senate Bill S979

2013-2014 Legislative Session

Enacts the "institutional investor recovery act"

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to consumer protection
Jan 09, 2013 referred to consumer protection

Co-Sponsors

S979 - Bill Details

See Assembly Version of this Bill:
A7282
Current Committee:
Senate Consumer Protection
Law Section:
General Business Law
Laws Affected:
Add §353-b, amd §353, Gen Bus L
Versions Introduced in 2011-2012 Legislative Session:
S4497A, A6060A

S979 - Bill Texts

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Enacts the "institutional investor recovery act"; relates to an action by certain public retirement systems or multi-employer health and welfare plans organized under the Taft-Hartley act.

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BILL NUMBER:S979

TITLE OF BILL:
An act
to amend the general business law,
in relation to enacting the "institutional investor
recovery act"

PURPOSE:
This bill would authorize public pension funds and Taft Hartley
pension funds to bring actions for damages resulting from violations
of the state's Martin Act.

SUMMARY OF PROVISIONS:
Section 1 names the bill the "institutional investor recovery act."

Section 2 amends the general business law by adding a new section
353-b to allow public r'etirement systems and multi-employer health
and welfare plans to bring an action for' damages against an entity
that committed, aided or abetted or part,icipated in securities fraud
under the Martin Act within six years from discovering the alleged
prohibited act.

Section 3 amends section 353 of the general business law to add a new
subdivision 4 clarifying that nothing in the act will preempt any
purchaser or seller of securities fr'om bringing any common law
claims concerning alleged deceptions made in a securities or
commodities trans'action.

Section 4 provides for the act to take effect immediately and apply
to causes of action accruing and actions pending before, on, or after
the effective date.

JUSTIFICATION:
Public pension funds and private sector multi-employer health and
welfare plans have found themselves without remedy for damages and
massive losses due to violations of state securities laws. Under
current law, the state attorney general has broad powers to
prosecute fraudulent securities practices, yet investors have no
such right under the state's securities laws, making New York only
one of two states without such remedy.

While investors may assert damage claims in federal court for
violations of federal securities law, such claims are highly
restrictive in both substance and procedure, extinguishing many
otherwise valid claims of wrongdoing. Investors should have the right
to bring claims on their own behalf under New York's securities law.

LEGISLATIVE HISTORY:
S.4497-A - Referred to Consumer Protection

EFFECTIVE DATE:
The act to take effect immediately and apply to causes of action
accruing and actions pending before, on, or after the effective date.


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

                                   979

                       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 Consumer Protection

AN ACT to amend the general business law, in relation  to  enacting  the
  "institutional investor recovery act"

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

  Section 1. Short title.  This act shall be known and may be  cited  as
the "institutional investor recovery act".
  S 2. The general business law is amended by adding a new section 353-b
to read as follows:
  S 353-B. ACTION BY CERTAIN PUBLIC RETIREMENT SYSTEMS AND MULTI-EMPLOY-
ER  HEALTH AND WELFARE RETIREMENT PLANS ORGANIZED UNDER THE TAFT-HARTLEY
ACT.  (A) ANY PUBLIC RETIREMENT SYSTEM AS DEFINED IN  SUBDIVISION  TWEN-
TY-THREE  OF SECTION FIVE HUNDRED ONE OF THE RETIREMENT AND SOCIAL SECU-
RITY LAW, OR ANY  MULTI-EMPLOYER  HEALTH  AND  WELFARE  RETIREMENT  PLAN
ORGANIZED  UNDER THE TAFT-HARTLEY ACT AND INCORPORATED UNDER THE LAWS OF
THIS STATE OR WHICH MAINTAINS ITS PRINCIPAL PLACE OF  BUSINESS  IN  THIS
STATE,  THAT  IS  DAMAGED  IN  CONNECTION WITH THE PURCHASE OR SALE OF A
SECURITY AS A RESULT OF THE COMMISSION OF ANY ACT PROHIBITED BY  SECTION
THREE  HUNDRED  FIFTY-TWO-C  OF  THIS  ARTICLE,  MAY BRING AN ACTION FOR
DAMAGES AGAINST ANY PERSON, PARTNERSHIP, CORPORATION,  COMPANY,  LIMITED
LIABILITY  COMPANY, TRUST, OR ASSOCIATION THAT COMMITTED, AIDED OR ABET-
TED OR IN ANY WAY PARTICIPATED IN THE COMMISSION OF SUCH PROHIBITED ACT.
  (B) NO PUBLIC RETIREMENT SYSTEM OR MULTI-EMPLOYER HEALTH  AND  WELFARE
RETIREMENT  PLANS  ORGANIZED  UNDER  THE TAFT-HARTLEY ACT THAT HAD FEWER
THAN ONE HUNDRED BENEFICIARIES AT THE TIME OF THE PURCHASE  OR  SALE  OF
THE SECURITY MAY BRING AN ACTION UNDER THIS SECTION.
  (C)  NO  SUCH  ACTION MAY BE BROUGHT MORE THAN SIX YEARS FROM THE TIME
THE PLAINTIFF DISCOVERED THE ALLEGEDLY PROHIBITED  ACT  OR  COULD,  WITH
REASONABLE DILIGENCE, HAVE DISCOVERED IT.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05286-01-3

S. 979                              2

  (D)  AFTER SUCH ACTION HAS BEEN BROUGHT, NOTWITHSTANDING ANY PROVISION
OF LAW TO THE CONTRARY, DISCLOSURE AND RELATED PROCEEDINGS SHALL NOT  BE
STAYED DURING THE PENDENCY OF ANY MOTION TO DISMISS, UNLESS THE COURT SO
DIRECTS.
  S  3.  Section  353 of the general business law is amended by adding a
new subdivision 4 to read as follows:
  4. NOTHING IN THIS ARTICLE SHALL PREEMPT ANY PURCHASER  OR  SELLER  OF
SECURITIES OR COMMODITIES FROM BRINGING ANY COMMON LAW CLAIMS CONCERNING
ANY  ALLEGED  DECEPTION,  MISREPRESENTATION,  CONCEALMENT,  SUPPRESSION,
FRAUD, FALSE PRETENSE OR FALSE PROMISE MADE IN CONNECTION WITH THE  SALE
OR  PURCHASE  OF  SUCH SECURITIES OR COMMODITIES AS DESCRIBED IN SECTION
THREE HUNDRED FIFTY-TWO OF THIS ARTICLE.
  S 4. This act shall take effect immediately and shall apply to  causes
of  action  accruing and actions pending before, on, or after its effec-
tive date.

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