CHICAGO –– Illinois Secretary of State Jesse White
commended Governor Ryan for signing legislation that will
provide added protection to investors and streamline
requirements for the securities industry.
White’s securities department, which registers
securities, broker-dealers, investment advisers and their
representatives, proposed that amendments to the Securities
Act be made.
"These days everyone is investing in the market," White
said. "This new law will better protect the investor who
doesn’t have as much experience in the financial arena. It
also will help us to more fully align our system with
federal and state regulations."
The securities department will implement the new law,
formerly HB3944, which includes changes to the Illinois
Securities Law, the Illinois Business Brokers Act and the
Illinois Business Opportunities Sales Law.
Many of the changes give more authority to White’s
securities department to investigate and file action against
individuals who offer fraudulent investment opportunities.
Major changes to the Securities Act give the office
authority to file actions against registered representatives
who don’t fully supervise their salespersons.
Other changes require that investment advisers and
representatives who have assets under management of less
than $25 million to register in Illinois. Those advisors and
representatives are now subject to enforcement actions by
the office. There are more than 7,000 investment adviser
representatives registered in Illinois. Those who manage
more than $25 million fall under the jurisdiction of the
Securities and Exchange Commission.
The new law also authorizes the office to issue a
Temporary Order of Prohibition for a period of 90 days. Such
orders are issued when the department receives evidence of
wrongdoing. Extending the prohibition period to 90 days
allows the department to further investigate while ensuring
that additional investors are not solicited.
Under the new law, several definitions in the
Securities Act were changed. For
example, a securities "offer" includes those made orally, in
printed form, or via the electronic media. This change was implemented in response to
complaints involving investments offered over the Internet
and at seminars.
The new law also gives White’s securities department
jurisdiction to take action against business opportunity
companies that commit fraud, regardless of the price the
opportunity is sold for. Prior to the amendment, the
department only had authority over business opportunities
sold for $500 or more, and also exempted those sellers who
had a net worth of more than $1 million.
"This is just another way we are trying to implement
changes in the law that are in line with the changing
times," White said.
