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Davie, Florida, 33314
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Securities Law
FEDERAL SECURITIES LAW
 - Securities Act of 1933
 - Securities Act of 1934
    - Rules Promulgated under
      the Securities Act of 1934

STATE SECURITIES LAW

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Selected Sections of the

Illinois Securities Act

 

Sections included on the Illinois Securities Act Page:

________________________________________________________________________

Sec. 1. Short Title

This Act may be cited as the Illinois Securities Law of 1953.

    Sec. 2. Definitions.

As used in this Act, unless the context otherwise requires, the terms defined in the Sections of this Act that precede Section 3 shall have the meanings therein ascribed.

    Sec. 2.1. Security. "Security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit‑sharing agreement, collateral‑trust certificate, preorganization certificate or subscription, transferable share, investment contract, investment fund share, face‑amount certificate, voting‑trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral lease, right or royalty, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into, relating to foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. "Security" does not mean a mineral investment contract or a mineral deferred delivery contract; provided, however, the Department shall have the authority to regulate these contracts as hereinafter provided.

    Sec. 2.2. "Issuer" means every person who shall have issued or proposes to issue any security; except that (1) with respect to certificates of deposit, voting‑trust certificates, collateral‑trust certificates, and certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions), "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust, agreement or instrument under which such securities are issued; (2) with respect to trusts other than those specified in clause (1) above, where the trustee is a corporation authorized to accept and execute trusts, "issuer" means the entrusters, depositors or creators of the trust and any manager or committee charged with the general direction of the affairs of the trust pursuant to the provisions of the agreement or instrument creating the trust; (3) with respect to equipment trust certificates or like securities, "issuer" means the person to whom the equipment or property is or is to be leased or conditionally sold; and (4) with respect to fractional interests in oil, gas or other mineral lease, right or royalty, "issuer" means the owner of the right or interest therein (whether whole or fractional), in which fractional interests are created by such owner for the purpose of sale.

    Sec. 2.3. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a limited liability company, a limited liability partnership, a trust or any unincorporated organization. As used in this Section, "trust" includes only a trust where the interest or interests of the beneficiary or beneficiaries is a security.

    Sec. 2.4. "Controlling person" means any person offering or selling a security, or group of persons acting in concert in the offer or sale of a security, owning beneficially (and in the absence of knowledge, or reasonable grounds for belief, to the contrary, record ownership shall for the purposes hereof be presumed to be beneficial ownership) either (i) 25% or more of the outstanding voting securities of the issuer of such security where no other person owns or controls a greater percentage of such securities, or (ii) such number of outstanding securities of the issuer of such security as would enable such person, or group of persons, to elect a majority of the board of directors or other managing body of such issuer. In case of unincorporated issuers, "controlling person" means any person offering or selling a security, or group of persons acting in concert in the offer or sale of a security, who directly or indirectly controls the activities of the issuer.

    Sec. 2.5. "Sale" or "sell" shall have the full meaning of that term as applied by or accepted in the courts of this State, and shall include every contract of sale or disposition of a security or interest in a security for value. Any security given with or as a bonus on account of any purchase of securities or property shall be conclusively presumed to constitute a part of the subject of such purchase and shall be deemed to have been sold within the meaning of this Section. A privilege to convert a security into another security shall not be deemed a sale of such other security, provided no consideration from the holder in addition to the surrender or cancellation of the convertible security is required to effect the conversion.

    Sec. 2.5a. Offer. "Offer" shall include every offer to sell or otherwise dispose of, or solicitation of an offer to purchase, whether orally or by means of publication, including but not limited to printed and electronic media, a security or interest in a security for value; provided that the term "offer" shall not include preliminary negotiations or agreements between an issuer and any underwriter or among underwriters who are or are to be in privity of contract with an issuer, or the circulation or publication of an identifying statement or circular or preliminary prospectus, as defined by rules or regulations of the Secretary of State.

    Sec. 2.6. "Underwriter" means any person who has purchased a security from an issuer or a controlling person with a view to, or who offers or sells a security for an issuer or a controlling person in connection with, the distribution thereof, or who participates or has a participation in the direct or indirect underwriting of such distribution; but such term shall not include a person whose interest is limited to a commission or discount from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission or discount. An underwriter shall be deemed to be no longer an underwriter of a security after he or she has completely disposed of his or her allotment of such security or, if he or she did not purchase the security, after he or she has ceased to offer and sell such security for the issuer or controlling person.

    Sec. 2.7. "Dealer" means any person, other than a salesperson, or controlling person and other than a bank organized under the banking laws of this State or of the United States or other than a trust company organized under the laws of this State or other than a regular employee of such bank or trust company, who engages in this State, either for all or part of his or her time, directly or indirectly, as agent, broker or principal, in the business of offering, selling, buying and selling, or otherwise dealing or trading in securities issued by another person, any government or political subdivision or instrumentality thereof.

    Sec. 2.8. "Registered dealer" means a dealer registered under Section 8 of this Act.

    Sec. 2.8a. "Principal of a dealer" means any officer, director, partner, member, trustee or manager of such dealer who is responsible for the supervision of the securities activities in this State of salespersons and for management of the daily business operations in this State of such dealer.

    Sec. 2.9. "Salesperson" means an individual, other than an issuer or a dealer, employed or appointed or authorized by a dealer, issuer or controlling person to offer, purchase or sell securities in this State. The partners or officers of a dealer or issuer shall not be deemed to be salespersons within the meaning of this definition if they are not or have not been regularly engaged in securities offering, purchasing or selling activities other than transactions for their own respective accounts. No individual shall be deemed to be a salesperson solely by reason of effecting transactions in a covered security to qualified purchasers as described in Section 18(b)(3) of the Federal 1933 Act, effecting transactions in a covered security as described in Section 18(b)(4)(D) of the Federal 1933 Act, or engaging in offers or effecting sales of securities to employees of the issuer of such securities or to employees of the parent or any majority owned subsidiary of such issuer, provided that such individual is an employee of such issuer, parent or subsidiary who has not been employed primarily to make such offers or sales and who receives no special compensation, directly or indirectly, for or on account of any such offer or sale. "Salesperson" also means a limited Canadian salesperson. "Salesperson" also means an individual who, in this State, communicates with members of the public to identify prospective customers for the purpose of soliciting the purchase or sale of securities or related services.

    Sec. 2.10. "Registered salesperson" means a salesperson registered under Section 8 of this Act. "Registered salesperson" also means a registered limited Canadian salesperson.

    Sec. 2.10a. Telephone solicitor. "Telephone solicitor" means a natural person who makes or causes to be made an unsolicited telephone call with the intent to offer or sell a security.

    Sec. 2.11. Investment adviser. "Investment adviser" means any person who, for compensation, engages in this State in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities or who, in this State for direct or indirect compensation and as part of a regular advisory business, issues or promulgates analyses or reports concerning securities or any financial planner or other person who, as an integral component of other financially related services, provides the foregoing investment advisory services to others for compensation and as part of a business or who holds himself or herself out as providing the foregoing investment advisory services to others for compensation; but "investment adviser" does not include:
 
   (1) a bank or trust company, or the regular employees of a bank or trust company;

    (2) any lawyer, accountant, engineer, geologist or teacher (i) whose performance of such services is solely incidental to the practice of his or her profession or (ii) who:

        (A) does not exercise investment discretion with respect to the assets of clients or maintain custody of the assets of clients for the purpose of investing those assets, except when the person is acting as a bona fide fiduciary in a capacity such as an executor, trustee, personal representative, estate or trust agent, guardian, conservator, or person serving in a similar fiduciary capacity;
 
        (B) does not accept or receive, directly or indirectly, any commission, fee, or other remuneration contingent upon the purchase or sale of any specific security by a client of such person; and
 
        (C) does not advise on the purchase or sale of specific securities, except that this clause (C) shall not apply when the advice about specific securities is based on financial statement analyses or tax considerations that are reasonably related to and in connection with the person's profession;
 
    (3) any registered dealer or partner, officer, director or regular employee of a registered dealer, or registered salesperson, whose performance of these services, in each case, is solely incidental to the conduct of the business of the registered dealer or registered salesperson, as the case may be, and who receives no special compensation, directly or indirectly, for such services;
    (4) any publisher or regular employee of such publisher of a bona fide newspaper, news magazine or business or financial publication of regular and established paid circulation;

    (5) any person whose advice, analyses or reports relate only to securities which are direct obligations of, or obligations guaranteed as to principal or interest by, the United States, any state or any political subdivision of any state, or any public agency or public instrumentality of any one or more of the foregoing;

    (5.5) any person who is a federal covered investment adviser; or

    (6) any other persons who are not within the intent of this Section as the Secretary of State may designate by rules and regulations or order.

    Sec. 2.12. "Registered investment adviser" means an investment adviser registered under Section 8 of this Act.

    Sec. 2.12a. "Principal of an investment adviser" means any officer, director, partner, member, trustee or manager of such investment adviser who is responsible for the supervision of the registered representatives in this State of such investment adviser, and for management of the daily business operations in this State of such investment adviser.

    Sec. 2.12b. Investment adviser representative. "Investment adviser representative" means, with respect to an investment adviser who is required to register under this Act, any partner, officer, director of (or a person occupying a similar status or performing similar functions), or other natural person employed by or associated with an investment adviser, except clerical or ministerial personnel, who in this State:

        (1) makes any recommendations or otherwise renders advice regarding securities;
 
        (2) manages accounts or portfolios of clients;

        (3) determines what recommendation or advice  regarding securities should be given;
 
        (4) supervises any employee who performs any of the 
     foregoing; or
 
        (5) solicits, refers, offers, or negotiates for the sale of, or sells, investment advisory services.
 
    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 by the Securities and Exchange Commission under Section 203A of the Federal 1940 Investment Advisers Act.

    Sec. 2.12c. Registered investment adviser representative. "Registered investment adviser representative" means an investment adviser representative registered under Section 8 of this Act.

    Sec. 2.13. "Effective date" when used with respect to a registration under the Federal 1933 Act means the date and time as of which a statement for the registration of securities under said Act first becomes effective or, upon the election of an applicant for registration under subsection A of Section 5, subsection A of Section 6 or subsection A of Section 7 of this Act, the date and time as of which a post‑effective amendment to the registration statement filed under the Federal 1933 Act relating to such securities becomes effective; provided that in the case of securities initially registered under the Federal 1933 Act for the invitation of competitive bids, "effective date" shall mean the date upon which a post effective amendment to the registration statement filed under the Federal 1933 Act relating to such securities becomes effective for the first offering of such securities otherwise than for such invitation or, upon the election of any applicant for registration under subsection A of Section 5, subsection A of Section 6 or subsection A of Section 7 of this Act, the date and time as of which a subsequent post effective amendment filed under the Federal 1933 Act relating to such securities becomes effective.

    Sec. 2.14. "Face amount certificate contract" means any form of "face amount certificate" or "periodic payment plan certificate" (as so designated and defined under the Federal Investment Company Act of 1940) and shall also mean any form of annuity contract (other than an annuity contract issued by a life insurance company authorized to transact business in this State), or installment face amount certificate contract, or installment face amount certificate, or installment participation certificate, or installment face amount certificate bond, or similar security evidencing an obligation on the part of the issuer to pay a stated or determinable sum or sums at a fixed or determinable date or dates more than twenty four months after the date of issuance, or to pay the proceeds of liquidation of an interest in certain specified securities or in a unit or fund, upon the payment of a single lump sum at the date of issuance, or in consideration of the payment of periodic installments of a stated or determinable amount.

    Sec. 2.15. "Investment fund shares" means securities issued by persons known as "investment funds" or "investment companies" or "investment trusts" but such term shall not include securities issued by persons not within the intent of this Section as the Secretary of State may designate by rules and regulations or order.
(Source: Laws 1961, p. 3663.) 

    Sec. 2.16. "Securities Director" means the chief administrator of the Securities Department, appointed by the Secretary of State.

   Sec. 2.17. "Federal 1933 Act" means the Act of the Congress of the United States known as the Securities Act of 1933, as amended.

    Sec. 2.17a. "Federal 1934 Act" means the Act of Congress of the United States known as the Securities Exchange Act of 1934, as amended.

    Sec. 2.17b. Federal 1974 Act. "Federal 1974 Act" means the Act of Congress of the United States known as the Commodity Exchange Act, as amended.

    Sec. 2.17c. "Federal Bankruptcy Code" means the Act of Congress of the United States known as the Bankruptcy Code of 1978, as amended.

    Sec. 2.17d. "Federal 1940 Investment Company Act" means the Act of Congress of the United States known as the Investment Company Act of 1940, as amended.

    Sec. 2.17e. "Federal 1940 Investment Advisers Act" means the Act of Congress of the United States known as the Investment Advisers Act of 1940, as amended.

    Sec. 2.17f. Federal 1996 Act. "Federal 1996 Act" means the Act of Congress of the United States known as the National Securities Markets Improvement Act of 1996.

    Sec. 2.18. "Clearing corporation" means a clearing corporation as defined in Section 8/102 of the Uniform Commercial Code, as amended.

    Sec. 2.24. "State" means any state, territory, or possession of the United States, the District of Columbia and Puerto Rico.

    Sec. 2.25. "Federal ERISA Act" means the Act of Congress of the United States known as the Employee Retirement Income Security Act of 1974, as amended.

    Sec. 2.26. Mineral investment contract. "Mineral investment contract" means any investment, account, agreement, or contract whereby the investor's profits are dependent upon the transportation, mining, minting, milling, flotation, refining, hallmarking, sale, resale, or repurchase of a metal or mineral, even if there is any potential for profit from fluctuation in the value of the metal or mineral, except any contract or agreement for the sale or purchase of a metal or mineral between merchants. Nothing herein shall affect the jurisdiction or authority of the Commodity Futures Trading Commission under the Federal 1974 Act or the application of any provision thereof or regulation thereunder to any person or transaction subject thereto. The Secretary of State may, for the purposes of this Section by rules and regulations, define the term "between merchants".

    Sec. 2.27. Mineral deferred delivery contract. "Mineral deferred delivery contract" means any account, agreement, or contract for the purchase or sale, primarily for speculation or investment purposes and not for the use or consumption by the offeree or purchaser, of a metal or mineral, whether for immediate or subsequent delivery, and whether characterized as a cash contract, deferred shipment contract, installment contract, or otherwise. Any mineral deferred delivery contract offered or sold, in the absence of evidence to the contrary, is presumed to be offered or sold for speculation or investment purposes. A mineral deferred delivery contract does not include any of the following:

        (1) Any contract or agreement that requires, and in which the purchaser receives, within 28 calendar days after the payment in good funds of any portion of the purchase price, physical delivery of the metal or mineral to be purchased under the contract or agreement.
 
        (2) Any contract or agreement for the sale or  purchase of a metal or mineral between merchants.  Nothing herein shall affect the jurisdiction or authority of the Commodity Futures Trading Commission under the Federal 1936 Act or the application of any provision thereof or regulation thereunder to any person or transaction subject thereto. The Secretary of State may, for the purposes of this Section, by rules and regulations, define (i) the means that constitute "physical delivery" of a metal or mineral and (ii) the term "between merchants".

    Sec. 2.28. Securities exchange. "Securities exchange" means any organization, association, or group of persons, incorporated or unincorporated, located within this State that constitutes, maintains, or provides a marketplace, facilities, or electronic communications equipment for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange as that term is generally understood. The term includes the marketplace, facilities, and electronic communications equipment used by such an exchange. "Securities exchange" does not include any exchange, stock market operated by a national securities association registered under Section 15A of the Federal 1934 Act, automated quotation system or board of trade whose principal place of business is located in any state other than this State, or any exchange, automated quotation system, or board of trade registered under the Federal 1934 Act or designated as a contract market under the Federal 1974 Act or any affiliate thereof, or any dealer registered under this Act, or any broker‑dealer registered under any federal securities Act, or any broker‑dealer who 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, or a member of an association of dealers or broker‑dealers registered as a national securities association pursuant to Section 15A of the Federal 1934 Act, or any exchange, automated quotation system, or board of trade set forth in subsection G of Section 3 of this Act, or any other exchange, automated quotation system, or board of trade that the Secretary of State, by rule or regulation, deems to have substantially equivalent standards for listing or designation as required by any such exchange, automated quotation system, or board of trade.

    Sec. 2.29 Covered security. "Covered security" means any security that is a covered security under Section 18(b) of the Federal 1933 Act or rules or regulations promulgated thereunder.

    Sec. 2.30. Federal covered investment adviser. "Federal covered investment adviser" means a person who is registered under Section 203 of the Federal 1940 Investment Advisers Act.

    Sec. 2.31. Limited Canadian salesperson. "Limited Canadian salesperson" means a salesperson who is a resident of Canada, has no office or other physical presence in this State, and complies with conditions specified by the Secretary of State through rule or order.

   Sec. 2.32. Limited Canadian dealer. "Limited Canadian dealer" means a dealer who is a resident of Canada, has no office or other physical presence in this State, and complies with conditions specified by the Secretary of State through rule or order.

    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, 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, 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 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, 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, 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, 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, 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.

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          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, 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.

    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 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:

        (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; but in no event shall the period of limitation so extended be more than 2 years beyond the expiration of the 3 year period otherwise applicable.
 
    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.

    Sec. 14. Sentence.

    A. Any person who violates any of the provisions of subsection A, B, C, or D of Section 12 or paragraph (3) of subsection K of Section 12 of this Act shall be guilty of a Class 4 felony.

    B. Any person who violates any of the provisions of subsection E, F, G, H, I, or J, paragraph (1) or (2) of subsection K, or subsection L of Section 12 of this Act shall be guilty of a Class 3 felony.

    B5. A person who violates a provision of subsection E, F, G, H, I, or J or paragraph (1) or (2) of subsection K of Section 12 of this Act 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 is guilty of a Class 2 felony.
 
   B10. A person who in the course of violating a provision of subsection E, F, G, H, I, or J or paragraph (1) or (2) of subsection K of Section 12 of this Act induces a person 60 years of age or older to purchase or sell securities is guilty of a Class 2 felony.

    C. No prosecution for violation of any provision of this Act shall bar or be barred by any prosecution for the violation of any other provision of this Act or of any other statute; but all prosecutions under this Act or based upon any provision of this Act must be commenced within 3 years after the violation upon which such prosecution is based; provided however, that if the accused has intentionally concealed evidence of a violation of subsection E, F, G, H, I, J, or K of Section 12 of this Act, the period of limitation prescribed herein shall be extended up to an additional 2 years after the proper prosecuting officer becomes aware of the offense but in no such event shall the period of limitation so extended be more than 2 years beyond the expiration of the period otherwise applicable.

    D. For the purposes of this Act all persons who shall sell or offer for sale, or who shall purchase or offer to purchase, securities in violation of the provisions of this Act, or who shall in any manner knowingly authorize, aid or assist in any unlawful conduct under this Act shall be deemed equally guilty, and may be tried and punished in the county in which said unlawful sale or offering for sale or unlawful purchase or offer to purchase was made, or in the county in which the securities so sold or offered for sale or so purchased or offered to be purchased were delivered or proposed to be delivered to the purchaser thereof or by the seller thereof, as the case may be.

    E. Any person who shall be convicted of a second or any subsequent offense specified in subsection A, B, C, D, or paragraph (3) of subsection K of Section 12 of this Act shall be guilty of a Class 3 felony, and any person who shall be convicted of a second or any subsequent offense specified in subsection E, F, G, H, I, J, or paragraph (1) or (2) of subsection K of Section 12 of this Act shall be guilty of a Class 2 felony.

    F. If any person referred to in this Section is not a natural person, it may upon conviction of a first offense be fined up to $25,000, and if convicted of a second and subsequent offense, may be fined up to $50,000, in addition to any other sentence authorized by law.

    G. This Act shall not be construed to repeal or affect any law now in force relating to the organization of corporations in this State or the admission of any foreign corporation to do business in this State.

    H. For the purposes of this Act, all persons who sell or offer for sale, or who purchase or offer to purchase any mineral investment contract or mineral deferred delivery contract in violation of the provisions of this Act or who, in any manner, knowingly authorize, aid, or assist in any unlawful sale or offer for sale or unlawful purchase or offer to purchase any mineral investment contract or mineral deferred delivery contract shall be deemed equally guilty and may be tried and punished in the county in which the unlawful sale or offer for sale or unlawful purchase or offer to purchase any mineral investment contract or mineral deferred delivery contract was made or in the county in which the mineral investment contract or mineral deferred delivery contract so sold or offered for sale or so purchased or offered to be purchased was delivered or proposed to be delivered to the purchaser thereof or by the seller thereof, as the case may be, or in Sangamon County.

    Sec. 15. Evidentiary matters. A. In any action, administrative, civil or criminal, where a defense is based upon any exemption provided for in this Act, the burden of proving such exemption shall be upon the party raising such defense.

    B. In any action, administrative, civil or criminal, a certificate under the seal of the State of Illinois, signed by the Secretary of State, attesting to the filing of or the absence of any filing of any document or record with the Secretary of State under this Act, shall constitute prima facie evidence of such filing or of the absence of such filing, and shall be admissible in evidence in any such administrative, criminal or civil action.

    C. In any action, administrative, civil or criminal, the Secretary of State may issue a certificate under the seal of the State of Illinois, signed by the Secretary of State, showing that any document or record is a true and exact copy, photostatic or otherwise, of the record or document on file with the Secretary of State under this Act; and such certified document or record shall be admissible in evidence with the same effect as the original document or record would have if actually produced.

    D. Any certificate pursuant to subsection B or C of this Section 15 shall be furnished by the Secretary of State upon application therefor in the form and manner prescribed by the Secretary of State by rule or regulation, and shall be accompanied by payment of a certification fee in the amount specified in Section 11a of this Act, which shall not be returnable in any event.

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The above is not the complete act. This page contains only certain sections of the statute which we believe you may find informative. We do not and cannot guarantee the above sections are current law in this state. Legislatures may enact revised statutes at any time. Moreover these sections are presented for informational purposes only and are presented "as is" with all faults and with no warranties or guarantees as to the accuracy. Further, The content on these pages are not offered or intended to be legal advice by this firm for any purpose or manner whatsoever. If you require the current and complete version of the Law in your state, you should visit the Legislature home page of the particular state for more information or contact an attorney for advice on obtaining such information.

 
 
 
 

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