Martin Act’s Criminal Offenses

New York Gen. Bus. Law 352-C: NYS Martin Act ‘s Criminal Offenses

Whether by misdemeanor or felony, a conviction under New York General Business Law 352-C, aka, the Martin Act, is life long and indelible. Simply, a conviction will leave you with a permanent criminal record along with potentially years of incarceration. Knowing that a conviction can result in years of imprisonment as well as exclusion from the securities industry (along with restitution to victims), it is critical to understand the elements that constitute a Martin Act crime in New York. Familiarity will not only assist you in avoiding running afoul of the offense, but to also aid in your own defense as you and your criminal lawyer fight the allegations.

• New York Martin Act Information Page

Martin Act: The Elements

(1) It is illegal for any person, partnership or corporation to use any of the following practices in their respective business:

1. Any fraud, deception, concealment, suppression, false pretense or fictitious or pretended purchase or sale;
2. Any promise or representation as to the future which is beyond reasonable expectation or unwarranted by existing circumstances;
3. Any representation or statement which is false, where the person who made such representation or statement:
   1. knew the truth; or
   2. with reasonable effort could have known the truth; or
   3. made no reasonable effort to ascertain the truth; or
   4. did not have knowledge concerning the representation or statement made;

where engaged in to induce or promote the issuance, distribution, exchange, sale, negotiation or purchase within or from this state of any securities or commodities, as defined in section three hundred fifty-two of this article, regardless of whether issuance, distribution, exchange, sale, negotiation or purchase resulted.

(2) It shall be illegal and prohibited for any person, partnership, corporation, company, trust or association, or any agent or employee thereof, to engage in any artifice, agreement, device or scheme to obtain money, profit or property by any of the means prohibited by this section.

(3) It shall be illegal and prohibited for any person, partnership, corporation, company, trust or association, or any agent or employee thereof, engaged in the sale of any securities or commodities, as defined in section three hundred fifty-two of this article, within or from the state of New York to represent that they are an “exchange” or use the word “exchange,” or any abbreviation or derivative thereof, in its name or assumed name unless it is registered with the Securities and Exchange Commission as a national securities exchange, pursuant to section six of the Securities and Exchange Act of 1934, or unless it has been designated as a contract market by the Commodity Futures Trading Commission, pursuant to section five of the Commodity Exchange Act.

• New York Grand Larceny: NY PL Article 155
• New York Scheme to Defraud: NY PL 190.65
• New York Criminal Possession of Stolen Property: NY PL Article 165
• New York Falsifying Business Records: NY PL Article 175
• Federal Securities Crimes: 18 USC 1348

Martin Act: Misdemeanor Conduct

(4). Except as provided in subdivision five or six, a person, partnership, corporation, company, trust or association, or any agent or employee thereof, using or employing any act or practice declared to be illegal and prohibited by this section, shall be guilty of a misdemeanor.

Remember, while a misdemeanor crime may be punishable by “only” up to one year, associated or related crimes often charged in an arrest can be significantly greater.

Martin Act: Felony Conduct

Conduct deviates from misdemeanor to felony when the action involves a scheme to defraud many people. More specifically, under subsection (5), if you (or the company, etc.) intentionally engages in any scheme constituting a systematic ongoing course of conduct with intent to defraud ten or more persons or to obtain property from ten or more persons by false or fraudulent pretenses, representations or promises, and so obtains property from one or more of such persons while engaged in inducing or promoting the issuance, distribution, exchange, sale, negotiation or purchase of any securities or commodities, you are guilty of a Class E felony.

Another Class E felony occurs where, pursuant to subsection (6), you intentionally engage in fraud, deception, concealment, suppression, false pretense or fictitious or pretended purchase or sale, or you make any material false representation or statement with intent to deceive or defraud, while engaged in inducing or promoting the issuance, distribution, exchange, sale, negotiation or purchase within or from New York of any securities or commodities and you obtain property valued in excess of $250.00.

Beyond the felonies codified in General Business Law 352-C, section 359-g(1)(a) also makes it a felony in the State of New York to violate the terms of the statute where you have been convicted of any crime in the preceding five years or any felony involving the fraudulent sale of securities.

More serious than the misdemeanor Martin Act crime, a Class E felony carries a sentence of up to one and one third to four years in prison.

• New York State Felony Sentencing Guidelines

Educate yourself. Build your defense. Limit your exposure to crippling financial and career consequences. Put yourself in the best place to avoid incarceration. Arm yourself with experience, advocacy and knowledge. Contact Saland Law and let their years serving as prosecutors and criminal attorneys work for you.

Call the New York Martin Act Defense attorneys and former prosecutors at (212) 312-7129 or contact us online today.