Public Act 099-0182

HB3429 Enrolled LRB099 04381 JLS 29575 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 Sections 4, 8, 11, 11a, 12, 13, and 18.1 and by

adding Sections 2.34, 2.35, 2.36, and 8d as follows:

(815 ILCS 5/2.34 new)

Sec. 2.34. Accredited investor. "Accredited investor" has

the meaning given to that term in 17 CFR 230.501(a), as amended

and in effect from time to time.

(815 ILCS 5/2.35 new)

Sec. 2.35. Qualified escrowee. "Qualified escrowee" means

a person, firm, partnership, association, corporation, or

other legal entity who: (a) falls under the definition of

"title insurance company" under, and pursuant to the terms and

requirements of, the Title Insurance Act; (b) is certified as

an independent escrowee under, and pursuant to the terms and

requirements of, the Title Insurance Act; or (c) is a bank,

regulated trust company, savings bank, savings and loan

association, or credit union which is authorized to do business

in the State and which maintains at least one physical business

location within the State.

(815 ILCS 5/2.36 new)

Sec. 2.36. Registered Internet portal. "Registered

Internet portal" means an Internet portal maintained by a

corporation or other legal entity that is being used to offer

or sell securities and that meets the requirements of Section

8d of this Act.

(815 ILCS 5/4) (from Ch. 121 1/2, par. 137.4)

Sec. 4. Exempt transactions. The provisions of Sections 2a,

5, 6 and 7 of this Act shall not apply to any of the following

transactions, except where otherwise specified in this Section

4:

A. Any offer or sale, whether through a dealer or

otherwise, of securities by a person who is not an issuer,

underwriter, dealer or controlling person in respect of such

securities, and who, being the bona fide owner of such

securities, disposes thereof for his or her own account;

provided, that such offer or sale is not made directly or

indirectly for the benefit of the issuer or of an underwriter

or controlling person.

B. Any offer, sale, issuance or exchange of securities of

the issuer to or with security holders of the issuer except to

or with persons who are security holders solely by reason of

holding transferable warrants, transferable options, or

similar transferable rights of the issuer, if no commission or

other remuneration is paid or given directly or indirectly for

or on account of the procuring or soliciting of such sale or

exchange (other than a fee paid to underwriters based on their

undertaking to purchase any securities not purchased by

security holders in connection with such sale or exchange).

C. Any offer, sale or issuance of securities to any

corporation, bank, savings bank, savings institution, savings

and loan association, trust company, insurance company,

building and loan association, or dealer; to a pension fund,

pension trust, or employees' profit sharing trust, other

financial institution or institutional investor, any

government or political subdivision or instrumentality

thereof, whether the purchaser is acting for itself or in some

fiduciary capacity; to any partnership or other association

engaged as a substantial part of its business or operations in

purchasing or holding securities; to any trust in respect of

which a bank or trust company is trustee or co-trustee; to any

entity in which at least 90% of the equity is owned by persons

described under subsection C, H, or S of this Section 4; to any

employee benefit plan within the meaning of Title I of the

Federal ERISA Act if (i) the investment decision is made by a

plan fiduciary as defined in Section 3(21) of the Federal ERISA

Act and such plan fiduciary is either a bank, savings and loan

association, insurance company, registered investment adviser

or an investment adviser registered under the Federal 1940

Investment Advisers Act, or (ii) the plan has total assets in

excess of $5,000,000, or (iii) in the case of a self-directed

plan, investment decisions are made solely by persons that are

described under subsection C, D, H or S of this Section 4; to

any plan established and maintained by, and for the benefit of

the employees of, any state or political subdivision or agency

or instrumentality thereof if such plan has total assets in

excess of $5,000,000; or to any organization described in

Section 501(c)(3) of the Internal Revenue Code of 1986, any

Massachusetts or similar business trust, or any partnership, if

such organization, trust, or partnership has total assets in

excess of $5,000,000.

D. The Secretary of State is granted authority to create by

rule or regulation a limited offering transactional exemption

that furthers the objectives of compatibility with federal

exemptions and uniformity among the states. The Secretary of

State shall prescribe by rule or regulation the amount of the

fee for filing any report required under this subsection, but

the fee shall not be less than the minimum amount nor more than

the maximum amount established under Section 11a of this Act

and shall not be returnable in any event.

E. Any offer or sale of securities by an executor,

administrator, guardian, receiver or trustee in insolvency or

bankruptcy, or at any judicial sale, or at a public sale by

auction held at an advertised time and place, or the offer or

sale of securities in good faith and not for the purpose of

avoiding the provisions of this Act by a pledgee of securities

pledged for a bona fide debt.

F. Any offer or sale by a registered dealer, either as

principal or agent, of any securities (except face amount

certificate contracts and investment fund shares) at a price

reasonably related to the current market price of such

securities, provided:

(1) (a) the securities are issued and outstanding;

(b) the issuer is required to file reports pursuant

to Section 13 or Section 15(d) of the Federal 1934 Act

and has been subject to such requirements during the 90

day period immediately preceding the date of the offer

or sale, or is an issuer of a security covered by

Section 12(g)(2)(B) or (G) of the Federal 1934 Act;

(c) the dealer has a reasonable basis for believing

that the issuer is current in filing the reports

required to be filed at regular intervals pursuant to

the provisions of Section 13 or Section 15(d), as the

case may be, of the Federal 1934 Act, or in the case of

insurance companies exempted from Section 12(g) of the

Federal 1934 Act by subparagraph 12(g)(2)(G) thereof,

the annual statement referred to in Section

12(g)(2)(G)(i) of the Federal 1934 Act; and

(d) the dealer has in its records, and makes

reasonably available upon request to any person

expressing an interest in a proposed transaction in the

securities, the issuer's most recent annual report

filed pursuant to Section 13 or 15(d), as the case may

be, of the Federal 1934 Act or the annual statement in

the case of an insurance company exempted from Section

12(g) of the Federal 1934 Act by subparagraph

12(g)(2)(G) thereof, together with any other reports

required to be filed at regular intervals under the

Federal 1934 Act by the issuer after such annual report

or annual statement; provided that the making

available of such reports pursuant to this

subparagraph, unless otherwise represented, shall not

constitute a representation by the dealer that the

information is true and correct, but shall constitute a

representation by the dealer that the information is

reasonably current; or

(2) (a) prior to any offer or sale, an application for

the authorization thereof and a report as set forth

under sub-paragraph (d) of this paragraph (2) has been

filed by any registered dealer with and approved by the

Secretary of State pursuant to such rules and

regulations as the Secretary of State may prescribe;

(b) the Secretary of State shall have the power by

order to refuse to approve any application or report

filed pursuant to this paragraph (2) if

(i) the application or report does not comply

with the provisions of this paragraph (2), or

(ii) the offer or sale of such securities would

work or tend to work a fraud or deceit, or

(iii) the issuer or the applicant has violated

any of the provisions of this Act;

(c) each application and report filed pursuant to

this paragraph (2) shall be accompanied by a filing fee

and an examination fee in the amount established

pursuant to Section 11a of this Act, which shall not be

returnable in any event;

(d) there shall be submitted to the Secretary of

State no later than 120 days following the end of the

issuer's fiscal year, each year during the period of

the authorization, one copy of a report which shall

contain a balance sheet and income statement prepared

as of the issuer's most recent fiscal year end

certified by an independent certified public

accountant, together with such current information

concerning the securities and the issuer thereof as the

Secretary of State may prescribe by rule or regulation

or order;

(e) prior to any offer or sale of securities under

the provisions of this paragraph (2), each registered

dealer participating in the offer or sale of such

securities shall provide upon request of prospective

purchasers of such securities a copy of the most recent

report required under the provisions of sub-paragraph

(d) of this paragraph (2);

(f) approval of an application filed pursuant to

this paragraph (2) of subsection F shall expire 5 years

after the date of the granting of the approval, unless

said approval is sooner terminated by (1) suspension or

revocation by the Secretary of State in the same manner

as is provided for in subsections E, F and G of Section

11 of this Act, or (2) the applicant filing with the

Secretary of State an affidavit to the effect that (i)

the subject securities have become exempt under

Section 3 of this Act or (ii) the applicant no longer

is capable of acting as the applicant and stating the

reasons therefor or (iii) the applicant no longer

desires to act as the applicant. In the event of the

filing of an affidavit under either preceding

sub-division (ii) or (iii) the Secretary of State may

authorize a substitution of applicant upon the new

applicant executing the application as originally

filed. However, the aforementioned substituted

execution shall have no effect upon the previously

determined date of expiration of approval of the

application. Notwithstanding the provisions of this

subparagraph (f), approvals granted under this

paragraph (2) of subsection F prior to the effective

date of this Act shall be governed by the provisions of

this Act in effect on such date of approval; and

(g) no person shall be considered to have violated

Section 5 of this Act by reason of any offer or sale

effected in reliance upon an approval granted under

this paragraph (2) after a termination thereof under

the foregoing subparagraph (f) if official notice of

such termination has not been circulated generally to

dealers by the Secretary of State and if such person

sustains the burden of proof that he or she did not

know, and in the exercise of reasonable care, could not

have known, of the termination; or

(3) the securities, or securities of the same class,

are the subject of an existing registration under Section 5

of this Act.

The exemption provided in this subsection F shall apply

only if the offer or sale is made in good faith and not for the

purpose of avoiding any of the provisions of this Act, and only

if the offer or sale is not made for the direct or indirect

benefit of the issuer of the securities, or the controlling

person in respect of such issuer.

G. (1) Any offer, sale or issuance of a security, whether

to residents or to non-residents of this State, where:

(a) all sales of such security to residents of this

State (including the most recent such sale) within the

immediately preceding 12-month period have been made

to not more than 35 persons or have involved an

aggregate sales price of not more than $1,000,000;

(b) such security is not offered or sold by means

of any general advertising or general solicitation in

this State; and

(c) no commission, discount, or other remuneration

exceeding 20% of the sale price of such security, if

sold to a resident of this State, is paid or given

directly or indirectly for or on account of such sales.

(2) In computing the number of resident purchasers or

the aggregate sales price under paragraph (1) (a) above,

there shall be excluded any purchaser or dollar amount of

sales price, as the case may be, with respect to any

security which at the time of its sale was exempt under

Section 3 or was registered under Section 5, 6 or 7 or was

sold in a transaction exempt under other subsections of

this Section 4.

(3) A prospectus or preliminary prospectus with

respect to a security for which a registration statement is

pending or effective under the Federal 1933 Act shall not

be deemed to constitute general advertising or general

solicitation in this State as such terms are used in

paragraph (1) (b) above, provided that such prospectus or

preliminary prospectus has not been sent or otherwise

delivered to more than 150 residents of this State.

(4) The Secretary of State shall by rule or regulation

require the filing of a report or reports of sales made in

reliance upon the exemption provided by this subsection G

and prescribe the form of such report and the time within

which such report shall be filed. Such report shall set

forth the name and address of the issuer and of the

controlling person, if the sale was for the direct or

indirect benefit of such person, and any other information

deemed necessary by the Secretary of State to enforce

compliance with this subsection G. The Secretary of State

shall prescribe by rule or regulation the amount of the fee

for filing any such report, established pursuant to Section

11a of this Act, which shall not be returnable in any

event. The Secretary of State may impose, in such cases as

he or she may deem appropriate, a penalty for failure to

file any such report in a timely manner, but no such

penalty shall exceed an amount equal to five times the

filing fee. The contents of any such report or portion

thereof may be deemed confidential by the Secretary of

State by rule or order and if so deemed shall not be

disclosed to the public except by order of court or in

court proceedings. The failure to file any such report

shall not affect the availability of such exemption, but

such failure to file any such report shall constitute a

violation of subsection D of Section 12 of this Act,

subject to the penalties enumerated in Section 14 of this

Act. The civil remedies provided for in subsection A of

Section 13 of this Act and the civil remedies of rescission

and appointment of a receiver, conservator, ancillary

receiver or ancillary conservator provided for in

subsection F of Section 13 of this Act shall not be

available against any person by reason of the failure to

file any such report or on account of the contents of any

such report.

H. Any offer, sale or issuance of a security to an

accredited investor provided that such security is not offered

or sold by means of any general advertising or general

solicitation, except as otherwise permitted in this Act. (1)

any natural person who has, or is reasonably believed by the

person relying upon this subsection H to have, a net worth or

joint net worth with that person's spouse, at the time of the

offer, sale or issuance, in excess of $1,000,000 excluding the

value of a principal residence, or (2) any natural person who

had, or is reasonably believed by the person relying upon this

subsection H to have had, an income or joint income with that

person's spouse, in excess of $200,000 in each of the two most

recent years and who reasonably expects, or is reasonably

expected to have, an income in excess of $200,000 in the

current year, or (3) any person that is not a natural person

and in which at least 90% of the equity interest is owned by

persons who meet either of the tests set forth in clauses (1)

or (2) of this subsection H; provided that such security is not

offered or sold by means of any general advertising or general

solicitation in this State.

I. Any offer, sale or issuance of securities to or for the

benefit of security holders of any person incident to a vote by

such security holders pursuant to such person's organizational

document or any applicable statute of the jurisdiction of such

person's organization, on a merger, consolidation,

reclassification of securities, or sale or transfer of assets

in consideration of or exchange for securities of the same or

another person.

J. Any offer, sale or issuance of securities in exchange

for one or more outstanding securities, claims or property

interests, or partly in such exchange and partly for cash,

where such offer, sale or issuance is incident to a

reorganization, recapitalization, readjustment, composition or

settlement of a claim, as approved by a court of competent

jurisdiction of the United States, or any state.

K. Any offer, sale or issuance of securities for patronage,

or as patronage refunds, or in connection with marketing

agreements by cooperative associations organized exclusively

for agricultural, producer, marketing, purchasing, or consumer

purposes; and the sale of subscriptions for or shares of stock

of cooperative associations organized exclusively for

agricultural, producer, marketing, purchasing, or consumer

purposes, if no commission or other remuneration is paid or

given directly or indirectly for or on account of such

subscription, sale or resale, and if any person does not own

beneficially more than 5% of the aggregate amount of issued and

outstanding capital stock of such cooperative association.

L. Offers for sale or solicitations of offers to buy (but

not the acceptance thereof), of securities which are the

subject of a pending registration statement filed under the

Federal 1933 Act and which are the subject of a pending

application for registration under this Act.

M. Any offer or sale of preorganization subscriptions for

any securities prior to the incorporation, organization or

formation of any issuer under the laws of the United States, or

any state, or the issuance by such issuer, after its

incorporation, organization or formation, of securities

pursuant to such preorganization subscriptions, provided the

number of subscribers does not exceed 25 and either (1) no

commission or other remuneration is paid or given directly or

indirectly for or on account of such sale or sales or issuance,

or (2) if any commission or other remuneration is paid or given

directly or indirectly for or on account of such sale or sales

or issuance, the securities are not offered or sold by any

means of general advertising or general solicitation in this

State.

N. The execution of orders for purchase of securities by a

registered salesperson and dealer, provided such persons act as

agent for the purchaser, have made no solicitation of the order

to purchase the securities, have no direct interest in the sale

or distribution of the securities ordered, receive no

commission, profit, or other compensation other than the

commissions involved in the purchase and sale of the securities

and deliver to the purchaser written confirmation of the order

which clearly identifies the commissions paid to the registered

dealer.

O. Any offer, sale or issuance of securities, other than

fractional undivided interests in an oil, gas or other mineral

lease, right or royalty, for the direct or indirect benefit of

the issuer thereof, or of a controlling person, whether through

a dealer (acting either as principal or agent) or otherwise, if

the securities sold, immediately following the sale or sales,

together with securities already owned by the purchaser, would

constitute 50% or more of the equity interest of any one

issuer, provided that the number of purchasers is not more than

5 and provided further that no commission, discount or other

remuneration exceeding 15% of the aggregate sale price of the

securities is paid or given directly or indirectly for or on

account of the sale or sales.

P. Any offer, sale or issuance of securities (except face

amount certificate contracts and investment fund shares)

issued by and representing an interest in an issuer which is a

business corporation incorporated under the laws of this State,

the purposes of which are to provide capital and supervision

solely for the redevelopment of blighted urban areas located in

a municipality in this State and whose assets are located

entirely within that municipality, provided: (1) no

commission, discount or other remuneration is paid or given

directly or indirectly for or on account of the sale or sales

of such securities; (2) the aggregate amount of any securities

of the issuer owned of record or beneficially by any one person

will not exceed the lesser of $5,000 or 4% of the equity

capitalization of the issuer; (3) the officers and directors of

the corporation have been bona fide residents of the

municipality not less than 3 years immediately preceding the

effectiveness of the offering sheet for the securities under

this subsection P; and (4) the issuer files with the Secretary

of State an offering sheet descriptive of the securities

setting forth:

(a) the name and address of the issuer;

(b) the title and total amount of securities to be

offered;

(c) the price at which the securities are to be

offered; and

(d) such additional information as the Secretary of

State may prescribe by rule and regulation.

The Secretary of State shall within a reasonable time

examine the offering sheet so filed and, unless the Secretary

of State shall make a determination that the offering sheet so

filed does not conform to the requirements of this subsection

P, shall declare the offering sheet to be effective, which

offering sheet shall continue effective for a period of 12

months from the date it becomes effective. The fee for

examining the offering sheet shall be as established pursuant

to Section 11a of this Act, and shall not be returnable in any

event. The Secretary of State shall by rule or regulation

require the filing of a report or reports of sales made to

residents of this State in reliance upon the exemption provided

by this subsection P and prescribe the form of such report and

the time within which such report shall be filed. The Secretary

of State shall prescribe by rule or regulation the amount of

the fee for filing any such report, but such fee shall not be

less than the minimum amount nor more than the maximum amount

established pursuant to Section 11a of this Act, and shall not

be returnable in any event. The Secretary of State may impose,

in such cases as he or she may deem appropriate, a penalty for

failure to file any such report in a timely manner, but no such

penalty shall exceed an amount equal to five times the filing

fee. The contents of any such report shall be deemed

confidential and shall not be disclosed to the public except by

order of court or in court proceedings. The failure to file any

such report shall not affect the availability of such

exemption, but such failure to file any such report shall

constitute a violation of subsection D of Section 12 of this

Act, subject to the penalties enumerated in Section 14 of this

Act. The civil remedies provided for in subsection A of Section

13 of this Act and the civil remedies of rescission and

appointment of a receiver, conservator, ancillary receiver or

ancillary conservator provided for in subsection F of Section

13 of this Act shall not be available against any person by

reason of the failure to file any such report or on account of

the contents of any such report.

Q. Any isolated transaction, whether effected by a dealer

or not.

R. Any offer, sale or issuance of a security to any person

who purchases at least $150,000 of the securities being

offered, where the purchaser's total purchase price does not,

or it is reasonably believed by the person relying upon this

subsection R that said purchase price does not, exceed 20

percent of the purchaser's net worth at the time of sale, or if

a natural person a joint net worth with that person's spouse,

for one or any combination of the following: (i) cash, (ii)

securities for which market quotations are readily available,

(iii) an unconditional obligation to pay cash or securities for

which quotations are readily available, which obligation is to

be discharged within five years of the sale of the securities

to the purchaser, or (iv) the cancellation of any indebtedness

owed by the issuer to the purchaser; provided that such

security is not offered or sold by means of any general

advertising or general solicitation in this State.

S. Any offer, sale or issuance of a security to any person

who is, or who is reasonably believed by the person relying

upon this subsection S to be, a director, executive officer, or

general partner of the issuer of the securities being offered

or sold, or any director, executive officer, or general partner

of a general partner of that issuer. For purposes of this

subsection S, "executive officer" shall mean the president, any

vice president in charge of a principal business unit, division

or function (such as sales, administration or finance), any

other officer who performs a policy making function, or any

other person who performs similar policy making functions for

the issuer. Executive officers of subsidiaries may be deemed

executive officers of the issuer if they perform such policy

making functions for the issuer.

A document being filed pursuant to this Section 4 shall be

deemed filed, and any fee paid pursuant to this Section 4 shall

be deemed paid, upon the date of actual receipt thereof by the

Secretary of State.

T. An offer or sale of a security by an issuer that is

organized and, as of the time of the offer and the time of

sale, in good standing under the laws of the State of Illinois,

made solely to persons or entities that are, as of the time of

the offer and time of sale, residents of the State of Illinois,

provided:

(1) The offering meets all of the requirements of the

federal exemption for intrastate offerings provided in

Section 3(a)(11) of the Securities Act of 1933 (15 U.S.C.

77c(a)(11)) and Rule 147 adopted under the Securities Act

of 1933 (17 CFR 230.147).

(2) The aggregate purchase price of all securities sold

by an issuer in reliance on the exemption under this

subsection, within any 12-month period, does not exceed:

(i) $1,000,000; or (ii) $4,000,000 if the issuer has

undergone and made available (directly, or through a

registered Internet portal), to each prospective purchaser

and the Secretary of State, copies of its most recent

financial statements which have been audited by an

independent auditor and certified by a senior officer of

the issuer as fairly, completely, and accurately

presenting the financial condition of the issuer, in all

material respects, as of the dates indicated therein.

Amounts received in connection with any offer or sale to

any accredited investor or any of the following shall not

count toward the calculation of the foregoing monetary

limitations:

(a) any entity (including, without limitation, any

trust) in which all of the equity interests are owned

by (or with respect to any trust, the primary

beneficiaries are) persons who are accredited

investors or who meet one or more of the criteria in

subparagraphs (b) through (d) of this paragraph (2);

(b) with respect to participating in an offering of

a particular issuer, a natural person serving as an

officer, director, partner, or trustee of, or

otherwise occupying similar status or performing

similar functions with respect to, such issuer;

(c) with respect to participating in an offering of

a particular issuer, a natural person or entity who

owns 10% or more of the then aggregate outstanding

voting capital securities of such issuer; or

(d) such other person or entity as the Secretary of

State may hereafter exempt by rule.

The Secretary of State may hereafter cumulatively

increase the dollar limitations provided in this

paragraph.

(3) The aggregate amount sold by an issuer to any

purchaser (other than an accredited investor or a person or

entity which meets one or more of the criteria in

subparagraphs (a) through (d) of paragraph (2) of this

subsection T) in an offering of securities made in reliance

on the exemption provided in this subsection T, within any

consecutive 12-month period, does not exceed $5,000.

(4) The Secretary of State shall establish by rule the

duties of the issuer including disclosure and filing

requirements, treatment of escrow funds and agreements,

production of financial statements, and other requirements

as deemed necessary.

(5) The issuer has made available, to each prospective

purchaser and the Secretary of State, copies of its most

recent financial statements personally certified by one or

more senior officers of the issuer as fairly, completely,

and accurately presenting the financial condition of the

issuer, in all material respects, as of the dates indicated

therein.

(6) No commission or other remuneration is paid or

given directly or indirectly to any person or entity

(including, without limitation, any registered Internet

portal) for soliciting any person in this State, except to

registered dealers and registered salespersons licensed in

this State.

(7) Not less than 15 days before the earlier of the

first sale of securities made in reliance on the exemption

provided in this subsection T, or the use of any general

solicitation with respect thereto (other than a general

announcement made by or on behalf of), an issuer shall file

forms, materials, and fees as required by the Secretary of

State by rule.

The Secretary of State shall prescribe by rule the

amount of the fee for filing the notice required in

subparagraph (a), established pursuant to Section 11a of

this Act. The Secretary of State may impose, in such cases

as he or she may deem appropriate, a penalty for failure to

file any such notice in a timely manner, but no such

penalty shall exceed an amount equal to 5 times the filing

fee. The contents of any such notice or portion thereof may

be deemed confidential by the Secretary of State by rule or

order and if so deemed shall not be disclosed to the public

except by order of court or in court proceedings. The

failure to file any such notice does not affect the

availability of such exemption, but such failure to file

any such report constitutes a violation of subsection D of

Section 12 of this Act and is subject to the penalties and

remedies available in this Act and under the law.

(8) All payments for purchase of securities offered

pursuant to the exemption provided under this subsection T

are made directly to, and held by, the qualified escrowee

identified in the escrow agreement required pursuant to

subparagraph (c) of paragraph (4).

(9) The issuer includes each of the following in one or

more of the offering materials delivered to a prospective

purchaser, or to which a prospective purchaser has been

granted electronic access, in connection with the

offering:

(a) a description of the issuer, its type of

entity, the address, and telephone number of its

principal office;

(b) a reasonably detailed description of the

intended use of the offering proceeds, including any

amounts to be paid, as compensation or otherwise, to

any owner, executive officer, director, managing

member, or other person occupying a similar status or

performing similar functions on behalf of the issuer;

(c) the identity of all persons owning more than

10% of the voting capital securities of the issuer;

(d) the identity of the executive officers,

directors, managing members, and other persons

occupying a similar status or performing similar

functions in the name of and on behalf of the issuer,

including their titles and a reasonably detailed

description of their prior experience;

(e) the identity of any person or entity who has

been or will be retained by the issuer to assist the

issuer in conducting the offering and sale of the

securities (including all registered Internet portals

but excluding persons acting solely as accountants or

attorneys and employees whose primary job

responsibilities involve the operating business of the

issuer rather than assisting the issuer in raising

capital) and a description of the consideration being

paid to each such person or entity for such assistance;

(f) any additional information material to the

offering, including a description of significant

factors that make the offering speculative or risky for

the purchaser;

(g) the information required pursuant to

subparagraphs (a) and (b) of paragraph (4) of this

subsection T;

(h) such other information as the Secretary of

State may hereafter require by rule.

(10) The issuer (directly or through a registered

Internet portal) requires each purchaser to certify, in

writing or electronically, that the purchaser:

(a) is a resident of the State of Illinois;

(b) understands that he or she is investing in a

high-risk, highly speculative, business venture, that

he or she may lose all of his or her investment, and

that he or she can afford such a loss of his or her

investment;

(c) understands that the securities being offered

are highly illiquid, that there is no ready market for

the sale of such securities, that it may be difficult

or impossible for purchaser to sell or otherwise

dispose of such securities, and (where applicable)

that purchaser may be required to hold the securities

for an indefinite period of time; and

(d) understands that purchaser may be subject to

the payment of certain taxes with respect to the

securities being purchased whether or not purchaser

has sold, or otherwise disposed of, such securities or

whether purchaser has received any distributions or

other amounts from the issuer.

(11) The issuer (directly or through a registered

Internet portal) obtains from each purchaser of a security

offered under this subsection T evidence that the purchaser

is a resident of this State and, if applicable, is an

accredited investor. Without limiting the generality of

the foregoing, and not to the exclusion of other reasonable

methods which may be used by the issuer in connection with

the foregoing, an issuer may rely.

(12) The issuer (and to the extent a registered

Internet portal is used, such registered Internet portal)

maintains records of all offers and sales of securities

made pursuant to the exemption granted by this subsection T

and provides ready access to such records to the Secretary

of State, upon notice from the Secretary of State.

(13) The issuer is not, either before or as a result of

the offering:

(a) an investment company, as defined in Section 3

of the Investment Company Act of 1940 (15 U.S.C.

80a-3), as amended and in effect (unless the issuer

qualifies for exclusion from such definition pursuant

to one or more of the exceptions provided in Section

3(c) of the Investment Company Act of 1940, any other

provision of the Investment Company Act of 1940, or any

administrative rule or regulation promulgated with

respect to the Investment Company Act of 1940 or in

connection therewith); or

(b) subject to the reporting requirements of

Section 13 or 15(d) of the Securities Exchange Act of

1934 (15 U.S.C. 78m or 15 U.S.C. 78o(d).

(14) Neither the issuer, nor any person affiliated with

the issuer (either before or as a result of the offering),

nor the offering itself, nor the registered Internet portal

(to the extent used) is subject to disqualification

established by the Secretary of State by rule or contained

in the Securities Act of 1933 (15 U.S.C. 77c(a)(11)) and

Rule 147 adopted under the Securities Act of 1933 (17 CFR

230.147), unless both of the following are met:

(a) on a showing of good cause and without

prejudice to any other action by the Secretary of

State, the Secretary of State determines that it is not

necessary under the circumstances that an exemption is

denied; and

(b) the issuer establishes that it made a factual

inquiry into whether any disqualification existed

under this paragraph (14), but did not know, and in the

exercise of reasonable care could not have known, that

a disqualification existed under this paragraph (14);

the nature and scope of the requisite inquiry will vary

based on the circumstances of the issuer and the other

offering participants.

(Source: P.A. 90-70, eff. 7-8-97; 91-809, eff. 1-1-01.)

(815 ILCS 5/8) (from Ch. 121 1/2, par. 137.8)

Sec. 8. Registration of dealers, limited Canadian dealers,

internet portals, salespersons, investment advisers, and

investment adviser representatives.

A. Except as otherwise provided in this subsection A, every

dealer, limited Canadian dealer, salesperson, investment

adviser, and investment adviser representative shall be

registered as such with the Secretary of State. No dealer or

salesperson need be registered as such when offering or selling

securities in transactions exempted by subsection A, B, C, D,

E, G, H, I, J, K, M, O, P, Q, R or S of Section 4 of this Act,

provided that such dealer or salesperson is not regularly

engaged in the business of offering or selling securities in

reliance upon the exemption set forth in subsection G or M of

Section 4 of this Act. No dealer, issuer or controlling person

shall employ a salesperson unless such salesperson is

registered as such with the Secretary of State or is employed

for the purpose of offering or selling securities solely in

transactions exempted by subsection A, B, C, D, E, G, H, I, J,

K, L, M, O, P, Q, R or S of Section 4 of this Act; provided that

such salesperson need not be registered when effecting

transactions in this State limited to those transactions

described in Section 15(h)(2) of the Federal 1934 Act or

engaging in the offer or sale of securities in respect of which

he or she has beneficial ownership and is a controlling person.

The Secretary of State may, by rule, regulation or order and

subject to such terms, conditions, and fees as may be

prescribed in such rule, regulation or order, exempt from the

registration requirements of this Section 8 any investment

adviser, if the Secretary of State shall find that such

registration is not necessary in the public interest by reason

of the small number of clients or otherwise limited character

of operation of such investment adviser.

B. An application for registration as a dealer or limited

Canadian dealer, executed, verified, or authenticated by or on

behalf of the applicant, shall be filed with the Secretary of

State, in such form as the Secretary of State may by rule,

regulation or order prescribe, setting forth or accompanied by:

(1) The name and address of the applicant, the location

of its principal business office and all branch offices, if

any, and the date of its organization;

(2) A statement of any other Federal or state licenses

or registrations which have been granted the applicant and

whether any such licenses or registrations have ever been

refused, cancelled, suspended, revoked or withdrawn;

(3) The assets and all liabilities, including

contingent liabilities of the applicant, as of a date not

more than 60 days prior to the filing of the application;

(4) (a) A brief description of any civil or criminal

proceeding of which fraud is an essential element pending

against the applicant and whether the applicant has ever

been convicted of a felony, or of any misdemeanor of which

fraud is an essential element;

(b) A list setting forth the name, residence and

business address and a 10 year occupational statement of

each principal of the applicant and a statement describing

briefly any civil or criminal proceedings of which fraud is

an essential element pending against any such principal and

the facts concerning any conviction of any such principal

of a felony, or of any misdemeanor of which fraud is an

essential element;

(5) If the applicant is a corporation: a list of its

officers and directors setting forth the residence and

business address of each; a 10-year occupational statement

of each such officer or director; and a statement

describing briefly any civil or criminal proceedings of

which fraud is an essential element pending against each

such officer or director and the facts concerning any

conviction of any officer or director of a felony, or of

any misdemeanor of which fraud is an essential element;

(6) If the applicant is a sole proprietorship, a

partnership, limited liability company, an unincorporated

association or any similar form of business organization:

the name, residence and business address of the proprietor

or of each partner, member, officer, director, trustee or

manager; the limitations, if any, of the liability of each

such individual; a 10-year occupational statement of each

such individual; a statement describing briefly any civil

or criminal proceedings of which fraud is an essential

element pending against each such individual and the facts

concerning any conviction of any such individual of a

felony, or of any misdemeanor of which fraud is an

essential element;

(7) Such additional information as the Secretary of

State may by rule or regulation prescribe as necessary to

determine the applicant's financial responsibility,

business repute and qualification to act as a dealer.

(8) (a) No applicant shall be registered or

re-registered as a dealer or limited Canadian dealer under

this Section unless and until each principal of the dealer

has passed an examination conducted by the Secretary of

State or a self-regulatory organization of securities

dealers or similar person, which examination has been

designated by the Secretary of State by rule, regulation or

order to be satisfactory for purposes of determining

whether the applicant has sufficient knowledge of the

securities business and laws relating thereto to act as a

registered dealer. Any dealer who was registered on

September 30, 1963, and has continued to be so registered;

and any principal of any registered dealer, who was acting

in such capacity on and continuously since September 30,

1963; and any individual who has previously passed a

securities dealer examination administered by the

Secretary of State or any examination designated by the

Secretary of State to be satisfactory for purposes of

determining whether the applicant has sufficient knowledge

of the securities business and laws relating thereto to act

as a registered dealer by rule, regulation or order, shall

not be required to pass an examination in order to continue

to act in such capacity. The Secretary of State may by

order waive the examination requirement for any principal

of an applicant for registration under this subsection B

who has had such experience or education relating to the

securities business as may be determined by the Secretary

of State to be the equivalent of such examination. Any

request for such a waiver shall be filed with the Secretary

of State in such form as may be prescribed by rule or

regulation.

(b) Unless an applicant 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, a member of an

association of dealers registered as a national securities

association pursuant to Section 15A of the Federal 1934

Act, or a member of a self-regulatory organization or stock

exchange in Canada which the Secretary of State has

designated by rule or order, an applicant shall not be

registered or re-registered unless and until there is filed

with the Secretary of State evidence that such applicant

has in effect insurance or other equivalent protection for

each client's cash or securities held by such applicant,

and an undertaking that such applicant will continually

maintain such insurance or other protection during the

period of registration or re-registration. Such insurance

or other protection shall be in a form and amount

reasonably prescribed by the Secretary of State by rule or

regulation.

(9) The application for the registration of a dealer or

limited Canadian dealer shall be accompanied by a filing

fee and a fee for each branch office in this State, in each

case in the amount established pursuant to Section 11a of

this Act, which fees shall not be returnable in any event.

(10) The Secretary of State shall notify the dealer or

limited Canadian dealer by written notice (which may be by

electronic or facsimile transmission) of the effectiveness

of the registration as a dealer in this State.

(11) Any change which renders no longer accurate any

information contained in any application for registration

or re-registration of a dealer or limited Canadian dealer

shall be reported to the Secretary of State within 10

business days after the occurrence of such change; but in

respect to assets and liabilities only materially adverse

changes need be reported.

C. Any registered dealer, limited Canadian dealer, issuer,

or controlling person desiring to register a salesperson shall

file an application with the Secretary of State, in such form

as the Secretary of State may by rule or regulation prescribe,

which the salesperson is required by this Section to provide to

the dealer, issuer, or controlling person, executed, verified,

or authenticated by the salesperson setting forth or

accompanied by:

(1) the name, residence and business address of the

salesperson;

(2) whether any federal or State license or

registration as dealer, limited Canadian dealer, or

salesperson has ever been refused the salesperson or

cancelled, suspended, revoked, withdrawn, barred, limited,

or otherwise adversely affected in a similar manner or

whether the salesperson has ever been censured or expelled;

(3) the nature of employment with, and names and

addresses of, employers of the salesperson for the 10 years

immediately preceding the date of application;

(4) a brief description of any civil or criminal

proceedings of which fraud is an essential element pending

against the salesperson, and whether the salesperson has

ever been convicted of a felony, or of any misdemeanor of

which fraud is an essential element;

(5) such additional information as the Secretary of

State may by rule, regulation or order prescribe as

necessary to determine the salesperson's business repute

and qualification to act as a salesperson; and

(6) no individual shall be registered or re-registered

as a salesperson under this Section unless and until such

individual has passed an examination conducted by the

Secretary of State or a self-regulatory organization of

securities dealers or similar person, which examination

has been designated by the Secretary of State by rule,

regulation or order to be satisfactory for purposes of

determining whether the applicant has sufficient knowledge

of the securities business and laws relating thereto to act

as a registered salesperson.

Any salesperson who was registered prior to September

30, 1963, and has continued to be so registered, and any

individual who has passed a securities salesperson

examination administered by the Secretary of State or an

examination designated by the Secretary of State by rule,

regulation or order to be satisfactory for purposes of

determining whether the applicant has sufficient knowledge

of the securities business and laws relating thereto to act

as a registered salesperson, shall not be required to pass

an examination in order to continue to act as a

salesperson. The Secretary of State may by order waive the

examination requirement for any applicant for registration

under this subsection C who has had such experience or

education relating to the securities business as may be

determined by the Secretary of State to be the equivalent

of such examination. Any request for such a waiver shall be

filed with the Secretary of State in such form as may be

prescribed by rule, regulation or order.

(7) The application for registration of a salesperson

shall be accompanied by a filing fee and a Securities Audit

and Enforcement Fund fee, each in the amount established

pursuant to Section 11a of this Act, which shall not be

returnable in any event.

(8) Any change which renders no longer accurate any

information contained in any application for registration

or re-registration as a salesperson shall be reported to

the Secretary of State within 10 business days after the

occurrence of such change. If the activities are terminated

which rendered an individual a salesperson for the dealer,

issuer or controlling person, the dealer, issuer or

controlling person, as the case may be, shall notify the

Secretary of State, in writing, within 30 days of the

salesperson's cessation of activities, using the

appropriate termination notice form.

(9) A registered salesperson may transfer his or her

registration under this Section 8 for the unexpired term

thereof from one registered dealer or limited Canadian

dealer to another by the giving of notice of the transfer

by the new registered dealer or limited Canadian dealer to

the Secretary of State in such form and subject to such

conditions as the Secretary of State shall by rule or

regulation prescribe. The new registered dealer or limited

Canadian dealer shall promptly file an application for

registration of such salesperson as provided in this

subsection C, accompanied by the filing fee prescribed by

paragraph (7) of this subsection C.

C-5. Except with respect to federal covered investment

advisers whose only clients are investment companies as defined

in the Federal 1940 Act, other investment advisers, federal

covered investment advisers, or any similar person which the

Secretary of State may prescribe by rule or order, a federal

covered investment adviser shall file with the Secretary of

State, prior to acting as a federal covered investment adviser

in this State, such documents as have been filed with the

Securities and Exchange Commission as the Secretary of State by

rule or order may prescribe. The notification of a federal

covered investment adviser shall be accompanied by a

notification filing fee established pursuant to Section 11a of

this Act, which shall not be returnable in any event. Every

person acting as a federal covered investment adviser in this

State shall file a notification filing and pay an annual

notification filing fee established pursuant to Section 11a of

this Act, which is not returnable in any event. The failure to

file any such notification shall constitute a violation of

subsection D of Section 12 of this Act, subject to the

penalties enumerated in Section 14 of this Act. Until October

10, 1999 or other date as may be legally permissible, a federal

covered investment adviser who fails to file the notification

or refuses to pay the fees as required by this subsection shall

register as an investment adviser with the Secretary of State

under Section 8 of this Act. The civil remedies provided for in

subsection A of Section 13 of this Act and the civil remedies

of rescission and appointment of receiver, conservator,

ancillary receiver, or ancillary conservator provided for in

subsection F of Section 13 of this Act shall not be available

against any person by reason of the failure to file any such

notification or to pay the notification fee or on account of

the contents of any such notification.

D. An application for registration as an investment

adviser, executed, verified, or authenticated by or on behalf

of the applicant, shall be filed with the Secretary of State,

in such form as the Secretary of State may by rule or

regulation prescribe, setting forth or accompanied by:

(1) The name and form of organization under which the

investment adviser engages or intends to engage in

business; the state or country and date of its

organization; the location of the adviser's principal

business office and branch offices, if any; the names and

addresses of the adviser's principal, partners, officers,

directors, and persons performing similar functions or, if

the investment adviser is an individual, of the individual;

and the number of the adviser's employees who perform

investment advisory functions;

(2) The education, the business affiliations for the

past 10 years, and the present business affiliations of the

investment adviser and of the adviser's principal,

partners, officers, directors, and persons performing

similar functions and of any person controlling the

investment adviser;

(3) The nature of the business of the investment

adviser, including the manner of giving advice and

rendering analyses or reports;

(4) The nature and scope of the authority of the

investment adviser with respect to clients' funds and

accounts;

(5) The basis or bases upon which the investment

adviser is compensated;

(6) Whether the investment adviser or any principal,

partner, officer, director, person performing similar

functions or person controlling the investment adviser (i)

within 10 years of the filing of the application has been

convicted of a felony, or of any misdemeanor of which fraud

is an essential element, or (ii) is permanently or

temporarily enjoined by order or judgment from acting as an

investment adviser, underwriter, dealer, principal or

salesperson, or from engaging in or continuing any conduct

or practice in connection with any such activity or in

connection with the purchase or sale of any security, and

in each case the facts relating to the conviction, order or

judgment;

(7) (a) A statement as to whether the investment

adviser is engaged or is to engage primarily in the

business of rendering investment supervisory services; and

(b) A statement that the investment adviser will

furnish his, her, or its clients with such information as

the Secretary of State deems necessary in the form

prescribed by the Secretary of State by rule or regulation;

(8) Such additional information as the Secretary of

State may, by rule, regulation or order prescribe as

necessary to determine the applicant's financial

responsibility, business repute and qualification to act

as an investment adviser.

(9) No applicant shall be registered or re-registered

as an investment adviser under this Section unless and

until each principal of the applicant who is actively

engaged in the conduct and management of the applicant's

advisory business in this State has passed an examination

or completed an educational program conducted by the

Secretary of State or an association of investment advisers

or similar person, which examination or educational

program has been designated by the Secretary of State by

rule, regulation or order to be satisfactory for purposes

of determining whether the applicant has sufficient

knowledge of the securities business and laws relating

thereto to conduct the business of a registered investment

adviser.

Any person who was a registered investment adviser

prior to September 30, 1963, and has continued to be so

registered, and any individual who has passed an investment

adviser examination administered by the Secretary of

State, or passed an examination or completed an educational

program designated by the Secretary of State by rule,

regulation or order to be satisfactory for purposes of

determining whether the applicant has sufficient knowledge

of the securities business and laws relating thereto to

conduct the business of a registered investment adviser,

shall not be required to pass an examination or complete an

educational program in order to continue to act as an

investment adviser. The Secretary of State may by order

waive the examination or educational program requirement

for any applicant for registration under this subsection D

if the principal of the applicant who is actively engaged

in the conduct and management of the applicant's advisory

business in this State has had such experience or education

relating to the securities business as may be determined by

the Secretary of State to be the equivalent of the

examination or educational program. Any request for a

waiver shall be filed with the Secretary of State in such

form as may be prescribed by rule or regulation.

(10) No applicant shall be registered or re-registered

as an investment adviser under this Section 8 unless the

application for registration or re-registration is

accompanied by an application for registration or

re-registration for each person acting as an investment

adviser representative on behalf of the adviser and a

Securities Audit and Enforcement Fund fee that shall not be

returnable in any event is paid with respect to each

investment adviser representative.

(11) The application for registration of an investment

adviser shall be accompanied by a filing fee and a fee for

each branch office in this State, in each case in the

amount established pursuant to Section 11a of this Act,

which fees shall not be returnable in any event.

(12) The Secretary of State shall notify the investment

adviser by written notice (which may be by electronic or

facsimile transmission) of the effectiveness of the

registration as an investment adviser in this State.

(13) Any change which renders no longer accurate any

information contained in any application for registration

or re-registration of an investment adviser shall be

reported to the Secretary of State within 10 business days

after the occurrence of the change. In respect to assets

and liabilities of an investment adviser that retains

custody of clients' cash or securities or accepts

pre-payment of fees in excess of $500 per client and 6 or

more months in advance only materially adverse changes need

be reported by written notice (which may be by electronic

or facsimile transmission) no later than the close of

business on the second business day following the discovery

thereof.

(14) Each application for registration as an

investment adviser shall become effective automatically on

the 45th day following the filing of the application,

required documents or information, and payment of the

required fee unless (i) the Secretary of State has

registered the investment adviser prior to that date or

(ii) an action with respect to the applicant is pending

under Section 11 of this Act.

D-5. A registered investment adviser or federal covered

investment adviser desiring to register an investment adviser

representative shall file an application with the Secretary of

State, in the form as the Secretary of State may by rule or

order prescribe, which the investment adviser representative

is required by this Section to provide to the investment

adviser, executed, verified, or authenticated by the

investment adviser representative and setting forth or

accompanied by:

(1) The name, residence, and business address of the

investment adviser representative;

(2) A statement whether any federal or state license or

registration as a dealer, salesperson, investment adviser,

or investment adviser representative has ever been

refused, canceled, suspended, revoked or withdrawn;

(3) The nature of employment with, and names and

addresses of, employers of the investment adviser

representative for the 10 years immediately preceding the

date of application;

(4) A brief description of any civil or criminal

proceedings, of which fraud is an essential element,

pending against the investment adviser representative and

whether the investment adviser representative has ever

been convicted of a felony or of any misdemeanor of which

fraud is an essential element;

(5) Such additional information as the Secretary of

State may by rule or order prescribe as necessary to

determine the investment adviser representative's business

repute or qualification to act as an investment adviser

representative;

(6) Documentation that the individual has passed an

examination conducted by the Secretary of State, an

organization of investment advisers, or similar person,

which examination has been designated by the Secretary of

State by rule or order to be satisfactory for purposes of

determining whether the applicant has sufficient knowledge

of the investment advisory or securities business and laws

relating to that business to act as a registered investment

adviser representative; and

(7) A Securities Audit and Enforcement Fund fee

established under Section 11a of this Act, which shall not

be returnable in any event.

The Secretary of State may by order waive the examination

requirement for an applicant for registration under this

subsection D-5 who has had the experience or education relating

to the investment advisory or securities business as may be

determined by the Secretary of State to be the equivalent of

the examination. A request for a waiver shall be filed with the

Secretary of State in the form as may be prescribed by rule or

order.

A change that renders no longer accurate any information

contained in any application for registration or

re-registration as an investment adviser representative must

be reported to the Secretary of State within 10 business days

after the occurrence of the change. If the activities that

rendered an individual an investment adviser representative

for the investment adviser are terminated, the investment

adviser shall notify the Secretary of State in writing (which

may be by electronic or facsimile transmission), within 30 days

of the investment adviser representative's termination, using

the appropriate termination notice form as the Secretary of

State may prescribe by rule or order.

A registered investment adviser representative may

transfer his or her registration under this Section 8 for the

unexpired term of the registration from one registered

investment adviser to another by the giving of notice of the

transfer by the new investment adviser to the Secretary of

State in the form and subject to the conditions as the

Secretary of State shall prescribe. The new registered

investment adviser shall promptly file an application for

registration of the investment adviser representative as

provided in this subsection, accompanied by the Securities

Audit and Enforcement Fund fee prescribed by paragraph (7) of

this subsection D-5.

E. (1) Subject to the provisions of subsection F of Section

11 of this Act, the registration of a dealer, limited Canadian

dealer, salesperson, investment adviser, or investment adviser

representative may be denied, suspended or revoked if the

Secretary of State finds that the dealer, limited Canadian

dealer, internet portal, salesperson, investment adviser, or

investment adviser representative or any principal officer,

director, partner, member, trustee, manager or any person who

performs a similar function of the dealer, limited Canadian

dealer, internet portal, or investment adviser:

(a) has been convicted of any felony during the 10 year

period preceding the date of filing of any application for

registration or at any time thereafter, or of any

misdemeanor of which fraud is an essential element;

(b) has engaged in any unethical practice in connection

with any security, or in any fraudulent business practice;

(c) has failed to account for any money or property, or

has failed to deliver any security, to any person entitled

thereto when due or within a reasonable time thereafter;

(d) in the case of a dealer, limited Canadian dealer,

or investment adviser, is insolvent;

(e) in the case of a dealer, limited Canadian dealer,

salesperson, or registered principal of a dealer or limited

Canadian dealer (i) has failed reasonably to supervise the

securities activities of any of its salespersons or other

employees and the failure has permitted or facilitated a

violation of Section 12 of this Act or (ii) is offering or

selling or has offered or sold securities in this State

through a salesperson other than a registered salesperson,

or, in the case of a salesperson, is selling or has sold

securities in this State for a dealer, limited Canadian

dealer, issuer or controlling person with knowledge that

the dealer, limited Canadian dealer, issuer or controlling

person has not complied with the provisions of this Act or

(iii) has failed reasonably to supervise the

implementation of compliance measures following notice by

the Secretary of State of noncompliance with the Act or

with the regulations promulgated thereunder or both or (iv)

has failed to maintain and enforce written procedures to

supervise the types of business in which it engages and to

supervise the activities of its salespersons that are

reasonably designed to achieve compliance with applicable

securities laws and regulations;

(f) in the case of an investment adviser, has failed

reasonably to supervise the advisory activities of any of

its investment adviser representatives or employees and

the failure has permitted or facilitated a violation of

Section 12 of this Act;

(g) has violated any of the provisions of this Act;

(h) has made any material misrepresentation to the

Secretary of State in connection with any information

deemed necessary by the Secretary of State to determine a

dealer's, limited Canadian dealer's, or investment

adviser's financial responsibility or a dealer's, limited

Canadian dealer's, investment adviser's, salesperson's, or

investment adviser representative's business repute or

qualifications, or has refused to furnish any such

information requested by the Secretary of State;

(i) has had a license or registration under any Federal

or State law regulating securities, commodity futures

contracts, or stock futures contracts refused, cancelled,

suspended, withdrawn, revoked, or otherwise adversely

affected in a similar manner;

(j) has had membership in or association with any

self-regulatory organization registered under the Federal

1934 Act or the Federal 1974 Act suspended, revoked,

refused, expelled, cancelled, barred, limited in any

capacity, or otherwise adversely affected in a similar

manner arising from any fraudulent or deceptive act or a

practice in violation of any rule, regulation or standard

duly promulgated by the self-regulatory organization;

(k) has had any order entered against it after notice

and opportunity for hearing by a securities agency of any

state, any foreign government or agency thereof, the

Securities and Exchange Commission, or the Federal

Commodities Futures Trading Commission arising from any

fraudulent or deceptive act or a practice in violation of

any statute, rule or regulation administered or

promulgated by the agency or commission;

(l) in the case of a dealer or limited Canadian dealer,

fails to maintain a minimum net capital in an amount which

the Secretary of State may by rule or regulation require;

(m) has conducted a continuing course of dealing of

such nature as to demonstrate an inability to properly

conduct the business of the dealer, limited Canadian

dealer, salesperson, investment adviser, or investment

adviser representative;

(n) has had, after notice and opportunity for hearing,

any injunction or order entered against it or license or

registration refused, cancelled, suspended, revoked,

withdrawn, limited, or otherwise adversely affected in a

similar manner by any state or federal body, agency or

commission regulating banking, insurance, finance or small

loan companies, real estate or mortgage brokers or

companies, if the action resulted from any act found by the

body, agency or commission to be a fraudulent or deceptive

act or practice in violation of any statute, rule or

regulation administered or promulgated by the body, agency

or commission;

(o) has failed to file a return, or to pay the tax,

penalty or interest shown in a filed return, or to pay any

final assessment of tax, penalty or interest, as required

by any tax Act administered by the Illinois Department of

Revenue, until such time as the requirements of that tax

Act are satisfied;

(p) in the case of a natural person who is a dealer,

limited Canadian dealer, salesperson, investment adviser,

or investment adviser representative, has defaulted on an

educational loan guaranteed by the Illinois Student

Assistance Commission, until the natural person has

established a satisfactory repayment record as determined

by the Illinois Student Assistance Commission;

(q) has failed to maintain the books and records

required under this Act or rules or regulations promulgated

under this Act or under any requirements established by the

Securities and Exchange Commission or a self-regulatory

organization;

(r) has refused to allow or otherwise impeded designees

of the Secretary of State from conducting an audit,

examination, inspection, or investigation provided for

under Section 8 or 11 of this Act;

(s) has failed to maintain any minimum net capital or

bond requirement set forth in this Act or any rule or

regulation promulgated under this Act;

(t) has refused the Secretary of State or his or her

designee access to any office or location within an office

to conduct an investigation, audit, examination, or

inspection;

(u) has advised or caused a public pension fund or

retirement system established under the Illinois Pension

Code to make an investment or engage in a transaction not

authorized by that Code;

(v) if a corporation, limited liability company, or

limited liability partnership has been suspended,

canceled, revoked, or has failed to register as a foreign

corporation, limited liability company, or limited

liability partnership with the Secretary of State;

(w) is permanently or temporarily enjoined by any court

of competent jurisdiction, including any state, federal,

or foreign government, from engaging in or continuing any

conduct or practice involving any aspect of the securities

or commodities business or in any other business where the

conduct or practice enjoined involved investments,

franchises, insurance, banking, or finance;

(2) If the Secretary of State finds that any registrant or

applicant for registration is no longer in existence or has

ceased to do business as a dealer, limited Canadian dealer,

internet portal, salesperson, investment adviser, or

investment adviser representative, or is subject to an

adjudication as a person under legal disability or to the

control of a guardian, or cannot be located after reasonable

search, or has failed after written notice to pay to the

Secretary of State any additional fee prescribed by this

Section or specified by rule or regulation, or if a natural

person, has defaulted on an educational loan guaranteed by the

Illinois Student Assistance Commission, the Secretary of State

may by order cancel the registration or application.

(3) Withdrawal of an application for registration or

withdrawal from registration as a dealer, limited Canadian

dealer, salesperson, investment adviser, or investment adviser

representative becomes effective 30 days after receipt of an

application to withdraw or within such shorter period of time

as the Secretary of State may determine, unless any proceeding

is pending under Section 11 of this Act when the application is

filed or a proceeding is instituted within 30 days after the

application is filed. If a proceeding is pending or instituted,

withdrawal becomes effective at such time and upon such

conditions as the Secretary of State by order determines. If no

proceeding is pending or instituted and withdrawal

automatically becomes effective, the Secretary of State may

nevertheless institute a revocation or suspension proceeding

within 2 years after withdrawal became effective and enter a

revocation or suspension order as of the last date on which

registration was effective.

F. The Secretary of State shall make available upon request

the date that each dealer, investment adviser, salesperson, or

investment adviser representative was granted registration,

together with the name and address of the dealer, limited

Canadian dealer, or issuer on whose behalf the salesperson is

registered, and all orders of the Secretary of State denying or

abandoning an application, or suspending or revoking

registration, or censuring the persons. The Secretary of State

may designate by rule, regulation or order the statements,

information or reports submitted to or filed with him or her

pursuant to this Section 8 which the Secretary of State

determines are of a sensitive nature and therefore should be

exempt from public disclosure. Any such statement, information

or report shall be deemed confidential and shall not be

disclosed to the public except upon the consent of the person

filing or submitting the statement, information or report or by

order of court or in court proceedings.

G. The registration or re-registration of a dealer or

limited Canadian dealer and of all salespersons registered upon

application of the dealer or limited Canadian dealer shall

expire on the next succeeding anniversary date of the

registration or re-registration of the dealer; and the

registration or re-registration of an investment adviser and of

all investment adviser representatives registered upon

application of the investment adviser shall expire on the next

succeeding anniversary date of the registration of the

investment adviser; provided, that the Secretary of State may

by rule or regulation prescribe an alternate date which any

dealer registered under the Federal 1934 Act or a member of any

self-regulatory association approved pursuant thereto, a

member of a self-regulatory organization or stock exchange in

Canada, or any investment adviser may elect as the expiration

date of its dealer or limited Canadian dealer and salesperson

registrations, or the expiration date of its investment adviser

registration, as the case may be. A registration of a

salesperson registered upon application of an issuer or

controlling person shall expire on the next succeeding

anniversary date of the registration, or upon termination or

expiration of the registration of the securities, if any,

designated in the application for his or her registration or

the alternative date as the Secretary may prescribe by rule or

regulation. Subject to paragraph (9) of subsection C of this

Section 8, a salesperson's registration also shall terminate

upon cessation of his or her employment, or termination of his

or her appointment or authorization, in each case by the person

who applied for the salesperson's registration, provided that

the Secretary of State may by rule or regulation prescribe an

alternate date for the expiration of the registration.

H. Applications for re-registration of dealers, limited

Canadian dealers, internet portals, salespersons, investment

advisers, and investment adviser representatives shall be

filed with the Secretary of State prior to the expiration of

the then current registration and shall contain such

information as may be required by the Secretary of State upon

initial application with such omission therefrom or addition

thereto as the Secretary of State may authorize or prescribe.

Each application for re-registration of a dealer, limited

Canadian dealer, internet portal, or investment adviser shall

be accompanied by a filing fee, each application for

re-registration as a salesperson shall be accompanied by a

filing fee and a Securities Audit and Enforcement Fund fee

established pursuant to Section 11a of this Act, and each

application for re-registration as an investment adviser

representative shall be accompanied by a Securities Audit and

Enforcement Fund fee established under Section 11a of this Act,

which shall not be returnable in any event. Notwithstanding the

foregoing, applications for re-registration of dealers,

limited Canadian dealers, internet portals, and investment

advisers may be filed within 30 days following the expiration

of the registration provided that the applicant pays the annual

registration fee together with an additional amount equal to

the annual registration fee and files any other information or

documents that the Secretary of State may prescribe by rule or

regulation or order. Any application filed within 30 days

following the expiration of the registration shall be

automatically effective as of the time of the earlier

expiration provided that the proper fee has been paid to the

Secretary of State.

Each registered dealer, limited Canadian dealer, internet

portal, or investment adviser shall continue to be registered

if the registrant changes his, her, or its form of organization

provided that the dealer or investment adviser files an

amendment to his, her, or its application not later than 30

days following the occurrence of the change and pays the

Secretary of State a fee in the amount established under

Section 11a of this Act.

I. (1) Every registered dealer, limited Canadian dealer,

internet portal, and investment adviser shall make and keep for

such periods, such accounts, correspondence, memoranda,

papers, books and records as the Secretary of State may by rule

or regulation prescribe. All records so required shall be

preserved for 3 years unless the Secretary of State by rule,

regulation or order prescribes otherwise for particular types

of records.

(2) Every registered dealer, limited Canadian dealer,

internet portal, and investment adviser shall file such

financial reports as the Secretary of State may by rule or

regulation prescribe.

(3) All the books and records referred to in paragraph (1)

of this subsection I are subject at any time or from time to

time to such reasonable periodic, special or other audits,

examinations, or inspections by representatives of the

Secretary of State, within or without this State, as the

Secretary of State deems necessary or appropriate in the public

interest or for the protection of investors.

(4) At the time of an audit, examination, or inspection,

the Secretary of State, by his or her designees, may conduct an

interview of any person employed or appointed by or affiliated

with a registered dealer, limited Canadian dealer, internet

portal, or investment advisor, provided that the dealer,

limited Canadian dealer, internet portal, or investment

advisor shall be given reasonable notice of the time and place

for the interview. At the option of the dealer, limited

Canadian dealer, internet portal, or investment advisor, a

representative of the dealer or investment advisor with

supervisory responsibility over the individual being

interviewed may be present at the interview.

J. The Secretary of State may require by rule or regulation

the payment of an additional fee for the filing of information

or documents required to be filed by this Section which have

not been filed in a timely manner. The Secretary of State may

also require by rule or regulation the payment of an

examination fee for administering any examination which it may

conduct pursuant to subsection B, C, D, or D-5 of this Section

8.

K. The Secretary of State may declare any application for

registration or limited registration under this Section 8

abandoned by order if the applicant fails to pay any fee or

file any information or document required under this Section 8

or by rule or regulation for more than 30 days after the

required payment or filing date. The applicant may petition the

Secretary of State for a hearing within 15 days after the

applicant's receipt of the order of abandonment, provided that

the petition sets forth the grounds upon which the applicant

seeks a hearing.

L. Any document being filed pursuant to this Section 8

shall be deemed filed, and any fee being paid pursuant to this

Section 8 shall be deemed paid, upon the date of actual receipt

thereof by the Secretary of State or his or her designee.

M. The Secretary of State shall provide to the Illinois

Student Assistance Commission annually or at mutually agreed

periodic intervals the names and social security numbers of

natural persons registered under subsections B, C, D, and D-5

of this Section. The Illinois Student Assistance Commission

shall determine if any student loan defaulter is registered as

a dealer, limited Canadian dealer, internet portal

salesperson, or investment adviser under this Act and report

its determination to the Secretary of State or his or her

designee.

(Source: P.A. 92-308, eff. 1-1-02; 93-580, eff. 8-21-03.)

(815 ILCS 5/8d new)

Sec. 8d. Offerings made through registered Internet

portals.

(a) An issuer shall make an offering or sale of securities

pursuant to subsection T of Section 4 of this Act through the

use of one or more registered Internet portals.

(b) The Internet portal:

(1) shall be a registered broker-dealer under the

Securities Exchange Act of 1934 (15 U.S.C. 78o);

(2) shall be a funding portal registered under the

Securities Act of 1933 (15 U.S.C. 77d-1) and the Securities

and Exchange Commission has adopted rules under authority

of Section 3(h) of the Securities Exchange Act of 1934 (15

U.S.C. 78c) and Section 304 of the Jumpstart Our Business

Startups Act (P.L. 112-106) governing funding portals;

(3) shall be a dealer registered under this Act as of

the date of any offer or sale of securities made through

the Internet portal; or

(4) shall, to the extent it meets the qualifications

for exemption from registration pursuant to subsection (d)

of this Section:

(A) file, not later than 30 days before the date of

the first offer or sale of securities made within this

State, an application for registration (or renewal of

registration, as applicable) as a registered Internet

portal with the Secretary of State, in writing or in

electronic form as prescribed by the Secretary of

State, which the Secretary of State shall make

available as an electronic document on the Secretary of

State's Internet website, containing such information

and required deliveries as specified therein; and

(B) pay the application filing fee established

under Section 11a of this Act; the Secretary of State

shall, within a reasonable time, examine the filed

application and other materials filed and, approve or

deny the application.

(c) If any change occurs in the information submitted by,

or on behalf of, an Internet portal to the Secretary of State,

the Internet portal shall notify the Secretary of State within

10 days after such change occurs and shall provide the

Secretary of State with such additional information (if any)

requested by the Secretary of State in connection therewith.

(d) Notwithstanding anything contained in this Act to the

contrary, neither an Internet portal nor its owning or

operating entity is required to register as a dealer or an

investment advisor under this Act if each of the following

applies with respect to the Internet portal and its owning or

operating entity:

(1) It does not solicit purchases, sales, or offers to

buy the securities offered or displayed on the Internet

portal.

(2) It does not collect or hold funds in connection

with any purchase, sale, or offer to buy any securities

offered or displayed on the Internet portal.

(3) It does not compensate employees, agents, or other

persons for the solicitation or based on the sale of

securities displayed or referenced on the Internet portal.

(4) It is not compensated based on the amount of

securities sold.

(5) The fee it charges an issuer for an offering of

securities on the Internet portal is a fixed amount for

each offering, a variable amount based on the length of

time that the securities are offered on the Internet

portal, a variable amount based on the total proposed

offering amount, or any combination of such fixed and

variable amounts.

(6) It does not offer investment advice or

recommendations; however, an Internet portal is not deemed

to be offering investment advice or recommendations simply

by virtue of:

(A) selecting transactions in which the Internet

portal shall serve as an intermediary;

(B) establishing reasonable selection criteria for

an issuer to meet in order to establish an offer or

sale of securities through the Internet portal;

(C) establishing reasonable selection criteria for

a potential purchaser to meet in order to participate

in an offer or sale of securities made through the

Internet portal; or

(D) terminating an issuer transaction at any time

before the first sale of the securities of such issuer

if the Internet portal determines such action is

appropriate, after reasonable due diligence, to

protect potential purchasers, and the Internet portal

is able to direct the qualified escrowee to return all

funds then provided by potential purchasers, if any.

(7) It does not engage in such other activities as the

Secretary of State, by rule, determines are prohibited.

(e) Upon completion of an offering made pursuant to

subsection T of Section 4, each registered Internet portal

involved with the transactions (and the issuer, to the extent

applicable) shall store any and all electronic materials

related to the completed offering (including copies of all

offering documents, all offering materials, and all purchaser

information) on a secure, non-public, server or in such other

manner as the Secretary of State may hereafter deem acceptable

by rule.

(815 ILCS 5/11) (from Ch. 121 1/2, par. 137.11)

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, internet portal, 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, internet portals, 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,

internet portal, 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, internet portal, 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, internet portal,

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, internet portal, 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, internet

portal, 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.

(Source: P.A. 92-308, eff. 1-1-02; 93-580, eff. 8-21-03.)

(815 ILCS 5/11a) (from Ch. 121 1/2, par. 137.11a)

Sec. 11a. Fees.

(1) The Secretary of State shall by rule or regulation

impose and shall collect reasonable fees necessary for the

administration of this Act including, but not limited to, fees

for the following purposes:

(a) filing an application pursuant to paragraph (2) of

subsection F of Section 4 of this Act;

(b) examining an application and report pursuant to

paragraph (2) of subsection F of Section 4 of this Act;

(c) filing a report pursuant to subsection G of Section

4 of this Act, determined in accordance with paragraph (4)

of subsection G of Section 4 of this Act;

(d) examining an offering sheet pursuant to subsection

P of Section 4 of this Act;

(e) filing a report pursuant to subsection P of Section

4, determined in accordance with subsection P of Section 4

of this Act;

(f) examining an application to register securities

under subsection B of Section 5 of this Act;

(g) examining an amended or supplemental prospectus

filed pursuant to the undertaking required by

sub-paragraph (i) of paragraph (2) of subsection B of

Section 5 of this Act;

(h) registering or renewing registration of securities

under Section 5, determined in accordance with subsection C

of Section 5 of this Act;

(i) registering securities in excess of the amount

initially registered, determined in accordance with

paragraph (2) of subsection C of Section 5 of this Act;

(j) failure to file timely an application for renewal

under subsection E of Section 5 of this Act;

(k) failure to file timely any document or information

required under Section 5 of this Act;

(l) examining an application to register face amount

certificate contracts under subsection B of Section 6 of

this Act;

(m) examining an amended or supplemental prospectus

filed pursuant to the undertaking required by

sub-paragraph (f) of paragraph (2) of subsection B of

Section 6 of this Act;

(n) registering or renewing registration of face

amount certificate contracts under Section 6 of this Act;

(o) amending a registration of face amount certificate

contracts pursuant to subsection E of Section 6 of this Act

to add any additional series, type or class of contract;

(p) failure to file timely an application for renewal

under subsection F of Section 6 of this Act;

(q) adding to or withdrawing from deposits with respect

to face amount certificate contracts pursuant to

subsection H of Section 6, a transaction charge payable at

the times and in the manner specified in subsection H of

Section 6 (which transaction charge shall be in addition to

the annual fee called for by subsection H of Section 6 of

this Act);

(r) failure to file timely any document or information

required under Section 6 of this Act;

(s) examining an application to register investment

fund shares under subsection B of Section 7 of this Act;

(t) examining an amended or supplemental prospectus

filed pursuant to the undertaking required by

sub-paragraph (f) of paragraph (2) of subsection B of

Section 7 of this Act;

(u) registering or renewing registration of investment

fund shares under Section 7 of this Act;

(v) amending a registration of investment fund shares

pursuant to subsection D of Section 7 of this Act to

register an additional class or classes of investment fund

shares;

(w) failure to file timely an application for renewal

under paragraph (l) of subsection G of Section 7 of this

Act;

(x) examining an application for renewal of

registration of investment fund shares under paragraph (2)

of subsection G of Section 7 of this Act;

(y) failure to file timely any document or information

required under Section 7 of this Act;

(z) filing an application for registration or

re-registration of a dealer or limited Canadian dealer

under Section 8 of this Act for each office in this State;

(aa) in connection with an application for the

registration or re-registration of a salesperson under

Section 8 of or this Act, for the following purposes:

(i) filing an application;

(ii) a Securities Audit and Enforcement Fund fee;

and

(iii) a notification filing of federal covered

investment advisers;

(bb) in connection with an application for the

registration or re-registration of an investment adviser

under Section 8 of this Act;

(cc) failure to file timely any document or information

required under Section 8 of this Act;

(dd) filing a consent to service of process under

Section 10 of this Act;

(ee) issuing a certificate pursuant to subsection B of

Section 15 of this Act;

(ff) issuing a certified copy pursuant to subsection C

of Section 15 of this Act;

(gg) issuing a non-binding statement pursuant to

Section 15a of this Act;

(hh) filings by Notification under Section 2a;

(ii) notification filing of federal Regulation D,

Section 506 offering under the Federal 1933 Act;

(jj) notification filing of securities and closed-end

investment company securities;

(kk) notification filing of face amount certificate

contracts;

(ll) notification filing of open-end investment

company securities;

(mm) filing a report pursuant to subsection D of

Section 4 of this Act;

(nn) in connection with the filing of an application

for registration or re-registration of an investment

adviser representative under subsection D of Section 8 of

this Act; .

(oo) filing a notice pursuant to paragraph (6) of

subsection T of Section 4 of this Act; and

(pp) applying for registration, or renewing

registration, as a registered Internet portal pursuant to

Section 8d of this Act.

(2) The Secretary of State may, by rule or regulation,

raise or lower any fee imposed by, and which he or she is

authorized by law to collect under, this Act.

(Source: P.A. 90-70, eff. 7-8-97; 91-357, eff. 7-29-99; revised

12-11-14.)

(815 ILCS 5/12) (from Ch. 121 1/2, par. 137.12)

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, internet portal, 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.

(Source: P.A. 93-580, eff. 8-21-03.)

(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, internet portal, 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, or internet portal 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.

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. 98-174, eff. 8-5-13.)

(815 ILCS 5/18.1)

Sec. 18.1. Additional fees. In addition to any other fee

that the Secretary of State may impose and collect pursuant to

the authority contained in Sections 4, 8, and 11a of this Act,

beginning on July 1, 2003 the Secretary of State shall also

collect the following additional fees:

Securities offered or sold under the Uniform Limited Offering Exemption Pursuant to Section 4.D of the Act............................ $100 Securities offered or sold under the Uniform Limited Offering Exemption pursuant to subsection T of Section 4 of this Act. $100 Registration and renewal of a dealer.............. $300 Registration and renewal of a registered Internet portal. $300 Registration and renewal of an investment adviser. $200 Federal covered investment adviser notification filing and annual notification filing............. $200 Registration and renewal of a salesperson......... $75 Registration and renewal of an investment adviser representative and a federal covered investment adviser representative................. $75

Investment fund shares notification filing and annual

notification filing: $800 plus $80 for each series, class, or

portfolio.

All fees collected by the Secretary of State pursuant to

this amendatory Act of the 93rd General Assembly shall be

deposited into the General Revenue Fund in the State treasury.

(Source: P.A. 93-32, eff. 7-1-03.)