N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 403: Filing of information concerning stock transfers; necessity for commission approval

§ 403. Filing of information concerning stock transfers; necessity for

commission approval. 1. Whenever there is a transfer of stock of any

association or corporation that is licensed under this article, or of

any association or corporation that leases to such licensee the track at

that it conducts pari-mutuel quarter horse races, or which owns

twenty-five percent or more of the stock of such licensee, there shall

be filed simultaneously with the association or corporation that issued

such stock the following:

a. In duplicate, an affidavit executed by the transferee stating that

he or she is to be the sole beneficial owner thereof, and whether or not

he or she (i) has been convicted of a crime involving moral turpitude,

(ii) has been engaged in bookmaking or other forms of illegal gambling,

(iii) has been found guilty of any fraud or misrepresentation in

connection with racing or breeding, (iv) has been guilty of any

violation or attempt to violate any law, rule or regulation of any

racing jurisdiction for which suspension from racing might be imposed in

such jurisdiction, or (v) has violated any rule, regulation or order of

the commission; if the transferee is not, or is not to be, the sole

beneficial owner thereof, then there shall be annexed to said affidavit

of the transferee, and expressly stated in such affidavit to be deemed a

part thereof, a true and complete copy, or if oral, a complete statement

of all the terms, of the agreement or understanding pursuant to which

the stock is to be so held by the transferee, including a detailed

statement of the interest therein of each person who is to have any

interest therein; and at the same time.

b. In duplicate, an affidavit executed by each person for whom the

said stock, or any interest therein, is to be held by said transferee,

setting forth whether or not the affiant (i) has been convicted of a

crime involving moral turpitude, (ii) has engaged in bookmaking or other

forms of illegal gambling, (iii) has been found guilty of any fraud or

misrepresentation in connection with racing or breeding, (iv) has been

guilty of any violation or attempt to violate any law, rule or

regulation of any racing jurisdiction for which suspension from racing

might be imposed in such jurisdiction, or (v) has violated any rule,

regulation or order of the commission; to each of which affidavits shall

be annexed, and expressly stated in such affidavit to be deemed a part

thereof, a true and complete copy, or if oral, a complete statement of

all the terms of the agreement or understanding pursuant to which the

stock is to be so held by the transferee, including a detailed statement

of the interest therein of each person who is to have any interest

therein.

c. Said association or corporation shall forthwith file with the

commission one of each of said duplicate affidavits.

2. If, after the filing of any affidavit required to be filed by

subdivision one of this section, there is any change in the status of

any such affiant with respect to any of the matters set forth in

paragraph a or b of subdivision one of this section, of the affidavit

filed by such affiant, then such affiant shall forthwith file with the

association or corporation with which his or her affidavit was so filed

a new affidavit, executed by him or her in duplicate, setting forth such

change of status, and the association or corporation shall forthwith

file one of said affidavits with the commission.

3. Whenever any change shall be made in the amount, nature, or

otherwise, of the interest of any person having an interest in stock of

any such association or corporation, or any new interest shall be

created therein, without a transfer thereof as provided in this section,

the record owner of such stock, and each person whose interest therein

has been so attempted to be changed or created, shall file with the

association or corporation that issued such stock, in duplicate,

affidavits as provided by paragraphs a and b of subdivision one of this

section, except that such affidavits need not include the matters

referred to in paragraph a or b of subdivision one of this section,

unless then required pursuant to subdivision two of this section, and

one copy thereof shall forthwith be filed by the association or

corporation with the commission.

4. The commission may, upon application to it for good cause shown,

waive compliance with subdivisions one, two and three of this section.

5. If the commission determines that it is inconsistent with the

public interest, convenience or necessity, or with the best interests of

racing generally, that any person continue to be a stockholder of record

or the beneficial owner of any interest in stock standing in the name of

another, in any association or corporation licensed under this article,

or of any association or corporation that leases to such licensee the

track at which it conducts pari-mutuel quarter horse racing or that owns

twenty-five percent or more of the stock of such licensee, the

commission shall have full power and authority to order or direct each

such stockholder or beneficial owner irrespective of the time when such

stockholder or beneficial owner acquired his or her stock or interest

therein to dispose of such stock or interest within a period of time to

be specified by the commission, which period the commission shall have

full power and authority to extend from time to time.

6. If the commission shall make any order or direction as provided in

subdivision five of this section, the person aggrieved thereby shall be

given notice of the time and place of a hearing before the commission at

which the board will hear such person in reference thereto. The action

of the commission in making any such order or direction shall be

reviewable in the courts of this state in the manner provided by, and

subject to the provisions of article seventy-eight of the civil practice

law and rules.

7. Upon application of the commission, the supreme court of this state

shall have jurisdiction to issue final orders, on notice and after

hearing, commanding any person to comply with the provisions of the

orders or directions issued by the commission under subdivision five of

this section.

8. In case of conflict between this section and article eight of the

uniform commercial code, this section shall control.