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SECTION 723
Specific prohibited financial interests and transactions
Labor (LAB) CHAPTER 31, ARTICLE 20-A
§ 723. Specific prohibited financial interests and transactions. 1.
Without limiting his fiduciary obligation provided in section seven
hundred twenty-two, it shall constitute a violation of his fiduciary
obligation for an officer or agent of a labor organization:

(a) To have, directly or indirectly, any financial interest in any
business or transaction of either an employer whose employees his labor
organization represents or seeks to represent for purposes of collective
bargaining, or an employer who is in the same industry as such an
employer;

(b) To have, directly or indirectly, any financial interest in the
business or transaction of any person who sells to, buys from, or
otherwise deals with (i) an employer whose employees his labor
organization represents or seeks to represent for purposes of collective
bargaining, or (ii) an employer organization which represents such
employer, or (iii) an employer who is in the same industry as such an
employer;

(c) To have, directly or indirectly, any financial interest in the
business of any person who sells to, buys from, or otherwise deals with
his labor organization;

(d) To have, directly or indirectly, any financial interest in any
transaction with his labor organization for the purchase or sale of
property or services, except reasonable compensation for services
rendered by him to such organization as officer or agent;

(e) To receive, directly or indirectly, any payments, loans, or gifts
from (i) an employer whose employees his labor organization represents
or seeks to represent for purposes of collective bargaining, or (ii) an
employer organization which represents such employer, or (iii) an
employer who is in the same industry as such an employer; provided,
however, that such an officer or agent may receive reasonable
compensation for services rendered by him as an employee of such
employer, or payments required by collective agreement to be made in
lieu of wages for time lost from work while engaged in collective
bargaining, handling of grievances, or otherwise in the administration
of a collective agreement;

(f) To lend any funds of the labor organization, directly or
indirectly, to either any officer, agent, or employee of such
organization, or any business in which an officer, agent, or employee of
such organization has, directly or indirectly, a financial interest;
provided, however, that loans may be made from a loan fund which has
been set aside in accordance with a written resolution of the governing
board of the labor organization for the specific purpose of making
personal loans to its officers, agents, and employees generally, in
compliance with established, written rules; or

(g) To lend or invest any funds of the labor organization, directly or
indirectly, in any business of an employer whose employees his labor
organization represents or seeks to represent for purposes of collective
bargaining, except where the governing board of the labor organization
has adopted a written resolution finding and determining that such loan
or investment will promote the best interests of the employees and will
not adversely affect collective bargaining.

2. The fact that conduct or acts of an officer or agent of a labor
organization have not caused damage to such organization or any of its
members, or have been ratified or acquiesced in by such organization or
its members, shall not be relevant in determining whether such conduct
or acts constitute a violation by such officer or agent of any of the
obligations provided in section seven hundred twenty-two and in this
section.

3. Nothing contained in this section shall prohibit an officer or
agent of a labor organization from:

(a) holding a financial interest acquired as an employee through a
regularly established employee benefit plan, including a stock purchase,
profit sharing, pension or retirement plan;

(b) holding securities traded on a securities exchange registered as a
national exchange under the securities exchange act of nineteen hundred
thirty-four, or securities traded on over-the-counter markets within the
meaning of such act, or shares in an investment company registered under
the investment company act of nineteen hundred forty, or securities of a
public utility holding company registered under the public utility
holding company act of nineteen hundred thirty-five, and all federal
laws amendatory and supplemental to such acts; provided, however, that
any investment in such securities or shares shall not constitute more
than one per cent of the outstanding securities or shares of the
respective class or classes of securities or shares which he holds;

(c) lending to, or investing in, any business owned predominantly by a
labor organization or labor organizations; or

(d) receiving gifts, otherwise lawful, from employers whose employees
his labor organization represents and from employer organizations which
represent such employers, provided the cumulative retail value of such
gifts from all such employers and employer organizations does not exceed
one hundred dollars in any calendar year.

4. Nothing contained in this section shall prohibit any labor
organization from:

(a) Acquiring a nominal number of shares in any corporation for the
purpose of qualifying as stockholder in order to obtain financial
statements of the corporation; or

(b) Lending to, or investing in, any business owned predominately by a
labor organization or labor organizations.