Section 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.