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History
- Referred to banks
- Referred to banks
Full text
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Title of bill
An act to amend the banking law, in relation to false statements or rumors as to financial institutions
Purpose or general idea of bill
Relates to false statements or rumors as to financial institutions and creates another class of crime.
Summary of specific provisions
Amends section 671 of the banking law, as added by chapter 1031 of the laws of 1965, relating to circulation or transmission of false statements or rumors as to financial institutions. Raises such statements to an A misdemeanor, or an E felony in the case of repeat offenders or where false statements undermine the solvency of the institution
Justification
Attempts to manipulate securities prices by spreading false information can wreak havoc on targeted companies, but when such an attack is targeted at a bank or financial institution, it can undermine the stability of the entire financial market and create the kind of panic that modem banking and securities laws are designed to prevent The U.S. Securities and Exchange Commission is currently investigating whether false rumors were circulated by investors seeking to profit from declines in stocks issued by Bear Steams. That investment bank was forced to sell itself to JP Morgan in March 2008 at a fraction of its value a week earlier after concerns about its solvency sparked a panic among investors. This bill will discourage this kind of destructive and illegal behavior by increasing the penalties for false banking rumors.
Legislative history
2008 - S.7741 - Referred to Banks
Fiscal implications
No costs to the state.
Effective date
This act shall take effect on the first of November next succeeding the date on which it shall become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.