S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4954
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 19, 2021
                                ___________
 
 Introduced  by  Sen.  MYRIE  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general  business  law,  in  relation  to  fraud  in
   connection with an abnormal disruption of the market
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general business law is amended by adding a new article
 23-C to read as follows:
                                ARTICLE 23-C
       FRAUD IN CONNECTION WITH AN ABNORMAL DISRUPTION OF THE MARKET
 SECTION 359-N. DEFINITIONS.
         359-O. FRAUD IN CONNECTION WITH AN ABNORMAL  DISRUPTION  OF  THE
                  MARKET.
   §  359-N.  DEFINITIONS.  AS  USED IN THIS ARTICLE, THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   1. "ABNORMAL DISRUPTION OF THE MARKET" SHALL MEAN ANY  CHANGE  IN  THE
 MARKET,  WHETHER  ACTUAL OR IMMINENTLY THREATENED, RESULTING FROM STRESS
 OF WEATHER, CONVULSION OF NATURE, FAILURE OR SHORTAGE OF ELECTRIC  POWER
 OR OTHER SOURCE OF ENERGY, STRIKE, CIVIL DISORDER, WAR, MILITARY ACTION,
 NATIONAL OR LOCAL EMERGENCY, OR OTHER CAUSE OF AN ABNORMAL DISRUPTION OF
 THE  MARKET  WHICH RESULTS IN THE DECLARATION OF A STATE OF EMERGENCY BY
 THE GOVERNOR.
   2.  "SUPERINTENDENT"  SHALL  MEAN  THE  SUPERINTENDENT  OF   FINANCIAL
 SERVICES.
   §  359-O.  FRAUD  IN  CONNECTION  WITH  AN  ABNORMAL DISRUPTION OF THE
 MARKET.  1. IN ADDITION TO ANY LIABILITY FOR DAMAGES OR A CIVIL  PENALTY
 IMPOSED  PURSUANT  TO ARTICLE TWENTY-ONE-A, SECTIONS THREE HUNDRED THIR-
 TY-NINE-C,  THREE  HUNDRED  FORTY-NINE,  THREE  HUNDRED  FIFTY-C,  THREE
 HUNDRED  FIFTY-D,  THREE  HUNDRED FIFTY-TWO, THREE HUNDRED NINETY-C, AND
 THREE HUNDRED NINETY-SIX-R OF THIS CHAPTER, REGARDING PURCHASES OR SALES
 OF SECURITIES OR COMMODITIES, DECEPTIVE  PRACTICES,  FALSE  ADVERTISING,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09574-01-1

 S. 4954                             2
 
 AND ANTI-PHISHING; SECTION ONE THOUSAND THREE HUNDRED THREE OF THE BUSI-
 NESS  CORPORATION  LAW,  REGARDING  PROCEEDINGS  BY THE ATTORNEY GENERAL
 RELATING TO FOREIGN CORPORATION ACTIVITY WITHIN THE STATE; SECTION  FOUR
 HUNDRED  EIGHT  OF THE FINANCIAL SERVICES LAW, REGARDING FINANCIAL FRAUD
 PREVENTION; SECTION FORTY-FOUR OF THE BANKING LAW, REGARDING UNSAFE  AND
 UNSOUND  BANKING  PRACTICES; SECTION FOUR HUNDRED THREE OF THE INSURANCE
 LAW, REGARDING FRAUDULENT INSURANCE  ACTS;  AND  SUBDIVISION  TWELVE  OF
 SECTION  SIXTY-THREE  OF THE EXECUTIVE LAW, REGARDING PROCEEDINGS BY THE
 ATTORNEY GENERAL FOR EQUITABLE  RELIEF  AGAINST  FRAUDULENT  OR  ILLEGAL
 CONSUMER  FRAUD,  A  PARTNERSHIP, CORPORATION, COMPANY, TRUST OR ASSOCI-
 ATION, OR ANY AGENT OR EMPLOYEE THEREOF,  WHO  ENGAGES  IN  ANY  CONDUCT
 PROHIBITED  BY  SAID PROVISIONS OF LAW, AND WHOSE CONDUCT IS PERPETRATED
 IN CONNECTION WITH, AND WITH THE INTENT  TO  UNLAWFULLY  GAIN  FROM,  AN
 ABNORMAL DISRUPTION OF THE MARKET, MAY BE LIABLE FOR AN ADDITIONAL CIVIL
 PENALTY.
   2.  (A)  IN DETERMINING WHETHER TO IMPOSE A SUPPLEMENTAL CIVIL PENALTY
 PURSUANT TO SUBDIVISION ONE OF THIS SECTION, THE COURT  SHALL  CONSIDER,
 IN ADDITION TO OTHER APPROPRIATE FACTORS:
   (1)  WHETHER  THE DEFENDANT KNEW THAT THE DEFENDANT'S CONDUCT WAS MADE
 IN CONNECTION WITH AN ABNORMAL DISRUPTION OF THE MARKET WITH  AN  INTENT
 TO  UNLAWFULLY  GAIN  FROM  SUCH  DISRUPTION  OR WHETHER THE DEFENDANT'S
 CONDUCT WAS IN WILLFUL DISREGARD TO AN ABNORMAL DISRUPTION OF THE MARKET
 WITH AN INTENT TO UNLAWFULLY GAIN FROM SUCH DISRUPTION;
   (2) WHETHER THE DEFENDANT'S CONDUCT CAUSED  A  PERSON  OR  PERSONS  TO
 SUFFER  LOSS OR ENCUMBRANCE OF A PRIMARY RESIDENCE, PRINCIPAL EMPLOYMENT
 OR SOURCE OF INCOME, PAYMENTS RECEIVED UNDER  A  PENSION  OR  RETIREMENT
 PLAN  OR  A  GOVERNMENT  BENEFITS PROGRAM, ASSETS ESSENTIAL TO HEALTH OR
 WELFARE; OR
   (3) ANY OTHER SUBSTANTIAL ECONOMIC DAMAGE RESULTING FROM  THE  DEFEND-
 ANT'S CONDUCT.
   (B)  IN  DETERMINING  THE  AMOUNT  OF  ANY  SUPPLEMENTAL CIVIL PENALTY
 IMPOSED PURSUANT PARAGRAPH (A) OF THIS SUBDIVISION, THE COURT SHALL MAKE
 A FINDING AS TO THE AMOUNT OF THE  DEFENDANT'S  UNLAWFUL  GAIN  MADE  IN
 CONNECTION  WITH  THE  ABNORMAL  DISRUPTION OF THE MARKET. IF THE RECORD
 DOES NOT CONTAIN SUFFICIENT EVIDENCE TO  SUPPORT  SUCH  A  FINDING,  THE
 COURT MAY CONDUCT A HEARING UPON SUCH ISSUES. AFTER MAKING SUCH FINDING,
 THE  COURT SHALL IMPOSE A CIVIL PENALTY OF THREE TIMES THE AMOUNT OF THE
 DEFENDANT'S GAIN OR TWENTY-FIVE THOUSAND DOLLARS, WHICHEVER  IS  GREATER
 AND, WHERE APPROPRIATE, ORDER RESTITUTION TO AGGRIEVED PARTIES.
   3.  (A) WHERE A VIOLATION OF THIS SECTION IS ALLEGED TO HAVE OCCURRED,
 THE ATTORNEY GENERAL MAY APPLY IN THE NAME OF THE PEOPLE OF THE STATE OF
 NEW YORK TO THE SUPREME COURT OF THE STATE OF NEW YORK WITHIN THE  JUDI-
 CIAL  DISTRICT IN WHICH SUCH VIOLATIONS ARE ALLEGED TO HAVE OCCURRED, ON
 NOTICE OF FIVE DAYS, FOR AN ORDER ENJOINING OR RESTRAINING COMMISSION OR
 CONTINUANCE OF THE ALLEGED UNLAWFUL ACTS. IN ANY  SUCH  PROCEEDING,  THE
 COURT  SHALL  IMPOSE A CIVIL PENALTY IN ACCORDANCE WITH PARAGRAPH (A) OF
 SUBDIVISION TWO OF THIS SECTION AND, WHERE APPROPRIATE,  ORDER  RESTITU-
 TION TO AGGRIEVED PARTIES.
   (B) WITHOUT LIMITING ANY INVESTIGATORY OR ENFORCEMENT POWER GRANTED TO
 THE SUPERINTENDENT UNDER ANY OTHER PROVISION OF THE LAW, THE SUPERINTEN-
 DENT  MAY  UNDERTAKE AN INVESTIGATION IF THE DEPARTMENT HAS A REASONABLE
 SUSPICION THAT A PERSON OR ENTITY HAS ENGAGED, OR IS ENGAGING, IN  FRAUD
 OR MISCONDUCT IN CONNECTION WITH VIOLATIONS OF THIS SECTION.  THE SUPER-
 INTENDENT  MAY,  IN  A PROCEEDING AFTER NOTICE AND A HEARING, REQUIRE AN
 ENTITY SUBJECT TO INVESTIGATION OR ENFORCEMENT OF THE SUPERINTENDENT, TO
 PAY TO THE STATE A PENALTY NOT  TO  EXCEED  FIVE  THOUSAND  DOLLARS  PER

 S. 4954                             3
 
 OFFENSE  FOR  ANY  VIOLATION OF THIS SECTION, ANY REGULATION PROMULGATED
 THEREUNDER, ANY FINAL OR TEMPORARY  ORDER  ISSUED  PURSUANT  TO  SECTION
 THIRTY-NINE  OF THE BANKING LAW, ANY CONDITION IMPOSED IN WRITING BY THE
 SUPERINTENDENT  IN  CONNECTION  WITH  THE  GRANT  OF  ANY APPLICATION OR
 REQUEST, OR ANY WRITTEN AGREEMENT ENTERED INTO WITH THE  SUPERINTENDENT.
 THE  SUPERINTENDENT,  IN  DETERMINING THE AMOUNT OF ANY PENALTY ASSESSED
 PURSUANT TO THIS SECTION, SHALL TAKE INTO CONSIDERATION  THE  NET  WORTH
 AND ANNUAL BUSINESS VOLUME OF THE SUBJECT OF SAID INVESTIGATION.
   §  2.  This  act shall take effect on the thirtieth day after it shall
 have become a law. Effective immediately, the superintendent  of  finan-
 cial  services  may  make  regulations and take other actions reasonably
 necessary to implement this act on such effective date.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4954--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 19, 2021
                                ___________
 
 Introduced  by  Sens.  MYRIE, BROUK, KRUEGER, REICHLIN-MELNICK, SALAZAR,
   SKOUFIS, THOMAS -- read twice and ordered printed, and when printed to
   be committed to the Committee on Consumer Protection -- recommitted to
   the Committee on Consumer Protection in accordance with Senate Rule 6,
   sec. 8 -- committee discharged, bill  amended,  ordered  reprinted  as
   amended and recommitted to said committee
 
 AN ACT to amend the general business law and the financial services law,
   in  relation to fraud in connection with an abnormal disruption of the
   market
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivisions  (b)  and  (c) of section 349 of the general
 business law, as added by chapter 43 of the laws of 1970, are amended to
 read as follows:
   (b) Whenever the attorney general shall believe from  evidence  satis-
 factory  to him OR HER that any person, firm, corporation or association
 or agent or employee thereof has engaged in or is about to engage in any
 of the acts or practices stated to be unlawful he OR SHE  may  bring  an
 action  in the name and on behalf of the people of the state of New York
 to enjoin such unlawful acts or practices and to obtain  restitution  of
 any  moneys  or  property  obtained  directly  or indirectly by any such
 unlawful acts or practices. In such action  preliminary  relief  may  be
 granted  under  article sixty-three of the civil practice law and rules.
 PROVIDED FURTHER THAT, WHENEVER THE ATTORNEY GENERAL SHALL BELIEVE  FROM
 EVIDENCE  SATISFACTORY TO HIM OR HER THAT A FIRM, CORPORATION OR ASSOCI-
 ATION OR AGENT OR EMPLOYEE THEREOF HAS ENGAGED IN ANY  OF  THE  ACTS  OR
 PRACTICES  STATED  TO BE UNLAWFUL IN CONNECTION WITH AND WITH THE INTENT
 TO UNLAWFULLY GAIN FROM AN ABNORMAL DISRUPTION OF THE MARKET AS  DEFINED
 IN  SECTION  THREE  HUNDRED  NINETY-SIX-R OF THIS CHAPTER, HE OR SHE MAY
 BRING AN ACTION ON BEHALF OF THE PEOPLE OF THE  STATE  OF  NEW  YORK  TO

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09574-02-2
 S. 4954--A                          2
              

 
 RECOVER  THREE  TIMES  THE ACTUAL DAMAGES PROVED OR TWENTY-FIVE THOUSAND
 DOLLARS, WHICHEVER IS GREATER.
   (c) Before any violation of this section is sought to be enjoined, the
 attorney  general shall be required to give the person against whom such
 proceeding is contemplated notice by certified mail and  an  opportunity
 to show in writing within five business days after receipt of notice why
 proceedings  should  not  be  instituted  against him OR HER, unless the
 attorney general shall find, in any  case  in  which  he  OR  SHE  seeks
 preliminary  relief,  that to give such notice and opportunity is not in
 the public interest.
   § 2. Section 408 of the financial services law is amended to  read  as
 follows:
   § 408. Civil penalty. (a) In addition to any civil or criminal liabil-
 ity  provided  by law, the superintendent may, after notice and hearing,
 levy a civil penalty:
   (1) not to exceed five thousand dollars per offense, for:
   (A) any intentional fraud or intentional misrepresentation of a  mate-
 rial  fact  with  respect to a financial product or service or involving
 any person offering  to  provide  or  providing  financial  products  or
 services; [or]
   (B)  any  violation of state or federal fair debt collection practices
 or federal or state fair lending laws; [and] OR
   (C) A FIRM, CORPORATION OR ASSOCIATION OR AGENT  OR  EMPLOYEE  THEREOF
 INTENTIONALLY  ENGAGING IN FRAUD OR MISCONDUCT WITH RESPECT TO THE BANK-
 ING LAW, THE INSURANCE LAW, THE PROVISIONS OF THIS CHAPTER OR OTHER LAWS
 OR ANY FINAL OR TEMPORARY ORDER ISSUED PURSUANT TO WHICH THE SUPERINTEN-
 DENT HAS INVESTIGATORY OR ENFORCEMENT POWERS,  IN  CONNECTION  WITH  AND
 WITH  THE  INTENT  TO UNLAWFULLY GAIN FROM AN ABNORMAL DISRUPTION OF THE
 MARKET AS DEFINED IN SECTION THREE HUNDRED NINETY-SIX-R OF  THE  GENERAL
 BUSINESS LAW; AND
   (2) not to exceed one thousand dollars for any other violation of this
 chapter  or the regulations issued thereunder, provided that there shall
 be no civil penalty under this section for violations of article five of
 this chapter or the regulations issued thereunder; and
   (3) provided, however, that, WITH THE EXCEPTION OF SUBPARAGRAPH (C) OF
 PARAGRAPH ONE OF THIS SUBSECTION:
   (A) penalties for regulated persons under the banking law shall be  as
 provided  for  in  the  banking  law and penalties for regulated persons
 under the insurance law shall be as provided for in the  insurance  law;
 and
   (B)  the  superintendent shall not impose or collect any penalty under
 this section in addition to any penalty or fine  for  the  same  act  or
 omission that is imposed under the insurance law or banking law; and
   (C) nothing in this section shall affect the construction or interpre-
 tation  of  the term "fraud" as it is used in any other provision of the
 consolidated or unconsolidated law.
   (b) Civil penalties received by the superintendent  pursuant  to  this
 section  shall  be applied on an annual basis as follows: funds shall be
 applied first to reduce the assessments  charged  on  persons  regulated
 under  the  insurance  law  and  the banking law pursuant to section two
 hundred six of this chapter up to the full amount paid by persons  regu-
 lated under the insurance law and banking law for the operating expenses
 of the financial frauds and consumer protection unit not attributable to
 regulation  under  the  insurance  or banking law for the fiscal year in
 which such penalties are received, such amount shall be applied  to  any
 assessment  in the following year, and any remaining funds shall be paid
 S. 4954--A                          3
 
 to the general fund. The superintendent shall have discretion to  deter-
 mine  how  operating expenses which are not solely attributable to regu-
 lating persons under either the insurance law or the banking  law  shall
 be allocated.
   (C)  (1) PRIOR TO LEVYING A CIVIL PENALTY PURSUANT TO SUBPARAGRAPH (C)
 OF PARAGRAPH ONE OF SUBSECTION (A) OF THIS SECTION,  THE  SUPERINTENDENT
 SHALL CONSIDER, IN ADDITION TO OTHER APPROPRIATE FACTORS:
   (A)  WHETHER  THE SUBJECT OF THE INVESTIGATION KNEW THAT THEIR CONDUCT
 WAS MADE IN CONNECTION WITH AN ABNORMAL DISRUPTION OF THE MARKET WITH AN
 INTENT TO UNLAWFULLY GAIN FROM SUCH DISRUPTION OR  WHETHER  THE  DEFEND-
 ANT'S  CONDUCT WAS IN WILLFUL DISREGARD TO AN ABNORMAL DISRUPTION OF THE
 MARKET WITH AN INTENT TO UNLAWFULLY GAIN FROM SUCH DISRUPTION;
   (B) WHETHER THE CONDUCT OF THE SUBJECT OF THE INVESTIGATION  CAUSED  A
 PERSON  OR PERSONS TO SUFFER LOSS OR ENCUMBRANCE OF A PRIMARY RESIDENCE,
 PRINCIPAL EMPLOYMENT OR SOURCE OF  INCOME,  PAYMENTS  RECEIVED  UNDER  A
 PENSION  OR  RETIREMENT PLAN OR A GOVERNMENT BENEFITS PROGRAM, OR ASSETS
 ESSENTIAL TO HEALTH OR WELFARE;
   (C) ANY OTHER SUBSTANTIAL ECONOMIC DAMAGE RESULTING FROM  THE  CONDUCT
 OF THE SUBJECT OF THE INVESTIGATION; AND
   (D)  THE  NET  WORTH  AND ANNUAL BUSINESS VOLUME OF THE SUBJECT OF THE
 INVESTIGATION.
   (2) IN DETERMINING  THE  AMOUNT  OF  ANY  SUPPLEMENTAL  CIVIL  PENALTY
 IMPOSED  PURSUANT SUBPARAGRAPH (C) OF PARAGRAPH ONE OF SUBSECTION (A) OF
 THIS SECTION, THE SUPERINTENDENT SHALL MAKE A FINDING, AFTER NOTICE  AND
 HEARING  IS  PROVIDED,  AS  TO  THE  AMOUNT OF THE UNLAWFUL GAIN MADE IN
 CONNECTION WITH THE ABNORMAL DISRUPTION OF THE MARKET BY THE SUBJECT  OF
 THE INVESTIGATION.
   §  3.  This  act shall take effect on the thirtieth day after it shall
 have become a law. Effective immediately, the superintendent  of  finan-
 cial  services  and  the  attorney general may make regulations and take
 other actions reasonably necessary to implement this act on such  effec-
 tive date.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4954--B
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 19, 2021
                                ___________
 
 Introduced  by  Sens.  MYRIE,  BROUK,  KRUEGER, RAMOS, REICHLIN-MELNICK,
   SALAZAR, SKOUFIS, THOMAS -- read twice and ordered printed,  and  when
   printed  to  be  committed  to the Committee on Consumer Protection --
   recommitted to the Committee on Consumer Protection in accordance with
   Senate Rule 6, sec. 8 -- committee discharged, bill  amended,  ordered
   reprinted  as  amended  and recommitted to said committee -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the general business law and the financial services law,
   in relation to fraud in connection with an abnormal disruption of  the
   market
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 350-d of the general business law,  as  amended  by
 chapter 208 of the laws of 2007, is amended to read as follows:
   §  350-d.  Civil penalty. (A) Any person, firm, corporation or associ-
 ation or agent or employee thereof who engages in any  of  the  acts  or
 practices  stated  in  this  article to be unlawful shall be liable to a
 civil penalty of not more than five thousand dollars for each violation,
 which shall accrue to the state of New York and may be  recovered  in  a
 civil  action  brought  by  the  attorney general. In any such action it
 shall be a complete defense that the advertisement  is  subject  to  and
 complies  with  the  rules and regulations of, and the statutes adminis-
 tered by the Federal Trade Commission or any official department,  divi-
 sion, commission or agency of the state of New York.
   (B)  PROVIDED,  HOWEVER,  THAT ANY FIRM, CORPORATION OR ASSOCIATION OR
 AGENT OR EMPLOYEE THEREOF WHO ENGAGES IN ANY OF THE  ACTS  OR  PRACTICES
 STATED  IN SECTION THREE HUNDRED FORTY-NINE OF THIS ARTICLE TO BE UNLAW-
 FUL IN CONNECTION WITH AN ABNORMAL DISRUPTION OF THE MARKET  AS  DEFINED
 IN SECTION THREE HUNDRED NINETY-SIX-R OF THIS CHAPTER SHALL BE LIABLE TO
 A  CIVIL  PENALTY  OF  NOT  MORE  THAN FIFTEEN THOUSAND DOLLARS FOR EACH
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09574-04-2
              

 S. 4954--B                          2
 
 VIOLATION OR THREE TIMES THE ACTUAL  RESTITUTION  NEEDED,  WHICHEVER  IS
 GREATER,  WHICH  SHALL ACCRUE TO THE STATE OF NEW YORK AND MAY BE RECOV-
 ERED IN A CIVIL ACTION BROUGHT BY THE  ATTORNEY  GENERAL.  IN  ANY  SUCH
 ACTION  IT SHALL BE A COMPLETE DEFENSE THAT THE ADVERTISEMENT IS SUBJECT
 TO AND COMPLIES WITH THE RULES AND  REGULATIONS  OF,  AND  THE  STATUTES
 ADMINISTERED BY THE FEDERAL TRADE COMMISSION OR ANY OFFICIAL DEPARTMENT,
 DIVISION, COMMISSION OR AGENCY OF THE STATE OF NEW YORK.
   §  2.  Section 408 of the financial services law is amended to read as
 follows:
   § 408. Civil penalty. (a) In addition to any civil or criminal liabil-
 ity provided by law, the superintendent may, after notice  and  hearing,
 levy a civil penalty:
   (1) not to exceed five thousand dollars per offense, for:
   (A)  any intentional fraud or intentional misrepresentation of a mate-
 rial fact with respect to a financial product or  service  or  involving
 any  person  offering  to  provide  or  providing  financial products or
 services; [or]
   (B) any violation of state or federal fair debt  collection  practices
 or federal or state fair lending laws; [and] OR
   (C)  A  FIRM,  CORPORATION OR ASSOCIATION OR AGENT OR EMPLOYEE THEREOF
 INTENTIONALLY ENGAGING IN FRAUD OR MISCONDUCT WITH RESPECT TO THE  BANK-
 ING LAW, THE INSURANCE LAW, THE PROVISIONS OF THIS CHAPTER OR OTHER LAWS
 OR ANY FINAL OR TEMPORARY ORDER ISSUED PURSUANT TO WHICH THE SUPERINTEN-
 DENT  HAS  INVESTIGATORY  OR  ENFORCEMENT POWERS, IN CONNECTION WITH AND
 WITH THE INTENT TO UNLAWFULLY GAIN FROM AN ABNORMAL  DISRUPTION  OF  THE
 MARKET  AS  DEFINED IN SECTION THREE HUNDRED NINETY-SIX-R OF THE GENERAL
 BUSINESS LAW;
   (2) not to exceed one thousand dollars for any other violation of this
 chapter or the regulations issued thereunder, provided that there  shall
 be no civil penalty under this section for violations of article five of
 this chapter or the regulations issued thereunder; and
   (3) provided, however, that, WITH THE EXCEPTION OF SUBPARAGRAPH (C) OF
 PARAGRAPH ONE OF THIS SUBSECTION:
   (A)  penalties for regulated persons under the banking law shall be as
 provided for in the banking law  and  penalties  for  regulated  persons
 under  the  insurance law shall be as provided for in the insurance law;
 and
   (B) the superintendent shall not impose or collect any  penalty  under
 this  section  in  addition  to  any penalty or fine for the same act or
 omission that is imposed under the insurance law or banking law; and
   (C) nothing in this section shall affect the construction or interpre-
 tation of the term "fraud" as it is used in any other provision  of  the
 consolidated or unconsolidated law.
   (b)  Civil  penalties  received by the superintendent pursuant to this
 section shall be applied on an annual basis as follows: funds  shall  be
 applied  first  to  reduce  the assessments charged on persons regulated
 under the insurance law and the banking  law  pursuant  to  section  two
 hundred  six of this chapter up to the full amount paid by persons regu-
 lated under the insurance law and banking law for the operating expenses
 of the financial frauds and consumer protection unit not attributable to
 regulation under the insurance or banking law for  the  fiscal  year  in
 which  such  penalties are received, such amount shall be applied to any
 assessment in the following year, and any remaining funds shall be  paid
 to  the general fund. The superintendent shall have discretion to deter-
 mine how operating expenses which are not solely attributable  to  regu-
 S. 4954--B                          3
 
 lating  persons  under either the insurance law or the banking law shall
 be allocated.
   (C)  (1) PRIOR TO LEVYING A CIVIL PENALTY PURSUANT TO SUBPARAGRAPH (C)
 OF PARAGRAPH ONE OF SUBSECTION (A) OF THIS SECTION,  THE  SUPERINTENDENT
 SHALL CONSIDER, IN ADDITION TO OTHER APPROPRIATE FACTORS:
   (A)  WHETHER  THE SUBJECT OF THE INVESTIGATION KNEW THAT THEIR CONDUCT
 WAS MADE IN CONNECTION WITH AN ABNORMAL DISRUPTION OF THE MARKET WITH AN
 INTENT TO UNLAWFULLY GAIN FROM SUCH DISRUPTION OR  WHETHER  THE  DEFEND-
 ANT'S  CONDUCT WAS IN WILLFUL DISREGARD TO AN ABNORMAL DISRUPTION OF THE
 MARKET WITH AN INTENT TO UNLAWFULLY GAIN FROM SUCH DISRUPTION;
   (B) WHETHER THE CONDUCT OF THE SUBJECT OF THE INVESTIGATION  CAUSED  A
 PERSON  OR PERSONS TO SUFFER LOSS OR ENCUMBRANCE OF A PRIMARY RESIDENCE,
 PRINCIPAL EMPLOYMENT OR SOURCE OF  INCOME,  PAYMENTS  RECEIVED  UNDER  A
 PENSION  OR  RETIREMENT PLAN OR A GOVERNMENT BENEFITS PROGRAM, OR ASSETS
 ESSENTIAL TO HEALTH OR WELFARE;
   (C) ANY OTHER SUBSTANTIAL ECONOMIC DAMAGE RESULTING FROM  THE  CONDUCT
 OF THE SUBJECT OF THE INVESTIGATION; AND
   (D)  THE  NET  WORTH  AND ANNUAL BUSINESS VOLUME OF THE SUBJECT OF THE
 INVESTIGATION.
   (2) IN DETERMINING  THE  AMOUNT  OF  ANY  SUPPLEMENTAL  CIVIL  PENALTY
 IMPOSED  PURSUANT TO SUBPARAGRAPH (C) OF PARAGRAPH ONE OF SUBSECTION (A)
 OF THIS SECTION, THE SUPERINTENDENT SHALL MAKE A FINDING,  AFTER  NOTICE
 AND  HEARING  IS PROVIDED, AS TO THE AMOUNT OF THE UNLAWFUL GAIN MADE IN
 CONNECTION WITH THE ABNORMAL DISRUPTION OF THE MARKET BY THE SUBJECT  OF
 THE INVESTIGATION.
   §  3.  This  act shall take effect on the thirtieth day after it shall
 have become a law. Effective immediately, the superintendent  of  finan-
 cial  services  and  the  attorney general may make regulations and take
 other actions reasonably necessary to implement this act on such  effec-
 tive date.