N.Y. General Business Law § 339-e: Hypothecation of customer's securities

§ 339-e. Hypothecation of customer's securities. Any person, firm,

association or corporation engaged in the business of purchasing and

selling as a broker or dealer stocks, bonds or other evidences of debt

of corporations, companies or associations, who

1. Having in his or its possession, for safe keeping or otherwise,

stocks, bonds or other evidences of debt of a corporation, company or

association belonging to a customer, without having any lien thereon or

any special property therein, pledges or disposes thereof without such

customer's consent; or

2. Having in his or its possession stocks, bonds or other evidences of

debt of a corporation, company or association belonging to a customer on

which he or it has a lien for indebtedness due to him or it by the

customer, pledges the same for more than the amount due to him or it

thereon, or otherwise disposes thereof for his or its own benefit,

without the customer's consent, and without having in his or its

possession or subject to his or its control, stocks, bonds or other

evidences of debt of the kind and amount to which the customer is then

entitled, for delivery to him upon his demand therefor and tender of the

amount due thereon, is guilty of a misdemeanor.