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.
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.
STATE OF NEW YORK ________________________________________________________________________ 979 2013-2014 Regular Sessions IN SENATE (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.