Bill Text: IL SB3439 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Illinois Securities Law of 1953. Eliminates reference to face amount certificate contracts. Provides that, in addition to existing disciplinary penalties, the registrations of dealers and advisers may be limited or conditioned for failure to comply with statutory requirements. Provides that administrative actions may be brought by the Secretary of State within 3 years from the time the Secretary of State had notice of facts that, in the exercise of reasonable diligence would lead to actual knowledge of the violation. Removes provision barring administrative actions 5 years after the date on which the alleged violation occurred. Establishes protections against the financial exploitation of persons 60 years of age or older and persons subject to the Illinois Adult Protective Services Act. Requires certain licensees to report incidents of potential exploitation.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Failed) 2021-01-13 - Session Sine Die [SB3439 Detail]

Download: Illinois-2019-SB3439-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB3439 Introduced 2/13/2020, by Sen. Rachelle Crowe SYNOPSIS AS INTRODUCED:
815 ILCS 5/2.1 from Ch. 121 1/2, par. 137.2-1
815 ILCS 5/8 from Ch. 121 1/2, par. 137.8
815 ILCS 5/11 from Ch. 121 1/2, par. 137.11
815 ILCS 5/11.7 new
815 ILCS 5/12 from Ch. 121 1/2, par. 137.12
815 ILCS 5/12.5 new
815 ILCS 5/14 from Ch. 121 1/2, par. 137.14
815 ILCS 5/2.14 rep.
Amends the Illinois Securities Law of 1953. Eliminates reference to face amount certificate contracts. Provides that, in addition to existing disciplinary penalties, the registrations of dealers and advisers may be limited or conditioned for failure to comply with statutory requirements. Provides that administrative actions may be brought by the Secretary of State within 3 years from the time the Secretary of State had notice of facts that, in the exercise of reasonable diligence would lead to actual knowledge of the violation. Removes provision barring administrative actions 5 years after the date on which the alleged violation occurred. Establishes protections against the financial exploitation of persons 60 years of age or older and persons subject to the Illinois Adult Protective Services Act. Requires certain licensees to report incidents of potential exploitation.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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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 2.1, 8, 11, 12, and 14 and by adding
Sections 11.7 and 12.5 as follows:
(815 ILCS 5/2.1) (from Ch. 121 1/2, par. 137.2-1)
Sec. 2.1. Security. "Security" means any note, stock,
treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment
contract, viatical investment, investment fund share,
face-amount certificate, voting-trust certificate, certificate
of deposit for a security, fractional undivided interest in
oil, gas or other mineral lease, right or royalty, any put,
call, straddle, option, or privilege on any security,
certificate of deposit, or group or index of securities
(including any interest therein or based on the value thereof),
or any put, call, straddle, option, or privilege entered into,
relating to foreign currency, or, in general, any interest or
instrument commonly known as a "security", or any certificate
of interest or participation in, temporary or interim

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certificate for, receipt for, guarantee of, or warrant or right
to subscribe to or purchase, any of the foregoing. "Security"
does not mean a mineral investment contract or a mineral
deferred delivery contract; provided, however, the Department
shall have the authority to regulate these contracts as
hereinafter provided.
(Source: P.A. 96-736, eff. 7-1-10.)
(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

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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

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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

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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

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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

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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

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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

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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,

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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

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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

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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,

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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;

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(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

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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

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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

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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

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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

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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

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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, conditioned, limited,
or revoked if the Secretary of State finds that the dealer,

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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
investment advisory or 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,

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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 (1)
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 or (2) failed to maintain and
enforce written policies and procedures to supervise the
types of business in which it engages;
(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

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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,

SB3439 - 24 - LRB101 16542 JLS 65926 b
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) (blank);

SB3439 - 25 - LRB101 16542 JLS 65926 b
(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

SB3439 - 26 - LRB101 16542 JLS 65926 b
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, 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,

SB3439 - 27 - LRB101 16542 JLS 65926 b
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.

SB3439 - 28 - LRB101 16542 JLS 65926 b
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

SB3439 - 29 - LRB101 16542 JLS 65926 b
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,

SB3439 - 30 - LRB101 16542 JLS 65926 b
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)(a) 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

SB3439 - 31 - LRB101 16542 JLS 65926 b
rule, regulation or order prescribes otherwise for particular
types of records.
(b) Every registered dealer, limited Canadian dealer,
Internet portal, and investment adviser shall provide to the
Secretary of State, upon request, such accounts,
correspondence, memoranda, papers, books, and records as the
Secretary of State may by rule or regulation prescribe, that it
possesses and that it preserves for periods of longer than 3
years.
(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

SB3439 - 32 - LRB101 16542 JLS 65926 b
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.

SB3439 - 33 - LRB101 16542 JLS 65926 b
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. (Blank).
(Source: P.A. 100-872, eff. 8-14-18; 101-563, eff. 8-23-19.)
(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,

SB3439 - 34 - LRB101 16542 JLS 65926 b
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

SB3439 - 35 - LRB101 16542 JLS 65926 b
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,

SB3439 - 36 - LRB101 16542 JLS 65926 b
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

SB3439 - 37 - LRB101 16542 JLS 65926 b
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

SB3439 - 38 - LRB101 16542 JLS 65926 b
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

SB3439 - 39 - LRB101 16542 JLS 65926 b
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

SB3439 - 40 - LRB101 16542 JLS 65926 b
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

SB3439 - 41 - LRB101 16542 JLS 65926 b
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,

SB3439 - 42 - LRB101 16542 JLS 65926 b
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

SB3439 - 43 - LRB101 16542 JLS 65926 b
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

SB3439 - 44 - LRB101 16542 JLS 65926 b
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

SB3439 - 45 - LRB101 16542 JLS 65926 b
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

SB3439 - 46 - LRB101 16542 JLS 65926 b
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

SB3439 - 47 - LRB101 16542 JLS 65926 b
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

SB3439 - 48 - LRB101 16542 JLS 65926 b
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

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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 names and addresses of all other
persons known to have an interest in the property;
(vi) the specific provisions of this Act

SB3439 - 50 - LRB101 16542 JLS 65926 b
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

SB3439 - 51 - LRB101 16542 JLS 65926 b
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

SB3439 - 52 - LRB101 16542 JLS 65926 b
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.

SB3439 - 53 - LRB101 16542 JLS 65926 b
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,

SB3439 - 54 - LRB101 16542 JLS 65926 b
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

SB3439 - 55 - LRB101 16542 JLS 65926 b
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

SB3439 - 56 - LRB101 16542 JLS 65926 b
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

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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.
I-5. Property forfeited under this Section is subject to
reporting under the Seizure and Forfeiture Reporting Act.
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

SB3439 - 58 - LRB101 16542 JLS 65926 b
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.

SB3439 - 59 - LRB101 16542 JLS 65926 b
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 North American Securities
Administrators Association, 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. 99-182, eff. 1-1-16; 100-512, eff. 7-1-18;

SB3439 - 60 - LRB101 16542 JLS 65926 b
100-699, eff. 8-3-18.)
(815 ILCS 5/11.7 new)
Sec. 11.7. Vulnerable adult protection.
(a) As used in this Section:
"Eligible adult" means (1) a person 60 years of age or
older or (2) a person subject to the Adult Protective Services
Act.
"Financial exploitation" means (1) the wrongful or
unauthorized taking, withholding, appropriation, or use of
money, assets, or property of an eligible adult or (2) any act
or omission taken by a person, including through the use of a
power of attorney, guardianship, or conservatorship of an
eligible adult, to:
(A) obtain control, through deception, intimidation or
undue influence, over the eligible adult's money, assets,
or property to deprive the eligible adult of the ownership,
use, benefit, or possession of his or her money, assets, or
property; or
(B) convert money, assets, or property of the eligible
adult to deprive such eligible adult of the ownership, use,
benefit, or possession of his or her money, assets, or
property.
"Qualified individual" means any salesperson, investment
adviser, investment adviser representative, or person who
serves in a supervisory, compliance, legal, or investor

SB3439 - 61 - LRB101 16542 JLS 65926 b
protection capacity for a broker-dealer or investment adviser.
(b) Disclosures to governmental agency. If a qualified
individual reasonably believes that financial exploitation of
an eligible adult may have occurred, may have been attempted,
or is being attempted, the qualified individual shall notify a
governmental agency or agent thereof responsible for adult
protective services and the Illinois Securities Department
(collectively the "Agencies").
(c) Third-party disclosures. If a qualified individual
reasonably believes that financial exploitation of an eligible
adult may have occurred, may have been attempted, or is being
attempted, the qualified individual may notify any third party
that is reasonably associated with the eligible adult or
otherwise permitted by law. Disclosure may not be made to any
designated third party that is suspected of financial
exploitation or other abuse of the eligible adult.
(d) Delaying transactions or disbursements.
(1) A broker-dealer or investment adviser may delay a
transaction or disbursement from an account of an eligible
adult or an account on which an eligible adult is a
beneficiary if:
(A) the broker-dealer, investment adviser, or
qualified individual reasonably believes, after
initiating an internal review of the requested
transaction or disbursement, that the requested
transaction or disbursement may result in financial

SB3439 - 62 - LRB101 16542 JLS 65926 b
exploitation of an eligible adult; and
(B) the broker-dealer or investment adviser:
(i) immediately, but in no event more than 2
business days after the date on which the
broker-dealer or investment adviser first delayed
the transaction or disbursement of the funds,
provides written notification of the delay and the
reason for the delay to all parties authorized to
transact business on the account, unless any such
party is reasonably believed to have engaged in
suspected or attempted financial exploitation of
the eligible adult;
(ii) immediately, but in no event more than 2
business days after the date on which the
transaction or disbursement was first delayed,
notifies the Agencies; and
(iii) continues its internal review of the
suspected or attempted financial exploitation of
the eligible adult, as necessary, and provides
updates to the Agencies upon request.
(2) Any delay of a transaction or disbursement as
authorized by this Section shall expire upon the sooner of:
(A) a determination by the broker-dealer or
investment adviser that the transaction or
disbursement will not result in financial exploitation
of the eligible adult; or

SB3439 - 63 - LRB101 16542 JLS 65926 b
(B) fifteen business days after the date on which
the broker-dealer or investment adviser first delayed
the transaction or disbursement of the funds, unless
either of the Agencies requests that the broker-dealer
or investment adviser extend the delay, in which case
the delay shall expire no more than 25 business days
after the date on which the broker-dealer or investment
adviser first delayed the transaction or disbursement
of the funds, unless sooner terminated or further
extended by either of the Agencies or an order of a
court.
(e) Records. A broker-dealer or investment adviser shall
provide access to or copies of records that are relevant to the
suspected or attempted financial exploitation of an eligible
adult to Agencies charged with administering state adult
protective services laws and to law enforcement, either as part
of a referral to the Agencies or to law enforcement, or upon
request of the agency or law enforcement pursuant to an
investigation. The records may include historical records as
well as records relating to the most recent transaction or
transactions that may comprise financial exploitation of an
eligible adult. All records made available to the Agencies
under this Section shall not be considered a public record.
Nothing in this provision shall limit or otherwise impede the
authority of the Illinois Securities Department to access or
examine the books and records of broker-dealers and investment

SB3439 - 64 - LRB101 16542 JLS 65926 b
advisers as otherwise provided by law.
(f) Disclosure to reporting party. Notwithstanding any
provision of law to the contrary, the Agencies may disclose to
any notifying qualified person the general status or final
disposition of any investigation that arose from a report made
by the qualified person.
(g) Liability. The Secretary shall not bring any
administrative or civil action against a qualified individual,
broker-dealer, or investment adviser for delaying a
transaction or disbursement when acting in good faith and
exercising reasonable care in accordance with this Section.
(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.

SB3439 - 65 - LRB101 16542 JLS 65926 b
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 sworn
testimony before the Secretary of State or the Illinois
Securities Department within the Office of the Secretary,
or 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.

SB3439 - 66 - LRB101 16542 JLS 65926 b
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, or in the course of providing investment advice,
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

SB3439 - 67 - LRB101 16542 JLS 65926 b
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. 101-563, eff. 8-23-19.)
(815 ILCS 5/12.5 new)
Sec. 12.5. Non-public distribution of information.
Information and documents obtained or generated by employees of
the Secretary pursuant to the provisions of Section 11 shall,

SB3439 - 68 - LRB101 16542 JLS 65926 b
unless made a matter of public record, be deemed confidential.
Confidential information and documents or any other non-public
records of the Illinois Securities Department shall not be made
public unless the Secretary or his or her designee authorizes
the disclosure of the information or the production of the
documents as not being contrary to the public interest.
Notices, orders, settlement agreements, and evidence presented
in administrative hearings shall be considered public records.
The Illinois Securities Department administrative hearings
shall be open to the public.
(815 ILCS 5/14) (from Ch. 121 1/2, par. 137.14)
Sec. 14. Sentence.
A. Any person who violates any of the provisions of
subsection A, B, C, or D of Section 12 or paragraph (3) of
subsection K of Section 12 of this Act shall be guilty of a
Class 4 felony.
B. Any person who violates any of the provisions of
subsection E, F, G, H, I, or J, paragraph (1) or (2) of
subsection K, or subsection L of Section 12 of this Act shall
be guilty of a Class 3 felony.
B-5. A person who violates a provision of subsection E, F,
G, H, I, or J or paragraph (1) or (2) of subsection K of Section
12 of this Act by use of a plan, program, or campaign that is
conducted using one or more telephones for the purpose of
inducing the purchase or sale of securities is guilty of a

SB3439 - 69 - LRB101 16542 JLS 65926 b
Class 2 felony.
B-10. A person who in the course of violating a provision
of subsection E, F, G, H, I, or J or paragraph (1) or (2) of
subsection K of Section 12 of this Act induces a person 60
years of age or older to purchase or sell securities is guilty
of a Class 2 felony.
C. No prosecution for violation of any provision of this
Act shall bar or be barred by any prosecution for the violation
of any other provision of this Act or of any other statute; but
all prosecutions under this Act or based upon any provision of
this Act must be commenced within 3 years after the violation
upon which such prosecution is based; provided however, that if
the accused has intentionally concealed evidence of a violation
of subsection E, F, G, H, I, J, or K of Section 12 of this Act,
the period of limitation prescribed herein shall be extended up
to an additional 2 years after the proper prosecuting officer
becomes aware of the offense but in no such event shall the
period of limitation so extended be more than 2 years beyond
the expiration of the period otherwise applicable.
D. For the purposes of this Act all persons who shall sell
or offer for sale, or who shall purchase or offer to purchase,
securities in violation of the provisions of this Act, or who
shall in any manner knowingly authorize, aid or assist in any
unlawful conduct under this Act shall be deemed equally guilty,
and may be tried and punished in the county in which said
unlawful sale or offering for sale or unlawful purchase or

SB3439 - 70 - LRB101 16542 JLS 65926 b
offer to purchase was made, or in the county in which the
securities so sold or offered for sale or so purchased or
offered to be purchased were delivered or proposed to be
delivered to the purchaser thereof or by the seller thereof, as
the case may be.
E. Any person who shall be convicted of a second or any
subsequent offense specified in subsection A, B, C, D, or
paragraph (3) of subsection K of Section 12 of this Act shall
be guilty of a Class 3 felony, and any person who shall be
convicted of a second or any subsequent offense specified in
subsection E, F, G, H, I, J, or paragraph (1) or (2) of
subsection K of Section 12 of this Act shall be guilty of a
Class 2 felony.
F. If any person referred to in this Section is not a
natural person, it may upon conviction of a first offense be
fined up to $25,000, and if convicted of a second and
subsequent offense, may be fined up to $50,000, in addition to
any other sentence authorized by law.
G. This Act shall not be construed to repeal or affect any
law now in force relating to the organization of corporations
in this State or the admission of any foreign corporation to do
business in this State.
H. For the purposes of this Act, all persons who sell or
offer for sale, or who purchase or offer to purchase any
mineral investment contract or mineral deferred delivery
contract in violation of the provisions of this Act or who, in

SB3439 - 71 - LRB101 16542 JLS 65926 b
any manner, knowingly authorize, aid, or assist in any unlawful
sale or offer for sale or unlawful purchase or offer to
purchase any mineral investment contract or mineral deferred
delivery contract shall be deemed equally guilty and may be
tried and punished in the county in which the unlawful sale or
offer for sale or unlawful purchase or offer to purchase any
mineral investment contract or mineral deferred delivery
contract was made or in the county in which the mineral
investment contract or mineral deferred delivery contract so
sold or offered for sale or so purchased or offered to be
purchased was delivered or proposed to be delivered to the
purchaser thereof or by the seller thereof, as the case may be,
or in Sangamon County.
(Source: P.A. 92-308, eff. 1-1-02; 93-580, eff. 8-21-03.)
(815 ILCS 5/2.14 rep.)
Section 10. The Illinois Securities Law of 1953 is amended
by repealing Section 2.14.