§ 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.
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