N.Y. Financial Services Law § 501: Restrictions on officers and employees of the department; penalty

§ 501. Restrictions on officers and employees of the department;

penalty. (a) No officer or employee of the department shall obtain a

loan or extension of credit from any regulated person or be interested

in any such regulated person as a director, partner, owner, officer,

attorney, agent, trustee or employee, or own or deal in, either directly

or indirectly, the stocks or obligations of any such regulated person. A

violation of the provisions of this section by any officer or employee

shall constitute sufficient grounds for his or her removal by the

superintendent.

(b) Nothing in this section shall be construed to prohibit any officer

or employee from obtaining financing from a regulated person upon his or

her primary or secondary residence, provided that the premises securing

such loan are occupied by such employee, and further provided that such

loan is reported to the department, which shall keep a record thereof.

The term "residence," for the purposes of this section, shall mean a

single family or two family residence, condominium apartment or

cooperative apartment, occupied in whole or in part, by the officer or

employee. The term "cooperative apartment" means a residence where

ownership is evidenced by certificates of stock or other evidence of an

ownership interest in, and a proprietary lease from, a corporation or

partnership formed for the purpose of the cooperative ownership of real

estate.

(c) Nothing in this section shall be construed to prohibit any officer

or employee from: (1) obtaining a loan secured by an assignment of his

or her deposit in a banking organization, or an assignment or pledge of

his or her shares in a savings and loan association or credit union; (2)

accepting financing of an automobile, truck or other personal property

from a banking organization or a sales finance company; (3) entering

into a premium finance agreement with a premium finance agency; or (4)

owning shares of an investment company (mutual fund) that may

incidentally invest in the securities of any regulated person, provided

that the purpose of the investment portfolio of such investment company

may not be to invest primarily or exclusively in the securities of

banking or insurance entities. For purposes of this section, investment

companies include open-end and closed-end investment companies and unit

investment trusts as those terms are defined in an Act of Congress

entitled "The Investment Company Act of 1940," as amended.

(d) Nothing in this section shall be construed to prevent any officer

or employee from becoming a policyholder of any insurer or from taking

out a loan under the officer's or employee's insurance policy, or

prevent or impair the ability of the superintendent to act as a

liquidator, rehabilitator, or conservator pursuant to article

seventy-four of the insurance law or article thirteen of the banking

law.

(e) The superintendent may promulgate policies and procedures for

exempting particular employees, or classes of employees, from investment

restrictions in subsection (a) of this section as to regulated persons

with which such employee or class of employees has no authority or

involvement.

(f) This section shall not apply to investments held in a blind trust

approved by the superintendent or the superintendent's designee.