senate Bill S965

Relates to the attorney general's investigation and commencement of actions relating to fraudulent practices alleged to have damaged a public retirement system

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 09 / Jan / 2013
    • REFERRED TO CIVIL SERVICE AND PENSIONS
  • 08 / Jan / 2014
    • REFERRED TO CIVIL SERVICE AND PENSIONS

Summary

Relates to the attorney general's investigation and commencement of actions relating to fraudulent practices alleged to have damaged a public retirement system.

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Bill Details

See Assembly Version of this Bill:
A6585
Versions:
S965
Legislative Cycle:
2013-2014
Current Committee:
Senate Civil Service And Pensions
Law Section:
Retirement and Social Security Law
Laws Affected:
Amd §14, R & SS L; amd §353, Gen Bus L
Versions Introduced in 2011-2012 Legislative Cycle:
S7465, A9627

Sponsor Memo

BILL NUMBER:S965

TITLE OF BILL:
An act
to amend
the retirement and social security law and the general business law, in
relation to the attorney general's investigation and commencement of
actions relating to fraudulent practices alleged to have damaged a
public retirement system

PURPOSE:
This bill would require the Attorney General to investigate and where
appropriate to commence a civil action to recover damages suffered
by New York public retirement systems as a result of securities fraud.

SUMMARY OF PROVISIONS:
Section 1 amends the retirement and social security law to require the
Attorney General to investigate and where appropriate pursue
allegations of securities fraud upon the request of the New York
State and Local Employees Retirement System and the police and Fire
Retirement System.

Section 2 amends the general business law (Martin Act) by adding a
new section 353-b (3) to accomplish 41 above for all public
retirement systems. The bill provides for reimbursement to the
Attorney General from the public retirement system of reasonable
investigation and litigation costs.

Section 3 provides that the bill applies to fraudulent actions or
omissions that occurred after January 1, 2003.

JUSTIFICATION:
Shockingly, there is no standing for the Attorney General or the
public retirement systems themselves to bring an action for
securities fraud under the NYS Martin Act. This is so despite the
fact that these funds together hold over $250 billion in public
funds. From 2007 to 2009 the net asset value of these funds declined
by over $100 billion largely because of the now well documented
securities fraud that led to the greatest financial calamity since
the Great Depression. As a result, public pension benefits are
subject to cuts for new hires and public employer pension
contributions have escalated dramatically.

According to a report of the NYC Comptroller, about half of this
employer contribution increase is due to the asset value losses
during this short time period. To the extent that this asset value
loss was caused by securities fraud, this money should be recovered
before pension benefits are materially cut for new hires.

LEGISLATIVE HISTORY:
S.7465 - Referred to Civil Service and Pensions

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:


The act to take effect immediately and apply to causes accruing and
actions pending before, on, or after January 1, 2003.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   965

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen.  LIBOUS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Civil Service and Pensions

AN ACT to amend the retirement and social security law and  the  general
  business  law, in relation to the attorney general's investigation and
  commencement of actions relating to fraudulent  practices  alleged  to
  have damaged a public retirement system

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1.  Section 14 of the retirement and social  security  law  is
amended to read as follows:
  S  14.  Legal adviser.  The attorney-general of the state shall be the
legal adviser of the retirement system AND SHALL  RECEIVE  REQUESTS  FOR
INVESTIGATION   AND   LITIGATION   PURSUANT  TO  SECTION  THREE  HUNDRED
FIFTY-THREE OF THE GENERAL BUSINESS LAW.
  S 2. Subdivision 3 of section 353 of  the  general  business  law,  as
added by chapter 559 of the laws of 1976, is amended to read as follows:
  3.  (A) Upon a showing by the attorney general that a fraudulent prac-
tice as defined by this article has  occurred,  he  may  include  in  an
action  under  this  article an application to direct restitution of any
moneys or property obtained directly or indirectly by any  such  fraudu-
lent  practice,  PROVIDED  HOWEVER, THAT UPON THE WRITTEN REQUEST OF THE
TRUSTEE OF THE NEW YORK STATE AND LOCAL  EMPLOYEES'  RETIREMENT  SYSTEM,
THE  NEW  YORK  STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM OR THE
TRUSTEE OF ANY OTHER PUBLIC RETIREMENT SYSTEM AS DEFINED IN  SUBDIVISION
A  OF  SECTION  EIGHT HUNDRED OF THE RETIREMENT AND SOCIAL SECURITY LAW,
ALLEGING THAT SUCH PUBLIC RETIREMENT SYSTEM HAS  BEEN  DAMAGED  BY  SUCH
FRAUDULENT  PRACTICES,  THE  ATTORNEY GENERAL SHALL, WITHIN A REASONABLE
TIME PERIOD, INVESTIGATE THE FACTS ALLEGED IN  THE  REQUEST  AND,  WHERE
APPROPRIATE,  COMMENCE  AN  ACTION UNDER THIS ARTICLE FOR RESTITUTION TO
SUCH PUBLIC RETIREMENT SYSTEM OF ANY MONEYS OR PROPERTY OBTAINED DIRECT-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05295-01-3

S. 965                              2

LY OR INDIRECTLY BY ANY SUCH FRAUDULENT PRACTICE. ANY FINAL JUDGMENT  OR
SETTLEMENT  WHICH  PROVIDES  FOR  SUCH  RESTITUTION OF MONEY OR PROPERTY
SHALL BE TIMELY REMITTED TO THE AFFECTED PUBLIC RETIREMENT SYSTEM.
  (B)  WHERE  A  REQUEST  IS  MADE  TO  THE ATTORNEY GENERAL BY A PUBLIC
RETIREMENT SYSTEM TRUSTEE OR TRUSTEES PURSUANT TO PARAGRAPH (A) OF  THIS
SUBDIVISION,  SUCH PUBLIC RETIREMENT SYSTEM SHALL REIMBURSE THE ATTORNEY
GENERAL FOR REASONABLE  INVESTIGATION,  LITIGATION,  COURT  FEE,  EXPERT
WITNESS AND OTHER REASONABLE RELATED COSTS.
  S 3. This act shall take effect immediately and shall apply to actions
or omissions committed on or after January 1, 2003.

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