BILL NUMBER: S2029
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the public officers law, in relation to prohibiting
public officers and employees from using nonpublic information derived
from their official positions for personal benefit
 
PURPOSE:
The purpose of this legislation is to enact the New York Stock Act,
which prohibits public officers and employees from using nonpublic
information derived from their official positions for personal benefit
 
SUMMARY OF PROVISIONS:
Section 1 establishes the New York Stock Act.
Section 2. adds a new article 7-A to the Public Officers Law to include
the following:
* Prohibition of the use of nonpublic information for private profit -
the Legislative Ethics Commission shall issue interpretive guidance for
the relevant rules of each chamber.
* Prohibition of insider trading - Each member or employee of the legis-
lature owes a duty arising from a relationship of trust and confidence
to the legislature, state and citizens with respect to nonpublic infor-
mation derived from their position.
* Other state officials - The Commission on Ethics and Lobbying in
Government shall make guidelines, including the standards of ethical
conduct for executive branch employees. The Advisory Committee on Judi-
cial Ethics shall issue interpretive guidance of the relevant ethics
rules applicable to judicial officers and employees. This section
further extends the prohibition on insider trading to each executive
branch employee, judicial officer, and judicial employee.
*Participation in initial public offerings - The individuals mentioned
above may not purchase securities that are the subject of an initial
public offering in any manner other than is available to members of the
public.
Section 3 establishes the effective date.
 
JUSTIFICATION:
Public officials are often entrusted with confidential information so
that they can make critical decisions to protect public interests.
Although rare, some of these officials have in the past used that confi-
dential information for their own economic gains, by making clandestine
transfers of equities and other securities. This practice of insider
trading decreases public trust in government, and constitutes an unfair
enrichment of public officials at the expense of the taxpayer - who
provided the tax dollars which were used to procure the information in
the first place.
Following the adoption of the federal STOCK ACT, it is now known when
federal officials, such as members of Congress, make trades of stocks
that could be based on the knowledge they gain from being in federal
office. In an effort to decrease the potential for insider trading among
New York State public officers and employees, this bill would prevent
New York State's public officers from profiting from non-public informa-
tion.
The New York Stock Act would strengthen ethical obligations within
government and provide additional assurance to the public that the offi-
cials sworn to serve their interests are indeed doing so rather than
seeking personal profit from their government access to information.
This bill would, in summary, prohibit people from having an unfair stock
market advantage and avert financial gain based on insider trading.
 
LEGISLATIVE HISTORY:
2024: S3329 - Referred to Ethics and Internal Governance
2023: S3329 - Referred to Ethics and Internal Governance
2022: S8742 - Committed to Rules
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This act shall take effect immediately.