What's happening
This bill prohibits New York public officials and employees from using nonpublic information gained through their positions for personal financial benefit, including insider trading.
Why it matters
Expands ethical expectations. The bill clarifies and strengthens ethical rules for all branches of New York state government, ensuring legislators, executive branch employees, and judicial officials are explicitly barred from profiting from confidential information gained through their jobs.
Applies insider trading standards to public officials. By stating that public officials owe a duty of trust similar to that required under federal securities law, the bill creates a clear legal basis for holding officials accountable if they misuse nonpublic information for securities trading.
Closes loopholes on IPO access. The law prevents state officials and employees from accessing initial public offerings (IPOs) on terms not available to the general public, targeting a common method for insiders to profit unfairly.
Requires formal guidance and interpretation. The legislation mandates that relevant ethics commissions and advisory committees issue clear guidance to ensure all officials understand their obligations, potentially reducing ambiguity and strengthening enforcement.
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Who cares
State legislators and legislative staff
The bill would require ethics guidance barring private profit from nonpublic official information and establish a duty of trust and confidence for federal insider-trading purposes.
Executive branch officials and state civil service employees
The bill would require guidance against using nonpublic official information for private profit and bar access to initial public offerings on terms unavailable to the general public.
Judges and judicial employees
The bill would apply private-profit ethics guidance, insider-trading duties and restrictions on preferential access to initial public offerings to them.
Legislative Ethics Commission, Joint Commission on Public Ethics and Advisory Committee on Judicial Ethics
Each would be required to issue guidance clarifying restrictions on using nonpublic official information for private profit.
Headline styles
Ban Insider Trading by Officials
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to governmental operations
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
10228
IN ASSEMBLY
March 27, 2020
Introduced by M. of A. BUCHWALD -- read once and referred to the Committee on Governmental Operations
AN ACT to amend the public officers law, in relation to prohibiting public officers and employees from using nonpublic information derived from their official positions for personal benefit
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "New York Stock Act".
§ 2. The public officers law is amended by adding a new article 7-A to read as follows:
ARTICLE 7-A
USE OF NON-PUBLIC INFORMATION FOR
PERSONAL BENEFIT PROHIBITED Section 112. Definitions.
112-a. Prohibition of the use of nonpublic information for
private profit.
112-b. Prohibition of insider trading.
112-c. Other state officials.
112-d. Participation in initial public offerings.
112-e. Rule of construction.
§ 112. Definitions. For purposes of this article, the following terms shall have the following meanings:
1. "member of the legislature" means a member of the New York state senate or New York state assembly.
2. "employee of the legislature" means any officer or employee of the legislature but it shall not include members of the legislature.
3. "executive branch employee" means:
a. any person employed in the civil service of this state;
b. the governor;
c. the lieutenant governor;
d. the comptroller; and
e. the attorney general.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16062-04-0
A. 10228 2
4. "judicial officer" means any judge or other judicial officer of this state.
5. "judicial employee" means any officer or employee of the judiciary but it shall not include judicial officers.
§ 112-a. Prohibition of the use of nonpublic information for private profit. The legislative ethics commission shall issue interpretive guidance of the relevant rules of each chamber, including rules on conflicts of interest and gifts, clarifying that a member of the legislature and an employee of the legislature may not use nonpublic information derived from such person's position as a member of the legislature or employee of the legislature or gained from the performance of such person's official responsibilities as a means for making a private profit.
§ 112-b. Prohibition of insider trading. Subject to the rule of construction under section one hundred twelve-e of this article and solely for the purposes of insider trading prohibitions arising under the Securities Exchange Act of 1934, each member of the legislature or employee of the legislature owes a duty arising from a relationship of trust and confidence to the legislature, the state, and the citizens of this state with respect to material, nonpublic information derived from such person's position as a member of the legislature or employee of the legislature or gained from the performance of such person's official responsibilities.
§ 112-c. Other state officials. 1. a. The joint commission on public ethics shall issue such interpretive guidance of the relevant state ethics statutes and regulations, including the standards of ethical conduct for executive branch employees, related to use of nonpublic information, as necessary to clarify that no executive branch employee may use nonpublic information derived from such person's position as an executive branch employee or gained from the performance of such person's official responsibilities as a means for making a private profit.
b. The advisory committee on judicial ethics shall issue such interpretive guidance of the relevant ethics rules applicable to judicial officers, as necessary to clarify that no judicial officer may use nonpublic information derived from such person's position as a judicial officer or gained from the performance of such person's official responsibilities as a means for making a private profit.
c. The advisory committee on judicial ethics shall issue such interpretive guidance of the relevant ethics rules applicable to judicial employees as necessary to clarify that no judicial employee may use nonpublic information derived from such person's position as a judicial employee or gained from the performance of such person's official responsibilities as a means for making a private profit.
2. Subject to the rule of construction under section one hundred twelve-e of this article and solely for the purposes insider trading prohibitions arising under the Securities Exchange Act of 1934, each executive branch employee, each judicial officer, and each judicial employee owes a duty arising from a relationship of trust and confidence to this state and the citizens of this state with respect to material, nonpublic information derived from such person's position as an executive branch employee, judicial officer, or judicial employee or gained from the performance of such person's official responsibilities.
§ 112-d. Participation in initial public offerings. No person set forth in section one hundred twelve of this article may purchase securities that are the subject of an initial public offering in any manner other than is available to members of the public generally.
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§ 112-e. Rule of construction. Nothing in this article or the interpretive guidance to be issued pursuant to this article shall be construed to:
1. impair or limit the construction of the antifraud provisions of the securities laws or the Commodity Exchange Act or the authority of the Securities and Exchange Commission or the Commodity Futures Trading Commission under those provisions;
2. be in derogation of the obligations, duties, and functions of a member of the legislature, an employee of the legislature, an executive branch employee, a judicial officer, or a judicial employee, arising from such person's official position; or
3. be in derogation of existing laws, regulations, or ethical obligations governing members of the legislature, employees of the legislature, executive branch employees, judicial officers, or judicial employees.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.