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Public Act 098-0174
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| HB2969 Enrolled | LRB098 10745 JLS 41091 b |
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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 Section 13 as follows:
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(815 ILCS 5/13) (from Ch. 121 1/2, par. 137.13)
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Sec. 13. Private and other civil remedies; securities.
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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
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Section; and the issuer, controlling person, underwriter,
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dealer or other person by or on behalf of whom said sale was |
made, and
each underwriter, dealer 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 |
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:
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(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 |
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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
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contract made in respect of the sale; or
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(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.
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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.
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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
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securities to him or her is
voidable, to each person from whom |
recovery will be sought, by
registered mail or certified mail, |
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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.
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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
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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
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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.
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D. No action shall be brought for relief under this Section
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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; |
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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
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year period provided herein shall begin to run upon the earlier |
of:
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(1) the date upon which the party bringing the
action |
has actual knowledge of the alleged violation of this Act; |
or
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(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; but in no event shall the
period of |
limitation so extended be more than 2 years beyond the
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expiration of the 3 year period otherwise applicable.
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E. The term purchaser as used in this Section shall include |
the
personal representative or representatives of the |
purchaser.
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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 |
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this Act. Upon a proper showing the court may grant a
permanent |
or preliminary injunction or temporary restraining order
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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
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against the defendant for the use of the State.
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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.
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(2) A copy of the complaint shall be served upon the
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Secretary of State within one business day of filing in
the |
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form and manner prescribed by the Secretary of State by rule or
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regulation; provided, that the failure to comply with this |
provision shall
not invalidate the action which is the subject |
of the complaint.
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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
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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.
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(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96; 90-70, |
eff.
7-8-97.)
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Section 99. Effective date. This Act takes effect upon |
becoming law.
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