N.Y. Education Law § 6209: Investments in designated obligations; indemnification

§ 6209. Investments in designated obligations; indemnification. 1.

It is hereby found and declared that obligations of the dormitory

authority of the state of New York are reasonable, prudent, proper and

legal investments in which all gifts, grants, bequests, devises, trusts,

money, endowments, fees, and other income not derived from public

taxation or the public credit, received and administered or to be

received and administered by the board of trustees or any of its

educational units for college or university purposes in connection with

the units under the control of the board of trustees pursuant to

subdivision six of section sixty-two hundred six of this article may be

invested or may be pledged, hypothecated or delivered as collateral to

secure in whole or in part the payment of principal or interest of any

obligation of the dormitory authority of the state of New York by the

board of trustees or any officer, employee or fiduciary thereof upon

such terms and conditions as may be acceptable to the board of trustees.

It is hereby found and declared that obligations of the dormitory

authority of the state of New York are reasonable, prudent, proper and

legal investments in which funds presently in existence or hereafter

created or established or other moneys administered by any alumni

corporation or college fund organized pursuant to the not-for-profit

corporation law or this chapter to encourage the educational mission or

assist any educational unit of the city university may be invested or

may be pledged, hypothecated or delivered as collateral to secure in

whole or in part the payment of principal or interest of any obligation

of the dormitory authority of the state of New York by such corporation

or fund or any officer, trustee, director, employee or fiduciary thereof

upon such terms and conditions as may be acceptable to such corporation,

person or persons. For the purpose of this section, such gifts, grants,

bequests, devises, trusts, money, endowments, fees, funds, and other

income shall be referred to as endowment funds.

2. Notwithstanding any inconsistent provision of law, the board of

trustees or the directors or trustees of any such alumni corporation or

college fund may in its or their discretion purchase and retain

obligations or may pledge, hypothecate, or deliver as collateral

endowment funds to secure in whole or in part the payment of principal

or interest on obligations of the dormitory authority of the state of

New York without regard to the percentage of the assets of such

endowment funds invested in such obligations or pledged, hypothecated,

or delivered as collateral to secure in whole or in part the payment of

principal or interest on such obligations, and without regard to the

percentage of outstanding obligations of the issuer held or to be held

by such funds or secured by pledge, hypothecation, or delivery as

collateral of such funds. The board of trustees or such alumni

corporation or college fund may consider, in addition to the appropriate

factors recognized by law, the extent to which such investments,

pledges, hypothecations, or deliveries as collateral, will maintain the

credit worthiness of the state of New York and the dormitory authority

of the state of New York so as to enable the state and such corporation

to finance the construction of capital facilities heretofore or

hereafter duly authorized for the city university.

3. Notwithstanding any other provision of law, the state shall, with

respect to the board of trustees, save and hold harmless and indemnify

each and every member, trustee, director, officer, employee or fiduciary

with responsibility for the custody of funds or the assets thereof or

for the approval of the sale, investment, pledge, hypothecation, or

delivery as collateral of the assets of such funds, and any investment

advisor, attorney or accountant who shall have been employed by or who

has advised such member, trustee, director, officer, employee, or

fiduciary, from any or all financial loss arising out of or in

connection with any claim, demand, suit, action, proceeding or judgment

for alleged negligence, waste, or breach of fiduciary duty by reason of

any investment of any funds in, or the pledge, hypothecation, or

delivery as collateral of any endowment funds to secure in whole or in

part the payment of principal or interest of any obligation of the

dormitory authority of the state of New York, or resulting from the sale

of any assets of any funds to obtain sufficient revenues to make such

investments, pledges, hypothecations, or deliveries as collateral,

provided that such member, trustee, director, officer, employee,

fiduciary, investment advisor, attorney, or accountant within five days

after the date on which he or she is personally served with, or receives

actual notice of, any summons, complaint, process, notice, demand, claim

or pleading, shall give notice thereof to the attorney general. Upon

such notice, the attorney general shall assume control of the

representation of such member, trustee, director, officer, employee,

fiduciary, investment advisor, attorney or accountant in connection with

such claim, demand, suit, action or proceeding. Each person so

represented shall cooperate fully with the attorney general or any other

person designated to assume such defense in respect to such

representation or defense.