Appeal from the Circuit Court of Cook County; the Hon. DONALD
S. McKINLAY, Judge, presiding. Affirmed.
MR. JUSTICE MURPHY DELIVERED THE OPINION OF THE COURT.
This is an administrative review action. Plaintiff appeals from an affirmance by the Circuit Court of a decision of the Secretary of State, which prohibits plaintiff "from acting as an investment adviser in the State of Illinois except in compliance with The Illinois Securities Law of 1953." Ill Rev Stats 1963, ch 121 1/2, § 137.1 et seq.
Plaintiff, Marketlines, Inc., is a New York corporation engaged in the preparation and sale of a weekly investment letter, which gives advice on the prospect of what it thinks a stock will do, based on plaintiff's interpretation of technical factors. It has no office or physical representation in Illinois. Its president, David S. Romanoff, filed an application in Illinois for registration as an investment adviser. He did not get a passing grade on the examination, and no license was issued, whereupon he withdrew his application.
Plaintiff receives subscriptions through the mail at its New York office, and sends its market letter to subscribers through the mail. It has subscribers all over the country and abroad. The market letter shows on its face that it has been registered with the U.S. Securities and Exchange Commission. Plaintiff has approximately 30 to 40 subscribers in Illinois, which were obtained through the mail as a result of direct mail advertising and four New York paper advertisements.
On appeal, plaintiff contends: (1) The Illinois Securities Law provisions concerning an "investment adviser" do not apply to a foreign corporation which publishes a stock market advisory letter and is engaged solely in interstate commerce; (2) The judgment is contrary to the manifest weight of the evidence and the law; (3) Plaintiff has been denied the equal protection of the law in violation of the 5th and 14th Amendments to the Constitution of the United States of America.
The sections of the Illinois Securities Law of 1953 with which we are concerned are as follows:
Section 2-11 (¶ 137.2-11):
"`Investment adviser' means any person who for compensation engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who for compensation and as part of a regular advisory business issues or promulgates analyses or reports concerning securities; but `investment adviser' shall not include:
(4) any publisher or regular employee of such publisher of a bona fide newspaper, news magazine, or business or financial publication of regular and established paid circulation;
"An application for registration as an investment adviser, duly verified by oath, shall be filed in the office of the Secretary of State, in such form as the Secretary of State may by rule or regulation prescribe, setting forth or accompanied by:
(1) the name and form of organization under which the investment adviser engages or intends to engage in business; the name of the State or other sovereign power under which such investment adviser is organized; the location of his or its principal business office and branch offices, if any; the names and addresses of his or its partners, officers, directors, and persons performing similar functions or, if such an investment adviser be an individual, of such individual; and the number of his or its employees;
(7) a statement as to whether such investment adviser is engaged or is to engage primarily in the business of rendering investment supervisory services; and
Initially, we consider plaintiff's principal contention that "it is elementary that the power of the State of Illinois to regulate a business does not extend to a foreign corporation whose business in Illinois is solely interstate commerce." Cases cited in support of this contention are Air Conditioning Training Corp. v. Majer, 324 Ill. App. 387, 58 N.E.2d 294 (1944); Saletko v. Willys Motors, Inc., 36 Ill. App.2d 7, 183 N.E.2d 569 (1962); Grobark v. Addo Machine Co., Inc., 16 Ill.2d 426, 158 N.E.2d ...