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| Public Act 098-0174 | ||||
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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 | ||||
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, | ||
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; | ||
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 | ||
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 | ||
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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