Bill Text: NY A06227 | 2023-2024 | General Assembly | Introduced


Bill Title: Authorizes a public retirement system, as defined in section 501 of the retirement and social security law, mutual fund, or other institutional investor to bring actions for damages sustained due to the commission of certain prohibited and criminal acts in violation of the Martin Act (Fraudulent Practice in Respect to Stocks, Bonds and other Securities).

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced) 2024-01-03 - referred to governmental employees [A06227 Detail]

Download: New_York-2023-A06227-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          6227

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                      April 3, 2023
                                       ___________

        Introduced by M. of A. WEPRIN, BRONSON, COLTON -- read once and referred
          to the Committee on Governmental Employees

        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:

     1    Section 1. The business corporation law is amended  by  adding  a  new
     2  section 631 to read as follows:
     3  § 631. Action by certain mutual funds and other institutional investors.
     4    (a) Any mutual fund or other institutional investor incorporated under
     5  the  laws  of this state or which maintains its principal place of busi-
     6  ness in this state, that is damaged in connection with the  purchase  or
     7  sale  of  a security as a result of the commission of any act prohibited
     8  by section three hundred fifty-two-c of the general  business  law,  may
     9  bring  an  action  for  damages  against any person, partnership, corpo-
    10  ration, company, limited liability company, trust, or  association  that
    11  committed or participated in the commission of such prohibited act.
    12    (b) No mutual fund or other institutional investor that had fewer than
    13  five  hundred  beneficiaries  at the time of the purchase or sale of the
    14  security may bring an action under this section.
    15    (c) With respect to allegations that a representation or statement was
    16  false, the plaintiff with respect to allegations required to  plead  and
    17  prove  that the person who made such statement: (i) knew the truth; (ii)
    18  with reasonable effort could have known the truth; (iii) made no reason-
    19  able effort to ascertain the truth;  or  (iv)  did  not  have  knowledge
    20  concerning the representation or statement made. With respect to allega-
    21  tions  of any other nature, the plaintiff is required to plead and prove
    22  that the person acted with negligence.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09899-01-3

        A. 6227                             2

     1    (d) No such action may be brought more than six years  from  the  time
     2  the  plaintiff  discovered  the  allegedly prohibited act or could, with
     3  reasonable diligence, have discovered it.
     4    (e)  After such action has been brought, notwithstanding any provision
     5  of law to the contrary, disclosure and related proceedings shall not  be
     6  stayed during the pendency of any motion to dismiss, unless the court so
     7  directs.
     8    §  2.  Section  179-a  of  the  retirement and social security law, as
     9  renumbered by chapter 868 of the laws of  1975,  is  renumbered  section
    10  179-b and a new section 179-a is added to read as follows:
    11    §  179-a.  Action by certain public pension plan or fund or retirement
    12  system investors. 1. A public retirement system as defined  in  subdivi-
    13  sion  twenty-three  of section five hundred one of this chapter, that is
    14  damaged in connection with the purchase or  sale  of  a  security  as  a
    15  result  of the commission of any act prohibited by section three hundred
    16  fifty-two-c of the general business law, may bring an action for damages
    17  against any person, partnership, corporation, company, limited liability
    18  company, trust, or association that committed  or  participated  in  the
    19  commission of such prohibited act.
    20    2.  No  such public pension plan or fund or retirement system investor
    21  that had fewer than five  hundred  beneficiaries  at  the  time  of  the
    22  purchase or sale of the security may bring an action under this section.
    23    3.  With respect to allegations that a representation or statement was
    24  false, the plaintiff is required to plead and prove that the person  who
    25  made  such  statement:  (a)  knew  the truth; (b) with reasonable effort
    26  could have known the truth; (c) made no reasonable effort  to  ascertain
    27  the  truth;  or (d) did not have knowledge concerning the representation
    28  or statement made. With respect to allegations of any other nature,  the
    29  plaintiff  is  required  to  plead  and prove that the person acted with
    30  negligence.
    31    4. No such action may be brought more than six years from the time the
    32  plaintiff discovered the allegedly prohibited act or could, with reason-
    33  able diligence, have discovered it.
    34    5. After such action has been brought, notwithstanding  any  provision
    35  of  law to the contrary, disclosure and related proceedings shall not be
    36  stayed during the pendancy of any motion to dismiss, unless the court so
    37  directs.
    38    § 3. This act shall take effect immediately and shall apply to  causes
    39  of action accruing and actions pending before, on, or after such date.
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