§ 468-b. Clients' security fund of the state of New York. 1. The court
of appeals shall appoint a board of trustees to administer the lawyers'
fund for client protection of the state of New York established pursuant
to section ninety-seven-t of the state finance law. Such board shall
consist of seven members. Of the trustees first appointed, three shall
be appointed for a term of three years; two for a term of two years; and
two for a term of one year. As each such term expires, each new
appointment shall be for a term of three years. The court of appeals may
require such reports or audits of the board as it shall from time to
time deem to be necessary or desirable.

2. The board shall have the power to receive, hold, manage and
distribute the funds collected hereunder for the purpose of maintaining
the integrity and protecting the good name of the legal profession by
reimbursing, in the discretion of the trustees to the extent they may
deem proper and reasonable, losses caused by the dishonest conduct of
attorneys admitted to practice in this state. For purposes of this
section, the term "dishonest conduct" shall mean misappropriation or
wilful misapplication of clients' money, securities, or other property,
by an attorney admitted to practice in this state.

3. The board of trustees shall adopt regulations for the
administration of the lawyers' fund for client protection of the state
of New York and the procedures for presentation, consideration,
allowance and payment of claims, including the establishment of a
maximum limitation for awards to claimants.

4. The board of trustees shall have the sole discretion to determine
the merits of claims presented for reimbursement, the amount of such
reimbursement and the terms under which such reimbursement shall be
made. Such terms of reimbursement shall require that the claimant
execute such instruments, take such action or enter into such agreements
as the board of trustees shall require, including assignments,
subrogation agreements and promises to cooperate with the board of
trustees in making claims against the attorney whose dishonest conduct
resulted in the claim.

5. The board of trustees shall serve without compensation but shall be
entitled to receive their actual and necessary expenses incurred in the
discharge of their duties.

6. The board of trustees may employ and at pleasure remove such
personnel as it may deem necessary for the performance of its functions
and fix their compensation within the amounts made available therefor.

7. The board of trustees shall be considered employees of the state
for the purpose of section seventeen of the public officers law.

8. All payments from the lawyers' fund for client protection of the
state of New York shall be made by the state comptroller upon
certification and authorization of the board of trustees of said fund.

9. Acceptance of an award of reimbursement from the lawyers' fund for
client protection shall, to the extent of such award, (a) subrogate the
fund to any right or cause of action that accrued to the claimant as a
consequence of the dishonest conduct that resulted in the claimant's
award and (b) create a lien in favor of the fund that shall attach to
any money asset that is designated to be paid to the claimant from, or
on behalf of, the attorney who caused the claimant's loss. If the fund
fully reimburses the claimant's loss, as determined by the board of
trustees, the lien shall be in the amount of the fund's award. If the
claimant's loss exceeds the fund's award, the lien shall not extend to
the claimant's right to recover additional restitution from the attorney
for the claimant's unreimbursed loss. In the event of a recovery by the
fund, a claimant shall be entitled to any money recovered in excess of
the fund's award of reimbursement to the claimant.