In the frenzy that followed Amazon’s Long Island City announcement, reports emerged of employees buying condos there before the news was public. Now, a state senator wants to stop those kinds of insider deals.
Sen. Michael Gianaris, a Democrat who represents the Queens neighborhood, is drafting the proposed law, the Wall Street Journal reported. The legislation would prohibit buying or selling real estate based on any nonpublic government action. It would make such deals a felony punishable by up to four years in prison.
Two Amazon employees bought units at Adam America Real Estate’s Galerie condominium just before the news surfaced, according to a previous report. Brendan Aguayo of Halstead Property Development Marketing, which is selling units there, said the buyers currently live in New Jersey and Queens.
Employees are prohibited from insider trading, or buying and selling stocks based on nonpublic information. But lawyers had said they weren’t aware of such restrictions on real estate transactions. The proposed New York law would be similar to the federal law that bans insider trading of stocks.
“Insider trading is illegal in the stock market but in real estate it is not only legal, but celebrated with champagne,” real estate attorney Adam Leitman Bailey told the Journal.
In a statement to the Journal, Amazon said it had no knowledge that the employees were aware of the company’s LIC move.
“We announced the locations to employees at the same time as it was announced publicly,” the statement said. “We employ more than 4,000 in NYC that live and work in the tri-state area. Amazon has no evidence that any employee who may have made a property purchase in the locations before the announcement had any advance knowledge of the location selections.”
The LIC move instantly boosted buyer interest in the neighborhood — with residential brokerages reporting an uptick in deals being negotiated. The area, which has already seen a wave of residential development, is slated to see another wave of condo and rental projects.