What's happening
This bill adds a new statute of limitations for actions by the Attorney General regarding securities fraud and related violations.
Why it matters
Clarifies and strengthens the Attorney General’s authority. By explicitly setting a statute of limitations for actions under article 23-A of the General Business Law and section 63(12) of the Executive Law, the bill provides clearer rules for when the Attorney General can bring civil cases related to securities fraud.
Impacts timing of enforcement. This amendment directly affects how long after a suspected violation the state can take legal action, which can influence both the deterrence of wrongdoing and the ability of victims to see justice served.
Could affect past and future cases. By establishing or clarifying the time period for bringing actions, the bill may influence ongoing investigations, cases that have not yet been prosecuted, and how businesses and individuals assess their legal risks.
Potentially increases accountability in financial markets. With a defined window for prosecution, there may be greater pressure on companies and individuals to comply with securities laws, knowing the Attorney General has a set period to act on violations.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Extend Fraud Lawsuit Deadlines
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Signed chap.184
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading rules cal.614
- Substituted for A8318
- Referred to codes
- Delivered to assembly
- Passed senateVote 62–0
- Ordered to third reading cal.1737
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Extend Fraud Lawsuit Deadlines
Assembly Floor Calendar · Sponsor Robert C. Carroll
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6536
2019-2020 Regular Sessions
IN SENATE
June 15, 2019
Introduced by Sen. GIANARIS -- (at request of the Attorney General) -read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the civil practice law and rules, in relation to the statute of limitations for certain crimes related to fraudulent practices in respect to stocks, bonds and other securities
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 213 of the civil practice law and rules is amended by adding a new subdivision 9 to read as follows:
9. an action by the attorney general pursuant to article twenty-three-A of the general business law or subdivision twelve of section sixty-three of the executive law.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11030-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the civil practice law and rules, in relation to the statute of limitations for certain crimes related to fraudulent practices in respect to stocks, bonds and other securities
Justification
For decades, courts in New York followed the precedent that claims brought under the Martin Act and under Section 63(12) of the State's Executive Law had six-year statutes of limitation. The Martin Act is one of the state's most powerful tools to prosecute financial fraud, and Section 63(12) is the cornerstone of the state's consumer protection laws. This six-year timeline was essential to some of the most meaning- ful cases that have reined in Wall Street excesses, halted fraudulent practices, and returned millions of dollars to defrauded consumers and investors. A recent Court of Appeals decision overturned this precedent, finding that the statute of limitations should be reduced to three years instead of six for Martin Act violations and fraud under the Executive Law other than common law fraud. This turned on its head literally decades of case law. The Court of Appeals ruling jeopardizes the state's ability, through the Office of Attorney General ("OAG"), to protect investors and consumers, prevent bad practices, and hold companies accountable for fraud and illegal conduct. It also impairs the OAG's ability to recover relief for consumers harmed by such conduct.
As it currently stands, a three year statute of limitations is signif- icantly shorter than that of many comparable state statutes of limita- tion. Many states have no statute of limitations for attorney general actions involving consumer frauds, while others have a six-year or long- er statutes of limitations. Other enforcement agencies also have longer statute of limitations periods. For example, the Securities and Exchange Commission has no statute of limitations for equitable remedies and a five-year statute of limitations for civil penalties. A six-year statute of limitations would ensure that OAG is able to operate on equal footing with other agencies, which is of paramount importance given the reduced enforcement activity that has taken place during the Trump Adminis- tration. Correcting this is critical to maintaining OAG's status as a preeminent enforcer of consumer protection and securities law in New York State.
Read the full memo (623 words)
Important cases involving financial fraud or other fraudulent or illegal conduct often take time to develop and involve extensive investigations often in novel areas of business practices. Electronic discovery, which often requires significant time to collect, review, and produce, is often a major source of delay. In some cases, targets of fraud place roadblocks in the path of the OAG's collection of key evidence, necessi- tating motions to compel compliance, which can further delay the filing of a lawsuit. Returning to a six-year statute of limitations would allow OAG a reasonable amount of time to investigate cases of fraud.
Clarifying that the statute of limitations for claims under the Martin Act and Executive Law is six years will allow New York State to better protect investors and consumers, obtain more relief for consumers, and bring its authority in line with other states and enforcement agencies. This timeline is critical to the work of the OAG and has previously allowed it to pursue justice including in the office's landmark cases on residential mortgage backed securities following the 2008 financial crisis. These settlements resulted in over a billion dollars for the state and included millions of dollars in consumer relief and cash for legal services and housing counseling for victims of Hurricane Sandy. This legislation will facilitate OAG to continue to work on financial and other fraud cases with substantial impact and achieve better results for New York State and its residents.
Fiscal implications
EFFECTIVE DATE: This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.