The New York State Senate is expected to consideration to senate bill S.5768. The legislation would authorize private litigation to enforce New York’s securities law, the Martin Act, and would result in dramatic expansion of liability.  ATRA strongly encourages members with a presence in New York to engage their local lobbyist and/or counsel and have them reach out to Senate Majority Conference Leader Sampson to urge opposition to the legislation.  For additional information, please contact Walter Pacholczak of the Business Council of New York State at walter.pacholczak@bcnys.org.

By way of background, under current law, institutional investors have the opportunity to seek redress through litigation under both federal securities law as well as New York common law.  In contrast to the Martin Act, New York common law claims for fraud and negligent misrepresentation must meet substantial burdens of proof.  We believe that the balance struck by the common law with regard to protection of investors on the one hand versus the need to guard against excessive and unnecessary litigation is an appropriate one.  The Martin Act, with its broad definition of fraud and lower burden of proof, is better suited as a basis for regulator enforcement than it is for private litigation.

Litigation Funding: A. 7891

A. 7891 was discharged from the Assembly Codes Committee and referred to the Assembly Rules Committee.  ATRA strongly opposes the legislation as it would legitimize third party financing of litigation, and we encourage members with a presence in New York to engage their local lobbyist and/or counsel to urge Assembly members to oppose this legislation.  Please coordinate with Walter Pacholczak of the Business Council of New York State at walter.pacholczak@bcnys.org.