Public Act 098-0174
 
HB2969 EnrolledLRB098 10745 JLS 41091 b


  
    AN ACT concerning business.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Illinois Securities Law of 1953 is amended  
by changing Section 13 as follows:
 



    (815 ILCS 5/13)  (from Ch. 121 1/2, par. 137.13)



    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.

(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96; 90-70, 
eff.
7-8-97.)

 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.