STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6247
 
                    IN SENATE
 
                                    January 22, 2002
                                       ___________
 
        Introduced  by  Sens.  DeFRANCISCO,  ALESI,  HOFFMANN,  LARKIN,  LIBOUS,
          MALTESE, MARCELLINO, MARCHI, NOZZOLIO, PADAVAN, TRUNZO, WRIGHT -- read
          twice and ordered printed, and when printed to  be  committed  to  the
          Committee on Codes
 
        AN  ACT  to amend the general business law, in relation to the penalties
          for certain fraudulent and prohibited acts
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 6 of section 352-c of the general business law,
     2  as  added  by  chapter  146  of  the laws of 1982, is amended to read as
     3  follows:
     4    6. Any person, partnership, corporation,  company,  trust  or  associ-
     5  ation,  or  any  agent  or employee thereof who intentionally engages in
     6  fraud, deception, concealment, suppression, false pretense or fictitious
     7  or pretended purchase or sale, or who makes any material false represen-
     8  tation or statement with intent to deceive or defraud, while engaged  in
     9  inducing  or promoting the issuance, distribution, exchange, sale, nego-
    10  tiation or purchase within or from  this  state  of  any  securities  or
    11  commodities,  as defined in this article, and thereby wrongfully obtains
    12  property of a value in excess of two hundred  fifty  dollars,  shall  be
    13  guilty of a class [E] D felony.
    14    §  2.  This  act  shall  take effect on the first day of November next
    15  succeeding the date on which it shall have become a law.
 
 
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14702-03-2

 
BILL NUMBER: S6247
 
SPONSOR: DEFRANCISCO

 
TITLE OF BILL:  An act to amend the general business law, in relation
to the penalties for certain fraudulent and prohibited acts
 
 
PURPOSE:  To increase the penalty for fraudulent practices affecting
the trading of securities
 
 
SUMMARY OF PROVISIONS:  Section One. Amends Subdivision 6 of § 352-c
of the General Business Law to provide that wrongfully obtaining proper-
ty with a value in excess of $250 as a result of fraudulent practices
affecting the trade of securities is punishable as a Class D felony.
This crime is currently punishable as a Class E felony.
 
 
JUSTIFICATION:  New Yorkers routinely invest in securities for essen-
tial purposes such as providing retirement income, amassing a down
payment for a home, expenses of higher education, or business invest-
ment. For a person to assess the risk or reward of purchasing or selling
securities, it is important that they are able to make investment deci-
sions free of information known to be false.
 
The recent, well-publicized failure of certain large corporations has
come with allegations that high-ranking officers of those firms engaged
in deceptive accounting practices designed to conceal the actual condi-
tion of their finances. Such actions can significantly influence the
market value of securities issued by a corporation, creating a situation
where those with knowledge of the fraud can unfairly profit from trading
activity. To protect the public against such acts, and in reflection of
the substantial profits that can be realized by such frauds, it is
appropriate to raise this crime to a Class D felony.
 
 
LEGISLATIVE HISTORY:  New bill
 
 
FISCAL IMPLICATIONS:  None.
 
 
EFFECTIVE DATE:  Ninety days after it shall have become a law.