New York Securities Laws

Since 1921, the wolves of Wall Street have been systematically hunted by New York's attorney generals. With the passing of the Martin Act, the New York securities fraud laws provide the state's attorney general with extraordinary powers for fighting financial fraud. This power far exceeds that of any other attorney general in the United States. This is a quick summary of the securities fraud laws in New York.

Civil and Criminal Charges Under New York Securities Laws

The Martin Act and additional criminal provisions have been codified under Article 23-A of New York's General Business Law. The following table outlines the specifics of New York securities fraud laws.

Code Sections

New York General Business §352 and §353 : Investigation and Action by the Attorney General

New York General Business §352-C: Prohibited acts constituting misdemeanor; felony

What's Prohibited?

New York securities fraud laws provide the state's attorney general with the power to investigate and sue any person, partnership, or corporation that employs any device or scheme to defraud or to obtain money or property by means of any false pretense, representation, or promise.

Misdemeanor

It is a misdemeanor under New York securities fraud laws when someone is engaged in inducing or promoting the issuance, distribution, exchange, sale, negotiation or purchase of securities and:

  • Uses fraud or deception in the purchase or sale; or

  • Promises to a future that is beyond reasonable expectation; or

  • Knows or has reason to know a statement made is false.

Felony

New York securities fraud laws make it a class-E felony to:

  • Intentionally engage in any systematic, ongoing scheme with intent to defraud or to obtain property from ten or more persons by false or fraudulent pretenses while engaged in inducing or promoting the issuance, distribution, exchange, sale, or purchase of any securities; or

  • intentionally engage in a fraud or make a material false representation during the sale or purchase of any securities.

Penalty

Misdemeanor

In New York, a misdemeanor offense is punishable by a sentence of anywhere between 15 days to one year in prison.

Class-E Felony

Generally, class-E felonies are punishable by a sentence with a maximum of four years, and a minimum of between one year and sixteen months.

Civil Penalties

The attorney general can also file civil cases against offenders of the state's securities fraud laws for the amount that victims were defrauded.

Understanding New York securities fraud laws can be very complicated. If you have been charged by the attorney general for this crime and would like legal assistance, you can contact a New York securities fraud lawyer through FindLaw. Visit FindLaw's sections on securities fraud and other fraud and financial crimes for more articles and information on this topic.

Next Steps: Search for a Local Attorney

Contact a qualified attorney.