Ask Reggi Your Question Now
Can you summarize NYCL GBS Article 21-A?
General Business > Fraudulent Transactions In Securities
Short Summary
The provided legal document content consists of two main sections. The first section governs fraudulent transactions in securities, specifically focusing on the manipulation of prices of stocks, bonds, or other evidences of debt of a corporation, company, or association. It prohibits actions such as pretended purchases and sales, fictitious transactions, or other devices that do not result in a simultaneous change of ownership or interest in the securities. Non-compliance with this provision is considered a misdemeanor offense. The second section governs the hypothecation of customer’s securities. It applies to any person, firm, association, or corporation engaged in the business of purchasing and selling stocks, bonds, or other evidences of debt of corporations, companies, or associations. The provision outlines two scenarios that are considered illegal: 1) Pledging or disposing of customer’s securities without their consent when the broker or dealer does not have any lien or special property in the securities, and 2) Pledging or disposing of customer’s securities for the broker or dealer’s own benefit without the customer’s consent, when the broker or dealer has a lien on the securities for an indebtedness due to them. Violation of this provision is considered a misdemeanor offense.
Whom does it apply to?
Any person who inflates, depresses, or causes fluctuations in the market prices of stocks, bonds, or other evidences of debt of a corporation, company, or association; any person, firm, association, or corporation engaged in the business of purchasing and selling stocks, bonds, or other evidences of debt of corporations, companies, or associations
What does it govern?
Manipulation of prices of securities, hypothecation of customer's securities
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
Misdemeanor offense
Jurisdiction
New York