AB6242 Summary:

BILL NOA06242
 
SAME ASSAME AS S05113
 
SPONSOROrtiz
 
COSPNSR
 
MLTSPNSR
 
Add §353-b, amd §353, Gen Bus L
 
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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AB6242 Actions:

BILL NOA06242
 
03/01/2017referred to codes
01/03/2018referred to codes
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AB6242 Committee Votes:

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AB6242 Floor Votes:

There are no votes for this bill in this legislative session.
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AB6242 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6242
 
SPONSOR: Ortiz
  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 retirement systems and multi-employer health and welfare plans to bring an action for damages against an entity that committed, aided or abetted or participated 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 from 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: 2011/12: A6060A referred to Codes 2013/14: A7282 Referred to Codes 2015/2016: A5946 Referred to Codes   FISCAL IMPLICATIONS: To be determined   EFFECTIVE DATE: This act shall take effect immediately and apply to causes of action accruing and actions pending before, on, or after the effective date.
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AB6242 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6242
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                      March 1, 2017
                                       ___________
 
        Introduced  by M. of A. ORTIZ -- read once and referred to the Committee
          on Codes
 
        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:

     1    Section 1. Short title.  This act shall be known and may be  cited  as
     2  the "institutional investor recovery act".
     3    § 2. The general business law is amended by adding a new section 353-b
     4  to read as follows:
     5    § 353-b. Action by certain public retirement systems and multi-employ-
     6  er  health and welfare retirement plans organized under the Taft-Hartley
     7  act.  (a) Any public retirement system as defined in  subdivision  twen-
     8  ty-three  of section five hundred one of the retirement and social secu-
     9  rity law, or any  multi-employer  health  and  welfare  retirement  plan
    10  organized  under the Taft-Hartley act and incorporated under the laws of
    11  this state or which maintains its principal place of  business  in  this
    12  state,  that  is  damaged  in  connection with the purchase or sale of a
    13  security as a result of the commission of any act prohibited by  section
    14  three  hundred  fifty-two-c  of  this  article,  may bring an action for
    15  damages against any person, partnership, corporation,  company,  limited
    16  liability  company, trust, or association that committed, aided or abet-
    17  ted or in any way participated in the commission of such prohibited act.
    18    (b) No public retirement system or multi-employer health  and  welfare
    19  retirement  plans  organized  under  the Taft-Hartley act that had fewer
    20  than one hundred beneficiaries at the time of the purchase  or  sale  of
    21  the security may bring an action under this section.
    22    (c)  No  such  action may be brought more than six years from the time
    23  the plaintiff discovered the allegedly prohibited  act  or  could,  with
    24  reasonable diligence, have discovered it.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07805-01-7

        A. 6242                             2
 
     1    (d)  After such action has been brought, notwithstanding any provision
     2  of law to the contrary, disclosure and related proceedings shall not  be
     3  stayed during the pendency of any motion to dismiss, unless the court so
     4  directs.
     5    §  3.  Section  353 of the general business law is amended by adding a
     6  new subdivision 5 to read as follows:
     7    5. Nothing in this article shall preempt any purchaser  or  seller  of
     8  securities or commodities from bringing any common law claims concerning
     9  any  alleged  deception,  misrepresentation,  concealment,  suppression,
    10  fraud, false pretense or false promise made in connection with the  sale
    11  or  purchase  of  such securities or commodities as described in section
    12  three hundred fifty-two of this article.
    13    § 4. This act shall take effect immediately and shall apply to  causes
    14  of  action  accruing and actions pending before, on, or after its effec-
    15  tive date.
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