New York Consolidated Laws, General Business Law - GBS § 352-h. Trust funds

Whenever hereafter any person, partnership, corporation, company, trust or association, offers or sells securities described in subdivision one of section three hundred fifty-two-e of this article to the public in or from the state of New York, then all moneys received in connection therewith, including deposits or advances therefor, shall continue to be the money of the person making such purchase, deposit or advance, and shall be held in trust by the person, partnership, corporation, company, trust or association offering or selling such securities and shall not be commingled with the personal moneys or become an asset of the person, partnership, corporation, company, trust or association receiving the same, and shall not be subject to attachment, levy or other encumbrance in any action by a third party against such person, partnership, corporation, company, trust or association; and said funds shall remain in trust until actually employed in connection with the consummation of the transaction; and in the event insufficient funds are raised to effectuate the consummation of the transaction, or if the transaction does not result in the acquisition of the real estate, mortgage or lease involved for any reason or reasons, then all moneys so collected less such amounts actually employed in connection with the consummation of the transaction shall be fully returned to the investors. Any provision of any contract or agreement or understanding, whether oral or in writing, whereby a person who so purchases such securities waives any provision of this section is absolutely void. Nothing herein contained shall be deemed to preclude an action against a defaulting investor.