Senate Bill S1022

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1022
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 10, 2019
                                ___________
 
 Introduced  by  Sen.  RIVERA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Corporations,  Authorities
   and Commissions
 
 AN  ACT  to  amend  the  business corporation law and the retirement and
   social security law, in relation to  authorizing  certain  actions  by
   institutional investors

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The business corporation law is amended  by  adding  a  new
 section 631 to read as follows:
 § 631. ACTION BY CERTAIN MUTUAL FUNDS AND OTHER INSTITUTIONAL INVESTORS.
   (A) ANY MUTUAL FUND OR OTHER INSTITUTIONAL INVESTOR INCORPORATED UNDER
 THE  LAWS  OF THIS STATE OR WHICH MAINTAINS ITS PRINCIPAL PLACE OF BUSI-
 NESS 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 THE GENERAL  BUSINESS  LAW,  MAY
 BRING  AN  ACTION  FOR  DAMAGES  AGAINST ANY PERSON, PARTNERSHIP, CORPO-
 RATION, COMPANY, LIMITED LIABILITY COMPANY, TRUST, OR  ASSOCIATION  THAT
 COMMITTED OR PARTICIPATED IN THE COMMISSION OF SUCH PROHIBITED ACT.
   (B) NO MUTUAL FUND OR OTHER INSTITUTIONAL INVESTOR THAT HAD FEWER THAN
 FIVE  HUNDRED  BENEFICIARIES  AT THE TIME OF THE PURCHASE OR SALE OF THE
 SECURITY MAY BRING AN ACTION UNDER THIS SECTION.
   (C) WITH RESPECT TO ALLEGATIONS THAT A REPRESENTATION OR STATEMENT WAS
 FALSE, THE PLAINTIFF WITH RESPECT TO ALLEGATIONS REQUIRED TO  PLEAD  AND
 PROVE  THAT THE PERSON WHO MADE SUCH STATEMENT: (I) KNEW THE TRUTH; (II)
 WITH REASONABLE EFFORT COULD HAVE KNOWN THE TRUTH; (III) MADE NO REASON-
 ABLE EFFORT TO ASCERTAIN THE TRUTH;  OR  (IV)  DID  NOT  HAVE  KNOWLEDGE
 CONCERNING THE REPRESENTATION OR STATEMENT MADE. WITH RESPECT TO ALLEGA-
 TIONS  OF ANY OTHER NATURE, THE PLAINTIFF IS REQUIRED TO PLEAD AND PROVE
 THAT THE PERSON ACTED WITH NEGLIGENCE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06775-01-9
              

 S. 1022                             2
 
   (D) 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.
   (E)  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.
   §  2.  Section  179-a  of  the  retirement and social security law, as
 renumbered by chapter 868 of the laws of  1975,  is  renumbered  section
 179-b and a new section 179-a is added to read as follows:
   §  179-A.  ACTION BY CERTAIN PUBLIC PENSION PLAN OR FUND OR RETIREMENT
 SYSTEM INVESTORS. 1. A PUBLIC RETIREMENT SYSTEM AS DEFINED  IN  SUBDIVI-
 SION  TWENTY-THREE  OF SECTION FIVE HUNDRED ONE OF THIS CHAPTER, 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 THE GENERAL BUSINESS LAW, MAY BRING AN ACTION FOR DAMAGES
 AGAINST ANY PERSON, PARTNERSHIP, CORPORATION, COMPANY, LIMITED LIABILITY
 COMPANY, TRUST, OR ASSOCIATION THAT COMMITTED  OR  PARTICIPATED  IN  THE
 COMMISSION OF SUCH PROHIBITED ACT.
   2.  NO  SUCH PUBLIC PENSION PLAN OR FUND OR RETIREMENT SYSTEM INVESTOR
 THAT HAD FEWER THAN FIVE  HUNDRED  BENEFICIARIES  AT  THE  TIME  OF  THE
 PURCHASE OR SALE OF THE SECURITY MAY BRING AN ACTION UNDER THIS SECTION.
   3.  WITH RESPECT TO ALLEGATIONS THAT A REPRESENTATION OR STATEMENT WAS
 FALSE, THE PLAINTIFF IS REQUIRED TO PLEAD AND PROVE THAT THE PERSON  WHO
 MADE  SUCH  STATEMENT:  (A)  KNEW  THE TRUTH; (B) WITH REASONABLE EFFORT
 COULD HAVE KNOWN THE TRUTH; (C) MADE NO REASONABLE EFFORT  TO  ASCERTAIN
 THE  TRUTH;  OR (D) DID NOT HAVE KNOWLEDGE CONCERNING THE REPRESENTATION
 OR STATEMENT MADE. WITH RESPECT TO ALLEGATIONS OF ANY OTHER NATURE,  THE
 PLAINTIFF  IS  REQUIRED  TO  PLEAD  AND PROVE THAT THE PERSON ACTED WITH
 NEGLIGENCE.
   4. NO SUCH ACTION MAY BE BROUGHT MORE THAN SIX YEARS FROM THE TIME THE
 PLAINTIFF DISCOVERED THE ALLEGEDLY PROHIBITED ACT OR COULD, WITH REASON-
 ABLE DILIGENCE, HAVE DISCOVERED IT.
   5. AFTER SUCH ACTION HAS BEEN BROUGHT, NOTWITHSTANDING  ANY  PROVISION
 OF  LAW TO THE CONTRARY, DISCLOSURE AND RELATED PROCEEDINGS SHALL NOT BE
 STAYED DURING THE PENDANCY OF ANY MOTION TO DISMISS, UNLESS THE COURT SO
 DIRECTS.
   § 3. 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.