New York Laws
Article 23-A - Fraudulent Practices in Respect to Stocks, Bonds and Other Securities
359-E - Definitions.

(a) A "dealer" shall mean and include any person, firm, association or
corporation engaged in the business of buying and selling securities
from or to the public within or from this state for his or its own
account, through a broker or otherwise, except a bank unless such bank
is considered a dealer under the federal securities exchange act of
1934, but does not include any person, firm, association or corporation
in so far as he or it buys or sells securities for his or its bona fide
investment account, either individually or in some fiduciary capacity.
The term "dealer" shall, except as otherwise provided in this article,
also include a person, firm, association or corporation selling or
offering for sale from or to the public within or from this state
securities issued by it. No person shall be deemed to be a "dealer", as
defined in this subdivision, or a broker, as defined in subdivision (b)
of this section, solely by reason of the fact that he is engaged in the
business of (i) selling, offering for sale, purchasing or offering to
purchase any security or securities to, from or through any bank, dealer
or broker, or to or from any syndicate, corporation or group formed for
the specific purpose of acquiring such securities for resale to the
public directly or through other syndicates or groups, or (ii) any
offer, sale or distribution by an issuer of stock dividends,
nontransferable warrants or transferable warrants exercisable within
ninety days of their issuance to existing stockholders, securities
issued upon conversion of convertible securities and exercise of
warrants and securities issued as part of a recapitalization or
reclassification to existing stockholders of the same issuer, or (iii)
selling, offering for sale, purchasing or offering to purchase any
security or securities on the floor of any securities exchange
registered as a national securities exchange under the securities
exchange act of nineteen hundred thirty-four. No person, firm,
association or corporation shall be deemed to be a "dealer", as defined
in this subdivision, solely by reason of selling or offering for sale
any security or securities to any bank, corporation, savings
institution, trust company, insurance company, investment company, as
defined in the federal investment company act of nineteen hundred forty,
pension or profit-sharing trust, or other financial institution or
institutional buyer, whether the purchaser is acting for himself or
itself or in some fiduciary capacity, as part of a private placement of
securities.
(b) A "broker" shall mean and include any person, firm, association or
corporation, other than a dealer, engaged in the business of effecting
transactions in securities for the account of others within or from this
state, but does not include a bank unless such bank is considered a
broker under the federal securities exchange act of 1934.
(c) A "salesman" shall mean and include every person employed by a
broker or dealer as said terms are defined in this section, for the
purpose of representing such broker or dealer in the sale or purchase of
securities to or from the public within or from this state.
(d) A "principal" shall mean and include every person or firm directly
or indirectly controlling any broker or dealer.
(e) A "bank" shall mean and include a state or national bank, trust
company or savings institution incorporated under the laws and subject
to the examination, supervision and control of any state or of the
United States or of any insular possession thereof.

2. No dealer or broker shall sell or offer for sale to or purchase or
offer to purchase from the public within or from this state, as
principal, or broker, any securities issued or to be issued unless and
until a notice, to be known as the "state notice," containing the name,
business or post office address of such dealer or broker and if a
corporation the state or country of incorporation thereof, and if a
partnership the names of the partners, shall have been filed in the
department of state. Such notice shall be in the following form:

STATE NOTICE

Name(s) of dealer(s), broker(s) ........................................
Business address(es) or post office address(es) (state which)
........................................................................
If a corporation, the state or country in which incorporated.
........................................................................
If a partnership, the names of the partners ............................
3. It shall be unlawful for any dealer, broker or salesman to sell or
offer for sale to or purchase or offer to purchase from the public
within or from this state, any securities issued or to be issued, unless
and until such dealer, broker or salesman shall have filed with the
department of law a registration statement as provided herein. A real
estate broker or salesman licensed under article twelve-A of the real
property law who is not acting as a dealer shall be deemed to be in
compliance with such registration statement filing requirements with
respect to the sale of securities constituting cooperative interests in
real estate, including shares of cooperative apartment corporations,
commercial cooperative corporations, condominiums, and interests in
homeowners associations.
(a) The registration statement relating to dealers and brokers, to be
known as the "broker-dealer statement" shall contain such information
pertaining to the business history for the last preceding five years,
criminal record, and educational background of the applicant and his or
its partners, officers, directors or other principals thereof deemed
pertinent by the attorney-general. The attorney-general may prescribe
forms for the use of such applicants.
(b) The registration statement relating to salesmen, to be known as
the "salesman's statement," shall contain such information pertaining to
the business history for the last preceding five years, criminal record
and educational background of the applicant deemed pertinent by the
attorney-general. The attorney-general may prescribe forms for use of
such applicants and, as a condition of registration, shall require that
prior to the filing of such a registration statement any such applicant
shall undertake and successfully complete the uniform securities agent
state law examination ("series 63") or the uniform combined state law
examination ("series 66") as administered by or on behalf of the North
American Securities Administrators Association, Inc. (NASAA) by any
national securities association or national securities exchange;
provided that, if an applicant registers with the attorney-general
solely for the purpose of selling condominiums, shares of cooperative
apartment corporations or commercial cooperative corporations, interests
in homeowners associations or interests in timeshare projects, such
applicant shall not be required to undertake the aforementioned
examination as a condition of registration.
(c) The registration of brokers, dealers and salesmen shall be for
periods of four years commencing on January fifth, nineteen hundred
sixty. Such statements for brokers, dealers or salesmen shall be filed
every four years within sixty days prior to the expiration of the four

year period, provided that previously filed statements shall continue to
be effective for a period of ninety days following the end of the four
year period. Initial statements for those having no previous filing may
be made at any time and shall be effective from the date of filing for a
period of four years. All statements filed pursuant to prior provisions
of law shall remain in effect until January fifth, nineteen hundred
sixty.
4. The attorney-general may by rule or order provide for the filing of
supplemental statements prescribed by him which shall contain such
information as the attorney-general may deem necessary to keep
reasonably current the information on file.
5. The department of law shall collect the following fees: (a) twelve
hundred dollars for each broker-dealer's statement; (b) twelve hundred
dollars for each broker-dealer's statement filed by a person, firm,
association or corporation selling or offering for sale from or to the
public within or from this state securities issued by it for any amount
in excess of five hundred thousand dollars; (c) three hundred dollars
for each broker-dealer's statement filed by a person, firm, association
or corporation selling or offering for sale from or to the public within
or from this state securities issued by it for any amount of five
hundred thousand dollars or less; (d) three hundred dollars for each
broker-dealer's statement filed by a person, firm, association or
corporation solely for the purpose of selling or offering for sale from
or to the public within or from this state securities consisting of
condominiums, shares of cooperative apartment corporations or commercial
cooperative corporations, interests in homeowners associations or
interests in timeshare projects, plus fifteen dollars for each partner,
officer, director or principal of any such firm, association or
corporation; (e) one hundred fifty dollars for each salesman's
statement; (f) thirty dollars for each supplemental statement; (g) three
hundred dollars for each application granted pursuant to subdivision two
of section three hundred fifty-nine-f of this article; and (h) two
hundred twenty-five dollars for the issuance of a "no filing required
letter"; these fees shall obtain for both original statements and their
renewals. No fee, however, shall be collected for filing a supplemental
statement by a salesman cancelling his prior registration as such
salesman.
Any partner, officer, director or principal who is named as such in a
broker-dealer statement and who shall act as a salesman for such broker
or dealer, shall not be required to register as a salesman.
6. Any false statement of a material fact contained in any such
broker-dealer or salesman's statement or supplemental statement or in
any certificate attached thereto shall constitute a violation of this
section within the meaning of section three hundred fifty-nine-g of this
article.
7. Any person, partnership, corporation, company, trust or association
representing in any manner that the state, the department of law or any
officer thereof has recommended the purchase of any stocks, bonds, or
other securities, in advertising or offering such stocks, bonds or other
securities for sale shall be guilty of a misdemeanor punishable as
provided in subdivision two of section three hundred fifty-nine-g of
this article.
8. After this subdivision as hereby amended takes effect no dealer
shall sell or offer for sale to the public within this state as
principal or agent, any securities issued or to be issued which are not
exempted from the provisions of this subdivision by section three
hundred and fifty-nine-f hereof unless and until such dealer shall cause
to be filed a "further state notice" containing the information, other

than the names of partners, required to be published by subdivision two
of this section, but opposite the heading "name of dealer", if the
person or persons causing such notice to be filed are acting pursuant to
the provisions of this subdivision, there shall be added either the
words "syndicate manager" or "syndicate managers" as the case may be;
and in addition thereto and as part of each such further state notice
the name of the security or securities, name, post office address and
state or country of incorporation or organization of the corporation,
association, common law trust or similar organization issuing or to
issue the security or securities to be sold or offered for sale, in the
following form:

FURTHER STATE NOTICE

Name of security or securities .........................................
Name of issuer of securities ...........................................
Post Office address of issuer of securities ............................
The state or country in which organized ................................

Two or more dealers may jointly file such further state notice
required by this subdivision, and a dealer or exchange must file a
further state notice for each issue about to be offered which has not
heretofore been published by the issuer. A syndicate manager or
co-manager with an office in this state may file on behalf of an entire
syndicate.
9. A broker-dealer or salesman registration statement or any other
document is filed when it is received in the New York city office of the
attorney-general.
10. The attorney-general may from time to time in the public interest
make, amend, and rescind such forms as are necessary to carry out the
provisions of this act, including forms governing registration
statements and applications. For the purpose of forms, the
attorney-general may classify securities, persons and matters within his
jurisdiction, and may prescribe different forms and requirements for
different classes.
11. It is unlawful for any broker or dealer to employ a salesman
unless the salesman is registered. The registration of a salesman is
suspended during any period when he is not associated with a particular
broker or dealer registered under this act or a particular issuer. When
a salesman begins or terminates a connection with a broker or dealer, or
begins or terminates those activities which make him a salesman, the
salesman as well as the broker or dealer shall promptly notify the
attorney-general.
12. All persons, including partners, officers, directors and salesmen
employed by a member or a member organization of a national securities
exchange, a national securities association, or any other broker-dealer,
registered with the federal securities exchange commission or any broker
or dealer required to be registered with the department of law pursuant
to this article except those dealers required to be registered solely by
reason of the fact that they are engaged in selling or offering for sale
securities issued by themselves, and any employee of a clearing
corporation affiliated with any such registered national securities
exchange or with any national securities association registered with the
federal securities exchange commission, employed on or after September
first, nineteen hundred sixty-nine, who are regularly employed within
the state of New York shall, as a condition of employment, be
fingerprinted. Every set of fingerprints taken pursuant to this
subdivision shall be promptly submitted to the attorney general for

appropriate processing, except that individuals fingerprinted in
compliance with the rules of the securities and exchange commission need
not file with the attorney general so long as records of those
fingerprints, as well as information received in response to their
filing, are available to the attorney general for inspection. The
department of law shall collect from a member or member organization of
a national securities exchange, a national securities association, or
any registered broker-dealer as described above or a clearing
corporation affiliated with any such registered national securities
exchange or with any such registered national securities association
submitting fingerprints to the attorney general for processing a fee in
the amount prescribed therefor by the division of criminal justice
services for each set of fingerprints submitted. Failure to comply with
this section shall be deemed a violation of and a fraudulent practice
within the meaning of this article.
12-a. Any employee of a national securities exchange or national
securities association registered with the federal securities and
exchange commission, and any employee of a clearing corporation or
securities information processor affiliated with any such registered
national securities exchange or national securities association, and who
are regularly employed within the state of New York, shall, as a
condition of employment, be fingerprinted. Every national securities
exchange, national securities association, clearing corporation or
securities information processor that is required to submit fingerprints
pursuant to this section shall also obtain fingerprints from any
individual not employed by such organization who provides services to
such organization within the state of New York provided that the
individual has access to records including electronic records, as
defined by section three hundred two of the state technology law, or
other material or secure buildings or secure property, which place the
security of such organization at risk.
Every set of fingerprints taken pursuant to this subdivision shall be
promptly submitted to the federal bureau of investigation for the
purpose of a nationwide criminal history check. Such reports received
from the federal bureau of investigation shall be kept confidential,
although the contents of any such report may be disclosed to exchange
officials involved in personnel and security matters, to the attorney
general, to law enforcement authorities and to the securities and
exchange commission. Unless inconsistent with federal law, fingerprints
supplied by such employee or employment applicant shall be returned to
such person upon termination or denial of such employment. Fingerprints
supplied by such other individuals providing services shall be returned
upon completion of such services.
12-b. Any employee of a designated contract market, as that term is
defined in the Commodity Exchange Act, under the authority of the
federal Commodity Futures Trading Commission, and any employee of a
derivatives clearing organization, as that term is defined under the
Commodity Exchange Act, that is affiliated with any such designated
contract market, and who are regularly employed within the state of New
York, shall, as a condition of employment, be fingerprinted. Every
designated contract market and derivatives clearing organization that is
required to submit fingerprints pursuant to this section shall also
obtain fingerprints from any individual not employed by such
organization who provides services to such organization within the state
of New York provided that the individual has access to records including
electronic records, as defined by section three hundred two of the state
technology law, or other material or secure buildings or secure
property, which place the security of such organization at risk.

Every set of fingerprints taken pursuant to this subdivision shall be
promptly submitted to the federal bureau of investigation for the
purpose of a nationwide criminal history check. Such reports received
from the federal bureau of investigation shall be kept confidential,
although the contents of any such report may be disclosed to designated
contract market or derivatives clearing organization officials involved
in personnel and security matters, to the attorney general, to law
enforcement authorities and to the Commodity Futures Trading Commission.
Unless inconsistent with federal law, fingerprints supplied by such
employee or employment applicant shall be returned to such person upon
termination or denial of such employment. Fingerprints supplied by such
other individuals providing services shall be returned upon completion
of such services.
13. (a) The attorney general may by regulation, rule or order provide
an alternative method of registration by which any dealer, broker or
salesman acting as such or as principal in more than one state or who
engages in multi-state securities offerings may supply the information
otherwise required to be furnished in the state notice, registration
statement, supplemental statements and further state notice mandated by
subdivisions two, three, four and eight of this section. Such
alternative method, when complied with, shall be deemed to fulfill the
filing requirements of subdivisions two, eight and nine of this section,
and shall be in lieu thereof. The regulation, rule or order of the
attorney general may also provide for alternative filing periods and
expiration dates and an alternate method for the payment of fees, to be
known as "in lieu filing fees", which shall be collected pursuant to
such regulation, rule or order of the attorney general in the same
amounts as, and for the same information otherwise required to be
collected for statements filed as specified by subdivision five of this
section.
(b) No alternative method may be provided by the attorney general
which does not have, as its purpose, the facilitation of a central
registration depository whereby brokers, dealers or salesmen can
centrally or simultaneously register and pay fees for all states in
which they plan to transact business which requires registration. The
attorney general is hereby authorized to enter into an agreement or
otherwise facilitate such alternative method with any national
securities association, national securities exchange, national
association of state securities administrators or similar association or
agents thereof to effectuate the provisions of this subdivision.
(c) Any false statement of a material fact contained in any substitute
for a broker-dealer statement or salesman's statement or supplemental
statement which is provided pursuant to the attorney general's
regulation, rule or order specified in paragraph (a) of this
subdivision, shall constitute a violation of this section within the
meaning of section three hundred fifty-nine-g of this article.
(d) It shall be unlawful for any dealer, broker or salesman to sell or
offer for sale to or purchase or offer to purchase from the public
within or from this state, any securities issued or to be issued, unless
and until such dealer, broker or salesman shall have complied with the
requirements of either: (i) the regulation, rule or order of the
attorney general specified in paragraph (a) of this subdivision; or (ii)
the filing of a state notice and registration statement and supplemental
statements and further state notice as applicable to said dealer, broker
or salesman, in accordance with subdivisions two, three, four and eight
of this section.
(e) To the extent inconsistent therewith, the provisions of this
subdivision shall supersede the provisions of any other subdivision of
this section.
14. (a) Definitions. For purposes of this subdivision the following
definitions shall apply:
(i) "Commodity" means, except as otherwise specified by the attorney
general by rule, regulation or order, any agricultural, grain, animal,
chemical, metal or mineral product or byproduct, any gem or gemstone
(whether characterized as precious, semi-precious or otherwise), any
fuel (whether liquid, gaseous or otherwise), any foreign currency, and
any other good, article, or material.
(ii) "Commodity contract" means any account, agreement or contract for
the purchase or sale of, or any option or right to purchase or sell,
primarily for speculation or investment purposes and not for use or
consumption by the offeree or purchaser, one or more commodities,
whether for immediate or subsequent delivery or for storage and whether
or not delivery is intended by the parties, and whether characterized as
a cash contract, deferred shipment or deferred delivery contract,
forward contract, futures contract, installment or margin contract,
leverage contract, option, privilege, indemnity, bid, offer, put, call,
advance guaranty, decline guaranty or otherwise. Any commodity contract
offered for sale or sold to a person other than a producer, processor,
merchant, handler, commercial user or ultimate consumer of the commodity
shall, in the absence of evidence to the contrary, be presumed to be
offered for sale or sold for speculation or investment purposes.
(iii) "Commodity broker-dealer" means any person engaged in the
business of selling or offering to sell commodities through commodity
contracts to the public within or from the state of New York.
(iv) "Commodity salesperson" means any person employed by or
representing a commodity broker-dealer in selling or offering for sale
commodities through commodity contracts to the public within or from the
state of New York.
(v) "Commodity investment advisor" means any person who, for
compensation, within or from the state of New York, engages in the
business of advising members of the public, either directly or through
publications or writings, as to the advisability of investing in,
purchasing, selling or holding commodity contracts.
(b) Any person acting as a commodity broker-dealer, commodity
salesperson or commodity investment advisor and any person who manages
or supervises any such broker-dealer, salesperson or investment advisor
shall file a registration statement with the attorney general as a
commodity broker-dealer, commodity salesperson, or commodity investment
advisor relating to the activity actually engaged in.
(c) The attorney general may adopt rules and regulations governing the
form and content of such registration statements for each such activity
which may include information pertaining to the business history for the
last preceding five years, record of criminal convictions, litigation
history, and educational background of the registrant and the
registrant's partners, officers, directors or other principals deemed
pertinent by the attorney general and the names of persons employed as
commodity salespersons or commodity investment advisors by the
registrant.
(d) The registration statement shall be effective for a period of one
year from the date of filing.
(e) The attorney general shall by rule or regulation provide for the
method of renewing such registration statements and may require the
filing of supplemental statements which shall contain such information

as the attorney general may deem necessary to keep reasonably current
the information on file.
(f) The attorney general shall collect the following annual fees: one
hundred dollars for each commodity broker-dealer registration statement
or commodity investment advisor registration statement; twenty-five
dollars for each commodity salesperson registration statement; and ten
dollars for each supplemental statement.
(g) The provisions of this subdivision shall not apply to (i) any
person who is a member or member firm of a national securities exchange,
board of trade designated as a contract market by the Commodity Futures
Trading Commission pursuant to the commodity exchange act, as amended,
the National Association of Securities Dealers, Inc., or the National
Futures Association, Inc., or is an affiliate of such a member or member
firm, or employed by such a member or member firm or by an affiliate of
such a member or member firm; (ii) any board of trade designated as a
contract market as aforesaid; (iii) any other person registered,
temporarily licensed, or exempt from registration under the commodity
exchange act, as amended, or the rules and regulations promulgated
thereunder where such registration, license or exemption relates
directly to the activity engaged in; and (iv) any bank or trust company
as defined in this article or any person acting as an employee of any
bank or trust company or any licensed money transmitter or employee
thereof.
(h) In addition to those persons exempt under paragraph (g) of this
subdivision, no person shall be required to register as a commodity
investment advisor pursuant to paragraph (b) of this subdivision who is
(i) a lawyer, accountant, engineer, or teacher who renders investment
advice solely incidental to the practice of his or her profession; (ii)
a broker or dealer in securities or a commodity broker-dealer or a
commodity salesperson who renders investment advice solely incidental to
the conduct of his or her business as a broker or dealer in securities
or a commodity broker-dealer or a commodity salesperson respectively,
and who receives no special compensation for such advice; (iii) a
publisher of, editor of, or writer for a bona fide newspaper or news
magazine, whether published in print or by electronic means; or (iv) a
person who during the course of the preceding twelve months has not
advised more than fifteen persons as to the advisability of investing
in, purchasing, selling or holding commodity contracts and who does not
hold himself out generally to the public as engaging in any of the
activities set forth in subparagraph (iii), (iv) or (v) of paragraph (a)
of this subdivision.
(i) The provisions of this subdivision shall not apply to any contract
or transaction involving the sale of commodities by the owner or lessee
of real property upon which such commodities are grown or raised, the
sale of items by art dealers or licensed auctioneers at public auction
or the sale or resale by a distributor or wholesaler of goods for
consumption by the public.
(j) Any person required to be registered by this subdivision who is
not registered shall be guilty of a misdemeanor punishable as provided
in the penal law.
(k) Any person who engages in a business requiring registration under
this article and who knowingly employs two or more persons for the
purpose of engaging in conduct requiring registration as a commodity
broker-dealer, commodity salesperson or commodity investment advisor
under this article with the knowledge that they are not so registered
shall be guilty of a class E felony.
(l) A violation of this subdivision shall constitute a fraudulent
practice as that term is used in this article.
(m) If any provision of this subdivision or the application thereof to
any persons or circumstances is held invalid, the validity of the
remainder of this subdivision or of the application of such provision to
other persons and circumstances shall not be affected thereby.

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