Illinois General Assembly - Full Text of HB2969
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Full Text of HB2969  98th General Assembly

HB2969enr 98TH GENERAL ASSEMBLY

  
  
  

 


 
HB2969 EnrolledLRB098 10745 JLS 41091 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Securities Law of 1953 is amended
5by changing Section 13 as follows:
 
6    (815 ILCS 5/13)  (from Ch. 121 1/2, par. 137.13)
7    Sec. 13. Private and other civil remedies; securities.
8    A. Every sale of a security made in violation of the
9provisions of this Act shall be voidable at the election of the
10purchaser exercised as provided in subsection B of this
11Section; and the issuer, controlling person, underwriter,
12dealer or other person by or on behalf of whom said sale was
13made, and each underwriter, dealer or salesperson who shall
14have participated or aided in any way in making the sale, and
15in case the issuer, controlling person, underwriter or dealer
16is a corporation or unincorporated association or
17organization, each of its officers and directors (or persons
18performing similar functions) who shall have participated or
19aided in making the sale, shall be jointly and severally liable
20to the purchaser as follows:
21        (1) for the full amount paid, together with interest
22    from the date of payment for the securities sold at the
23    rate of the interest or dividend stipulated in the

 

 

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1    securities sold (or if no rate is stipulated, then at the
2    rate of 10% per annum) less any income or other amounts
3    received by the purchaser on the securities, upon offer to
4    tender to the seller or tender into court of the securities
5    sold or, where the securities were not received, of any
6    contract made in respect of the sale; or
7        (2) if the purchaser no longer owns the securities, for
8    the amounts set forth in clause (1) of this subsection A
9    less any amounts received by the purchaser for or on
10    account of the disposition of the securities.
11    If the purchaser shall prevail in any action brought to
12enforce any of the remedies provided in this subsection, the
13court shall assess costs together with the reasonable fees and
14expenses of the purchaser's attorney against the defendant. Any
15provision of this subsection A to the contrary notwithstanding,
16the civil remedies provided in this subsection A shall not be
17available against any person by reason of the failure to file
18with the Secretary of State, or on account of the content of,
19any report of sale provided for in subsection G or P of Section
204, paragraph (2) of subsection D of Sections 5 and 6, or
21paragraph (2) of subsection F of Section 7 of this Act.
22    B. Notice of any election provided for in subsection A of
23this Section shall be given by the purchaser within 6 months
24after the purchaser shall have knowledge that the sale of the
25securities to him or her is voidable, to each person from whom
26recovery will be sought, by registered mail or certified mail,

 

 

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1return receipt requested, addressed to the person to be
2notified at his or her last known address with proper postage
3affixed, or by personal service.
4    C. No purchaser shall have any right or remedy under this
5Section who shall fail, within 15 days from the date of receipt
6thereof, to accept an offer to repurchase the securities
7purchased by him or her for a price equal to the full amount
8paid therefor plus interest thereon and less any income thereon
9as set forth in subsection A of this Section. Every offer of
10repurchase provided for in this subsection shall be in writing,
11shall be delivered to the purchaser or sent by registered mail
12or certified mail, return receipt requested, addressed to the
13purchaser at his or her last known address, and shall offer to
14repurchase the securities sold for a price equal to the full
15amount paid therefor plus interest thereon and less any income
16thereon as set forth in subsection A of this Section. Such
17offer shall continue in force for 15 days from the date on
18which it was received by the purchaser, shall advise the
19purchaser of his or her rights and the period of time limited
20for acceptance thereof, and shall contain such further
21information, if any, as the Secretary of State may prescribe.
22Any agreement not to accept or refusing or waiving any such
23offer made during or prior to said 15 days shall be void.
24    D. No action shall be brought for relief under this Section
25or upon or because of any of the matters for which relief is
26granted by this Section after 3 years from the date of sale;

 

 

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1provided, that if the party bringing the action neither knew
2nor in the exercise of reasonable diligence should have known
3of any alleged violation of subsection E, F, G, H, I or J of
4Section 12 of this Act which is the basis for the action, the 3
5year period provided herein shall begin to run upon the earlier
6of:
7        (1) the date upon which the party bringing the action
8    has actual knowledge of the alleged violation of this Act;
9    or
10        (2) the date upon which the party bringing the action
11    has notice of facts which in the exercise of reasonable
12    diligence would lead to actual knowledge of the alleged
13    violation of this Act; but in no event shall the period of
14    limitation so extended be more than 2 years beyond the
15    expiration of the 3 year period otherwise applicable.
16    E. The term purchaser as used in this Section shall include
17the personal representative or representatives of the
18purchaser.
19    F. Anything in this Act to the contrary notwithstanding and
20in addition to all other remedies, the Secretary of State
21through the Office of the Attorney General may bring an action
22in any circuit court of the State of Illinois in the name and
23on behalf of the State of Illinois against any person or
24persons participating in or about to participate in a violation
25of this Act to enjoin those persons who are continuing or doing
26any act in violation of this Act or to enforce compliance with

 

 

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1this Act. Upon a proper showing the court may grant a permanent
2or preliminary injunction or temporary restraining order
3without bond, and may order the defendant to make an offer of
4rescission of any sales or purchases of securities determined
5by the court to be unlawful under this Act. The court shall
6further have jurisdiction and authority, in addition to the
7other penalties and remedies in this Act provided, to act or
8appoint another person as a receiver, conservator, ancillary
9receiver or ancillary conservator for the defendant or the
10defendant's assets located in this State and may assess costs
11against the defendant for the use of the State.
12    G. (1) Whenever any person has engaged or is about to
13engage in any act or practice constituting a violation of this
14Act, any party in interest may bring an action in the circuit
15court of the county in which the party in interest resides, or
16where the person has his, her or its principal office or
17registered office or where any part of the transaction has or
18will take place, to enjoin that person from continuing or doing
19any act in violation of or to enforce compliance with this Act.
20Upon a proper showing, the court shall grant a permanent or
21preliminary injunction or temporary restraining order or
22rescission of any sales or purchases of securities determined
23to be unlawful under this Act, and may assess costs of the
24proceedings against the defendant.
25    (2) A copy of the complaint shall be served upon the
26Secretary of State within one business day of filing in the

 

 

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1form and manner prescribed by the Secretary of State by rule or
2regulation; provided, that the failure to comply with this
3provision shall not invalidate the action which is the subject
4of the complaint.
5    H. Any provision of this Section 13 to the contrary
6notwithstanding, neither the civil remedies provided in
7subsection A of this Section 13 nor the remedies of rescission
8and appointment of a receiver, conservator, ancillary receiver
9or ancillary conservator provided in subsection I of Section 11
10of this Act and in subsections F and G of this Section 13 of
11this Act nor the remedies of restitution, damages or
12disgorgement of profits provided in subsection I of Section 11
13of this Act shall be available against any person by reason of
14the failure to file with the Secretary of State, or on account
15of the contents of, any notice filing under Section 2a of this
16Act or subsection C-5 of Section 8 of this Act or any report of
17sale provided for in subsection G or P of Section 4, paragraph
18(2) of subsection D of Sections 5 and 6, or paragraph (2) of
19subsection F of Section 7 of this Act.
20(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96; 90-70,
21eff. 7-8-97.)
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.