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This entry was published on 2014-09-22
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SECTION 352-H
Trust funds
General Business (GBS) CHAPTER 20, ARTICLE 23-A
§ 352-h. Trust funds. Whenever hereafter any person, partnership,
corporation, company, trust or association, offers or sells securities
described in subdivision one of section three hundred fifty-two-e of
this article to the public in or from the state of New York, then all
moneys received in connection therewith, including deposits or advances
therefor, shall continue to be the money of the person making such
purchase, deposit or advance, and shall be held in trust by the person,
partnership, corporation, company, trust or association offering or
selling such securities and shall not be commingled with the personal
moneys or become an asset of the person, partnership, corporation,
company, trust or association receiving the same, and shall not be
subject to attachment, levy or other encumbrance in any action by a
third party against such person, partnership, corporation, company,
trust or association; and said funds shall remain in trust until
actually employed in connection with the consummation of the
transaction; and in the event insufficient funds are raised to
effectuate the consummation of the transaction, or if the transaction
does not result in the acquisition of the real estate, mortgage or lease
involved for any reason or reasons, then all moneys so collected less
such amounts actually employed in connection with the consummation of
the transaction shall be fully returned to the investors. Any provision
of any contract or agreement or understanding, whether oral or in
writing, whereby a person who so purchases such securities waives any
provision of this section is absolutely void. Nothing herein contained
shall be deemed to preclude an action against a defaulting investor.