to subsection D of Section 7 of this Act to | ||
register an additional
class or
classes of investment fund | ||
shares;
| ||
(w) failure to file timely an application for renewal |
under paragraph
(l) of subsection G of Section 7 of this | ||
Act;
| ||
(x) examining an application for renewal of | ||
registration of
investment fund shares under paragraph (2) | ||
of subsection G of Section 7 of
this Act;
| ||
(y) failure to file timely any document or information | ||
required under
Section 7 of this Act;
| ||
(z) filing an application for registration or | ||
re-registration of a
dealer or limited Canadian dealer | ||
under Section 8 of this Act for each
office in this State;
| ||
(aa) in connection with an application for the | ||
registration or
re-registration of a salesperson under | ||
Section 8 of or this Act, for the
following purposes:
| ||
(i) filing an application;
| ||
(ii) a Securities Audit and Enforcement Fund fee; | ||
and
| ||
(iii) a notification filing of federal covered | ||
investment
advisers;
| ||
(bb) in connection with an application for the | ||
registration or
re-registration of an investment adviser | ||
under Section 8 of this Act;
| ||
(cc) failure to file timely any document or information | ||
required
under Section 8 of this Act;
| ||
(dd) filing a consent to service of process under | ||
Section 10 of this
Act;
| ||
(ee) issuing a certificate pursuant to subsection B of |
Section 15 of
this Act;
| ||
(ff) issuing a certified copy pursuant to subsection C | ||
of Section 15
of
this Act;
| ||
(gg) issuing a non-binding statement pursuant to | ||
Section 15a of this
Act;
| ||
(hh) filings by Notification under Section 2a;
| ||
(ii) notification filing of federal Regulation D, | ||
Section 506 offering
under the
Federal 1933 Act;
| ||
(jj) notification filing of securities and closed-end | ||
investment company
securities;
| ||
(kk) notification filing of face amount certificate | ||
contracts;
| ||
(ll) notification filing of open-end investment | ||
company securities;
| ||
(mm) filing a report pursuant to subsection D of | ||
Section 4 of this Act;
| ||
(nn) in connection with the filing of an application | ||
for registration or
re-registration of an investment | ||
adviser representative under subsection D of
Section 8 of | ||
this Act ; .
| ||
(oo) filing a notice pursuant to paragraph (6) of | ||
subsection T
of Section 4 of this Act; and | ||
(pp) applying for registration, or renewing | ||
registration, as a
registered Internet portal pursuant to | ||
Section 8d of this Act. | ||
(2) The Secretary of State may, by rule or regulation, |
raise or lower
any fee imposed by, and which he or she is | ||
authorized by law to collect
under, this Act.
| ||
(Source: P.A. 90-70, eff. 7-8-97; 91-357, eff. 7-29-99; revised | ||
12-11-14.)
| ||
(815 ILCS 5/12) (from Ch. 121 1/2, par. 137.12)
| ||
Sec. 12. Violation. It shall be a violation of the | ||
provisions of
this Act for any person:
| ||
A. To offer or sell any security except in accordance with | ||
the provisions
of this Act.
| ||
B. To deliver to a purchaser any security required to be | ||
registered
under Section 5, Section 6 or Section 7 hereof | ||
unless accompanied or preceded
by a prospectus that meets the | ||
requirements of the pertinent subsection of
Section 5 or of | ||
Section 6 or of Section 7.
| ||
C. To act as a dealer, internet portal, salesperson, | ||
investment adviser, or
investment adviser representative, | ||
unless
registered as such, where such registration is required, | ||
under the
provisions of this Act.
| ||
D. To fail to file with the Secretary of State any | ||
application,
report or document required to be filed under the | ||
provisions of this Act
or any rule or regulation made by the | ||
Secretary of State pursuant to
this Act or to fail to comply | ||
with the terms of any order of the
Secretary of State issued | ||
pursuant to Section 11 hereof.
| ||
E. To make, or cause to be made, (1) in any application, |
report or
document filed under this Act or any rule or | ||
regulation made by the
Secretary of State pursuant to this Act, | ||
any statement which was false
or misleading with respect to any | ||
material fact or (2) any statement to
the effect that a | ||
security (other than a security issued by the State of
| ||
Illinois) has been in any way endorsed or approved by the | ||
Secretary of
State or the State of Illinois.
| ||
F. To engage in any transaction, practice or course of | ||
business in
connection with the sale or purchase of securities | ||
which works or tends
to work a fraud or deceit upon the | ||
purchaser or seller thereof.
| ||
G. To obtain money or property through the sale of | ||
securities by
means of any untrue statement of a material fact | ||
or any omission to
state a material fact necessary in order to | ||
make the statements made, in
the light of the circumstances | ||
under which they were made, not
misleading.
| ||
H. To sign or circulate any statement, prospectus, or other | ||
paper or
document required by any provision of this Act or | ||
pertaining to any
security knowing or having
reasonable grounds | ||
to know any material representation therein contained
to be | ||
false or untrue.
| ||
I. To employ any device, scheme or artifice to defraud in | ||
connection
with the sale or purchase of any security, directly | ||
or indirectly.
| ||
J. When acting as an investment adviser, investment adviser
| ||
representative, or federal covered investment adviser, by any |
means or
instrumentality, directly or indirectly:
| ||
(1) To employ any device, scheme or artifice to defraud | ||
any client
or prospective client;
| ||
(2) To engage in any transaction, practice, or course | ||
of business
which operates as a fraud or deceit upon any | ||
client or prospective
client; or
| ||
(3) To engage in any act, practice, or course of | ||
business which is
fraudulent, deceptive or manipulative. | ||
The Secretary of State shall for
the purposes of this | ||
paragraph (3), by rules and regulations, define and
| ||
prescribe means reasonably designed to prevent such acts, | ||
practices,
and courses of business as are fraudulent, | ||
deceptive, or manipulative.
| ||
K. When offering or selling any mineral investment contract | ||
or mineral
deferred delivery contract:
| ||
(1) To employ any device, scheme, or artifice to | ||
defraud any customer,
prospective customer, or offeree;
| ||
(2) To engage in any transaction, practice, or course | ||
of business that
operates as a fraud or deceit upon any | ||
customer, prospective customer, or
offeree; or
| ||
(3) To engage in any act, practice, or course of | ||
business that is
fraudulent, deceptive, or manipulative. | ||
The Secretary of State shall for
the purposes of this | ||
paragraph (3), by rules and regulations, define and
| ||
prescribe means reasonably designed to prevent acts, | ||
practices, and
courses of business as are fraudulent, |
deceptive, or manipulative.
| ||
L. To knowingly influence, coerce, manipulate, or mislead | ||
any person
engaged
in
the
preparation or audit of financial | ||
statements or appraisals to be used in the
offer or
sale of | ||
securities for the purpose of rendering such financial | ||
statements or
appraisals materially misleading.
| ||
(Source: P.A. 93-580, eff. 8-21-03.)
| ||
(815 ILCS 5/13) (from Ch. 121 1/2, par. 137.13)
| ||
Sec. 13. Private and other civil remedies; securities.
| ||
A. Every sale of a security made in
violation of the | ||
provisions of this Act shall be voidable at the
election of the | ||
purchaser exercised as provided in subsection B of this
| ||
Section; and the issuer, controlling person, underwriter,
| ||
dealer or other person by or on behalf of whom said sale was | ||
made, and
each underwriter, dealer , internet portal, or | ||
salesperson who shall have participated or
aided in any way in | ||
making the sale, and in case the
issuer, controlling person, | ||
underwriter , or dealer , or internet portal is a corporation or
| ||
unincorporated association or organization, each of its | ||
officers and
directors (or persons performing similar | ||
functions) who shall have
participated or aided in making the | ||
sale, shall be jointly and
severally liable to the purchaser as | ||
follows:
| ||
(1) for the full amount paid,
together with interest | ||
from the date of payment for the securities sold
at the |
rate of the interest or dividend stipulated in the | ||
securities
sold (or if no rate is stipulated, then at the | ||
rate of 10%
per annum) less any income or other amounts | ||
received by the
purchaser on the securities, upon offer to | ||
tender to the seller or
tender into court of
the securities | ||
sold or, where the securities were not received, of any
| ||
contract made in respect of the sale; or
| ||
(2) if the purchaser no longer
owns the securities, for | ||
the amounts set forth in clause (1) of this
subsection A | ||
less any amounts received by the purchaser for or on | ||
account
of the disposition of the securities.
| ||
If the purchaser shall
prevail in any action brought to | ||
enforce any of the remedies provided in
this subsection, the | ||
court shall assess costs together with the
reasonable fees and | ||
expenses of the purchaser's attorney against the defendant.
Any | ||
provision of this subsection A to the contrary
notwithstanding, | ||
the civil remedies provided in this subsection A shall not
be | ||
available against any person by reason of the failure to file | ||
with the
Secretary of State, or on account of the content of, | ||
any report of sale
provided for in subsection G or P of Section | ||
4, paragraph (2) of
subsection D of Sections 5 and 6, or | ||
paragraph (2) of subsection F of
Section 7 of this Act.
| ||
B. Notice of any election provided for in subsection A of | ||
this
Section shall be given by the purchaser within 6
months | ||
after the purchaser shall have knowledge that the sale of the
| ||
securities to him or her is
voidable, to each person from whom |
recovery will be sought, by
registered mail or certified mail, | ||
return receipt requested,
addressed to the person to be | ||
notified at his or her last
known address with proper postage | ||
affixed, or by personal service.
| ||
C. No purchaser shall have any right or remedy under this | ||
Section who shall
fail, within 15 days from the date of receipt | ||
thereof, to accept an offer to
repurchase the securities | ||
purchased by him or her for a price equal to the full
amount | ||
paid therefor plus interest thereon and less any income thereon | ||
as set
forth in subsection A of this Section. Every offer of | ||
repurchase provided for
in this subsection shall be in writing, | ||
shall be delivered to the purchaser or
sent by registered mail | ||
or certified mail, return receipt requested, addressed
to the | ||
purchaser at his or her last known address, and shall offer to
| ||
repurchase the securities sold for a price equal to the full | ||
amount paid
therefor plus interest thereon and less any income | ||
thereon as set forth in
subsection A of this Section. Such | ||
offer shall continue in force for 15 days
from the date on | ||
which it was received by the purchaser, shall advise the
| ||
purchaser of his or her rights and the period of time limited | ||
for
acceptance thereof, and shall contain such further | ||
information, if
any, as the Secretary of State may prescribe. | ||
Any agreement not to accept or
refusing or waiving any such | ||
offer made during or prior to said 15
days shall be void.
| ||
D. No action shall be brought for relief under this Section
| ||
or upon or because of any of the matters for which relief is |
granted by
this Section after 3 years from the date of sale; | ||
provided, that if the
party bringing the action neither knew | ||
nor in the exercise of reasonable
diligence should have known | ||
of any alleged violation of subsection E, F, G,
H, I or J of | ||
Section 12 of this Act which is the basis for the action, the 3
| ||
year period provided herein shall begin to run upon the earlier | ||
of:
| ||
(1) the date upon which the party bringing the
action | ||
has actual knowledge of the alleged violation of this Act; | ||
or
| ||
(2) the date upon which the party bringing the action | ||
has
notice of facts
which in the exercise of reasonable | ||
diligence would lead to actual
knowledge of the alleged | ||
violation of this Act.
| ||
E. The term purchaser as used in this Section shall include | ||
the
personal representative or representatives of the | ||
purchaser.
| ||
F. Anything in this Act to the contrary notwithstanding and | ||
in addition
to all other
remedies, the Secretary of State | ||
through
the Office of the Attorney General may bring an action | ||
in any circuit
court of the State of Illinois in the name and | ||
on behalf of the State of
Illinois against any person or | ||
persons participating in or about to
participate in a violation | ||
of this Act to enjoin those persons who are
continuing or doing | ||
any act in violation of this Act or to enforce
compliance with | ||
this Act. Upon a proper showing the court may grant a
permanent |
or preliminary injunction or temporary restraining order
| ||
without bond, and may order the defendant to make an offer
of | ||
rescission of any sales or purchases of securities determined | ||
by the
court to be unlawful under this Act. The court shall | ||
further have
jurisdiction and authority, in addition to the | ||
other penalties and remedies
in this Act provided, to act or | ||
appoint another person as a receiver,
conservator, ancillary | ||
receiver or ancillary conservator for the defendant
or the | ||
defendant's assets located in this State and may assess costs
| ||
against the defendant for the use of the State.
| ||
G. (1) Whenever any person has engaged or is about to | ||
engage in any
act or practice constituting a violation of this | ||
Act, any party in
interest may bring an action in the circuit | ||
court of the county in which
the party in interest resides, or | ||
where the person has his, her or its
principal office or | ||
registered office or where any part of the transaction
has or | ||
will take place, to enjoin that person from continuing or doing | ||
any
act in violation of or to enforce compliance with this Act. | ||
Upon a proper
showing, the court shall grant a permanent or | ||
preliminary injunction or
temporary restraining order or | ||
rescission of any sales or purchases of
securities determined | ||
to be unlawful under this Act, and may assess costs
of the | ||
proceedings against the defendant.
| ||
(2) A copy of the complaint shall be served upon the
| ||
Secretary of State within one business day of filing in
the | ||
form and manner prescribed by the Secretary of State by rule or
|
regulation; provided, that the failure to comply with this | ||
provision shall
not invalidate the action which is the subject | ||
of the complaint.
| ||
H. Any provision of this Section 13 to the contrary | ||
notwithstanding,
neither the civil remedies provided in | ||
subsection A of this Section 13 nor the
remedies of rescission | ||
and appointment of a receiver, conservator,
ancillary receiver | ||
or ancillary conservator provided in subsection I of
Section 11 | ||
of this Act and in subsections F and G
of this Section 13 of | ||
this Act nor the remedies of restitution, damages
or | ||
disgorgement of profits provided in subsection I of Section 11 | ||
of this
Act shall be available against any person
by reason of | ||
the failure to file with the Secretary of State, or on account
| ||
of the contents of, any notice filing under Section 2a of this | ||
Act or
subsection C-5 of Section 8 of this Act or any report of | ||
sale provided for in
subsection G or P of
Section 4, paragraph | ||
(2) of subsection D of Sections 5 and 6, or paragraph
(2) of | ||
subsection F of Section 7 of this Act.
| ||
(Source: P.A. 98-174, eff. 8-5-13.)
| ||
(815 ILCS 5/18.1)
| ||
Sec. 18.1. Additional fees. In addition to any other fee | ||
that the
Secretary of State may impose and collect pursuant to | ||
the authority contained
in Sections 4, 8, and 11a of this Act, | ||
beginning on
July 1, 2003 the Secretary of State shall also | ||
collect the following additional
fees:
| ||
|
| |||||||||||||||||||||||||||||||
Investment fund shares notification filing and annual | |||||||||||||||||||||||||||||||
notification filing:
$800 plus $80 for each series, class, or | |||||||||||||||||||||||||||||||
portfolio.
| |||||||||||||||||||||||||||||||
All fees collected by the Secretary of State pursuant to | |||||||||||||||||||||||||||||||
this amendatory Act
of the 93rd General Assembly shall be | |||||||||||||||||||||||||||||||
deposited into the General Revenue Fund
in the State treasury.
| |||||||||||||||||||||||||||||||
(Source: P.A. 93-32, eff. 7-1-03 .)
|