## Facts

- Cablevision Programming Investments was an Illinois limited partnership with its principal place of business in Chicago.
- Dr. Samuel Benjamin, a California resident, bought one limited-partnership unit for $200,000 in 1980.
- The solicitation, receipt of offering materials, and Benjamin’s execution of the subscription agreement occurred in California; Benjamin was not physically present in Illinois for the transaction.
- Offering materials were sent from Illinois; Benjamin’s executed subscription agreement and payment were received in Illinois; Cablevision executed and confirmed the agreement in Illinois and sent confirmation and evidence of ownership to California.
- About two years later, Benjamin learned the partnership interests had not been registered under the Illinois Securities Law of 1953.
- Benjamin sued seeking rescission, interest, and attorney fees, alleging (i) a § 5 registration violation for a sale “in this State,” and (ii) alternatively, a § 4(G) violation for failure to file a required post-sale report.

## Issues

1. Whether the alleged facts stated a claim that the transaction was a sale “in this State” requiring registration under § 5 of the Illinois Securities Law of 1953.
2. Whether the alleged facts stated a claim that § 4(G) required filing a post-sale report, and that failure to file could support rescission under the Act’s civil-liability provisions.

## Decision

- The Illinois Supreme Court affirmed dismissal of Count I, holding the complaint did not sufficiently allege a sale “in this State” for § 5 registration purposes.
- The court reversed dismissal of Count II, holding the complaint adequately alleged facts bringing the transaction within § 4(G)’s reporting requirement at the pleading stage.
- The cause was remanded for further proceedings on the § 4(G) claim.

## Legal Principles

- The Illinois Securities Law’s registration requirement under § 5 applies only to sales that qualify as occurring “in this State,” and an Illinois issuer’s in-state processing of documents and funds does not alone make an otherwise out-of-state purchase a § 5 in-state sale.
- A limited-partnership interest may constitute a “security” under the Act, making statutory registration, exemption, and civil-liability provisions potentially applicable when territorial predicates are met.
- Section 4(G) can impose an Illinois reporting obligation for certain transactions sufficiently connected to Illinois even when full registration is not required; noncompliance may trigger statutory rescission remedies.
- On a motion to dismiss, courts accept well-pleaded allegations as true and determine only whether the complaint states a legally sufficient claim under the statute’s territorial scope.

## Conclusion

The court limited § 5’s registration reach where the purchaser and solicitation were out of state, but allowed a rescission action to proceed based on alleged failure to file an Illinois-required report under § 4(G) for a transaction with substantial Illinois connections.


Benjamin v. Cablevision Programming Invs., 114 Ill. 2d 150, 499 N.E.2d 1309 (Ill. 1986)