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90_SB1694eng
815 ILCS 5/2.9 from Ch. 121 1/2, par. 137.2-9
815 ILCS 5/2.10a new
815 ILCS 5/2.12b from Ch. 121 1/2, par. 137.2-12b
815 ILCS 5/2.30
815 ILCS 5/8b new
815 ILCS 5/14 from Ch. 121 1/2, par. 137.14
Amends the Illinois Securities Law of 1953. Provides
that, with respect to a federal covered investment adviser,
"investment adviser representative" means any person who is
an investment adviser representative with a place of business
in this State as such terms are defined pursuant to the
federal Investment Advisers Act of 1940. Prohibits
unsolicited telephone calls to offer or sell securities
unless the caller identifies himself or herself and the
purpose of the call and unless the call is made within
certain time periods. Makes a violation of certain
provisions of the Law by use of a plan, program, or campaign
that is conducted using one or more telephones for the
purpose of inducing the purchase or sale of securities a
Class 2 felony. Makes inducement, in the course of violating
certain provisions of the Law, of a person 60 years of age or
older to purchase or sell securities a Class 2 felony.
Effective immediately.
LRB9011287SMdv
SB1694 Engrossed LRB9011287SMdv
1 AN ACT to amend the Illinois Securities Law of 1953 by
2 changing Sections 2.9, 2.12b, 2.30, and 14 and adding
3 Sections 2.10a and 8b.
4 Be it enacted by the People of the State of Illinois,
5 represented in the General Assembly:
6 Section 5. The Illinois Securities Law of 1953 is
7 amended by changing Sections 2.9, 2.12b, 2.30, and 14 and
8 adding Sections 2.10a and 8b as follows:
9 (815 ILCS 5/2.9) (from Ch. 121 1/2, par. 137.2-9)
10 Sec. 2.9. "Salesperson" means an individual, other than
11 an issuer or a dealer, employed or appointed or authorized by
12 a dealer, issuer or controlling person to offer, purchase or
13 sell securities in this State. The partners or officers of a
14 dealer or issuer shall not be deemed to be salespersons
15 within the meaning of this definition if they are not or have
16 not been regularly engaged in securities offering, purchasing
17 or selling activities other than transactions for their own
18 respective accounts. No individual shall be deemed to be a
19 salesperson solely by reason of effecting transactions in a
20 covered security to qualified purchasers as described in
21 Section 18(b)(3) of the Federal 1933 Act, effecting
22 transactions in a covered security as described in Section
23 18(b)(4)(D) of the Federal 1933 Act, or engaging in offers or
24 effecting sales of securities to employees of the issuer of
25 such securities or to employees of the parent or any
26 wholly-owned subsidiary of such issuer, provided that such
27 individual is an employee of such issuer, parent or
28 subsidiary who has not been employed primarily to make such
29 offers or sales and who receives no special compensation,
30 directly or indirectly, for or on account of any such offer
31 or sale. "Salesperson" also means a limited Canadian
SB1694 Engrossed -2- LRB9011287SMdv
1 salesperson. "Salesperson" also means an individual who, in
2 this State, communicates with members of the public to
3 identify prospective customers for the purpose of soliciting
4 the purchase or sale of securities or related services.
5 (Source: P.A. 90-70, eff. 7-8-97.)
6 (815 ILCS 5/2.10a new)
7 Sec. 2.10a. Telephone solicitor. "Telephone solicitor"
8 means a natural person who makes or causes to be made an
9 unsolicited telephone call with the intent to offer or sell a
10 security.
11 (815 ILCS 5/2.12b) (from Ch. 121 1/2, par. 137.2-12b)
12 Sec. 2.12b. Investment adviser representative.
13 "Investment adviser representative" means, with respect to an
14 investment adviser who is required to register under this
15 Act, any partner, officer, director of (or a person occupying
16 a similar status or performing similar functions), or other
17 natural person employed by or associated with an investment
18 adviser, except clerical or ministerial personnel, who in
19 this State:
20 (1) makes any recommendations or otherwise renders
21 advice regarding securities;
22 (2) manages accounts or portfolios of clients;
23 (3) determines what recommendation or advice regarding
24 securities should be given; or
25 (4) supervises any employee who performs any of the
26 foregoing.
27 With respect to a federal covered investment adviser,
28 "investment adviser representative" means any person who is
29 an investment adviser representative with a place of business
30 in this State as such terms are defined by the Securities and
31 Exchange Commission under Section 203A of the Federal 1940
32 Investment Advisers Act. "Investment adviser representative"
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1 does not mean a federal covered investment adviser, a
2 supervised person of a federal covered investment adviser, or
3 a person defined by rule of the Securities and Exchange
4 Commission under Section 203A of the Federal Investment
5 Advisers Act as an investment adviser representative.
6 (Source: P.A. 90-70, eff. 7-8-97.)
7 (815 ILCS 5/2.30)
8 Sec. 2.30. Federal covered investment adviser. "Federal
9 covered investment adviser" means a person who is (i)
10 registered under Section 203 of the Federal 1940 Investment
11 Advisers Act or (ii) is excluded from the definition of
12 "investment adviser" under Section 202(a)(11) of the Federal
13 1940 Investment Advisers Act.
14 (Source: P.A. 90-70, eff. 7-8-97.)
15 (815 ILCS 5/8b new)
16 Sec. 8b. Telephone solicitation.
17 (a) A telephone solicitor may not make an unsolicited
18 telephone call to a natural person who does not have a
19 previously existing account relationship with the telephone
20 solicitor unless:
21 (1) immediately after making contact with the
22 natural person to whom the call is made the telephone
23 solicitor identifies himself or herself by name,
24 identifies the dealer, investment adviser, or other
25 person on whose behalf the telephone solicitor is
26 calling, and states the purpose of the call; and
27 (2) the telephone solicitor makes the telephone call
28 after 12:00 noon and before 9:00 p.m. on a Sunday or
29 after 9:00 a.m. and before 9:00 p.m. on a weekday or a
30 Saturday, as determined in the Central Time Zone.
31 (b) The Secretary of State may adopt rules or regulations
32 necessary to implement or enforce this Section.
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1 (c) A telephone solicitor subject to this Section who
2 makes unsolicited telephone calls shall implement in-house
3 systems and procedures to ensure that every effort is made to
4 not call persons who ask not to be called by the telephone
5 solicitor again.
6 (815 ILCS 5/14) (from Ch. 121 1/2, par. 137.14)
7 Sec. 14. Sentence.
8 A. Any person who violates any of the provisions of
9 subsection A, B, C, or D or paragraph (3) of subsection K of
10 Section 12 of this Act shall be guilty of a Class A
11 misdemeanor; provided that if such person commits such
12 offense with knowledge of the existence, meaning or
13 application of the respective subsection as provided in
14 Section 4-3(c) of the Criminal Code of 1961, or, in the case
15 of a failure to comply with the terms of any order of the
16 Secretary of State as provided under subsection D of Section
17 12 of this Act, with knowledge of the existence of such
18 order, such person shall be guilty of a Class 4 felony.
19 B. Any person who violates any of the provisions of
20 subsection E, F, G, H, I, or J, or paragraph (1) or (2) of
21 subsection K of Section 12 of this Act shall be guilty of a
22 Class 3 felony.
23 B-5. A person who violates a provision of subsection E,
24 F, G, H, I, or J or paragraph (1) or (2) of subsection K of
25 Section 12 of this Act by use of a plan, program, or campaign
26 that is conducted using one or more telephones for the
27 purpose of inducing the purchase or sale of securities is
28 guilty of a Class 2 felony.
29 B-10. A person who in the course of violating a provision
30 of subsection E, F, G, H, I, or J or paragraph (1) or (2) of
31 subsection K of Section 12 of this Act induces a person 60
32 years of age or older to purchase or sell securities is
33 guilty of a Class 2 felony.
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1 C. No prosecution for violation of any provision of this
2 Act shall bar or be barred by any prosecution for the
3 violation of any other provision of this Act or of any other
4 statute; but all prosecutions under this Act or based upon
5 any provision of this Act must be commenced within 3 years
6 after the violation upon which such prosecution is based;
7 provided however, that if the accused has intentionally
8 concealed evidence of a violation of subsection E, F, G, H,
9 I, J, or K of Section 12 of this Act, the period of
10 limitation prescribed herein shall be extended up to an
11 additional 2 years after the proper prosecuting officer
12 becomes aware of the offense but in no such event shall the
13 period of limitation so extended be more than 2 years beyond
14 the expiration of the period otherwise applicable.
15 D. For the purposes of this Act all persons who shall
16 sell or offer for sale, or who shall purchase or offer to
17 purchase, securities in violation of the provisions of this
18 Act, or who shall in any manner knowingly authorize, aid or
19 assist in any unlawful sale or offering for sale or unlawful
20 purchase or offer to purchase shall be deemed equally guilty,
21 and may be tried and punished in the county in which said
22 unlawful sale or offering for sale or unlawful purchase or
23 offer to purchase was made, or in the county in which the
24 securities so sold or offered for sale or so purchased or
25 offered to be purchased were delivered or proposed to be
26 delivered to the purchaser thereof or by the seller thereof,
27 as the case may be.
28 E. Any person who shall be convicted of a second or any
29 subsequent offense specified in subsection A, B, C, D, or
30 paragraph (3) of subsection K of Section 12 of this Act shall
31 be guilty of a Class 3 felony, and any person who shall be
32 convicted of a second or any subsequent offense specified in
33 subsection E, F, G, H, I, J, or paragraph (1) or (2) of
34 subsection K of Section 12 of this Act shall be guilty of a
SB1694 Engrossed -6- LRB9011287SMdv
1 Class 2 felony.
2 F. If any person referred to in this Section is not a
3 natural person, it may upon conviction of a first offense be
4 fined up to $25,000, and if convicted of a second and
5 subsequent offense, may be fined up to $50,000, in addition
6 to any other sentence authorized by law.
7 G. This Act shall not be construed to repeal or affect
8 any law now in force relating to the organization of
9 corporations in this State or the admission of any foreign
10 corporation to do business in this State.
11 H. For the purposes of this Act, all persons who sell or
12 offer for sale, or who purchase or offer to purchase any
13 mineral investment contract or mineral deferred delivery
14 contract in violation of the provisions of this Act or who,
15 in any manner, knowingly authorize, aid, or assist in any
16 unlawful sale or offer for sale or unlawful purchase or offer
17 to purchase any mineral investment contract or mineral
18 deferred delivery contract shall be deemed equally guilty and
19 may be tried and punished in the county in which the unlawful
20 sale or offer for sale or unlawful purchase or offer to
21 purchase any mineral investment contract or mineral deferred
22 delivery contract was made or in the county in which the
23 mineral investment contract or mineral deferred delivery
24 contract so sold or offered for sale or so purchased or
25 offered to be purchased was delivered or proposed to be
26 delivered to the purchaser thereof or by the seller thereof,
27 as the case may be, or in Sangamon County.
28 (Source: P.A. 87-463.)
29 Section 99. Effective date. This Act takes effect upon
30 becoming law.