[475]*475Order, Supreme Court, New York County (Charles E. Ramos, J.), entered October 21, 2010, which, to the extent appealed from, denied defendants Maurice R. Greenberg’s and Howard I. Smith’s motions for summary judgment dismissing the Martin Act (General Business Law § 352-c [1] [a], [c]) and Executive Law § 63 (12) claims as against them, and granted the Attorney General’s motion for summary judgment on the issue of liability with respect to one of two challenged transactions, modified, on the law, to deny the Attorney General’s motion, and otherwise affirmed, without costs.
Introduction
The Attorney General brought this action against American International Group (AIG), its former CEO (Maurice R. Greenberg) and its former CFO (Howard I. Smith) alleging that defendants violated Executive Law § 63 (12) and the Martin Act based upon their role in fraudulent transactions designed to portray an unduly positive picture of AIG’s loss reserves and underwriting performance. AIG, formerly the largest insurance company in the world, entered into a settlement agreement with the Attorney General with respect to these and other claims, paying over $1 billion in damages and penalties. The details of the challenged transactions are as follows.
The GenRe Transaction
In the third quarter of 2000, AIG reported that its loss reserves (funds set aside to pay future claims on policies) had declined by $59 million from the previous quarter, while its net premiums increased by 8.1%. In the industry, this could be viewed as an indication of a company’s deteriorating financial condition. In an effort to shore up its loss reserves, Greenberg called Ronald Ferguson, the CEO of General Reinsurance Corporation (GenRe), to discuss the possibility of AIG’s entering into a loss portfolio transfer (LPT) involving “finite reinsurance” with GenRe. Greenberg testified at his deposition that he made the call in October 2000, based upon his concerns about AIG’s loss reserves. He testified that he remembered inquiring about borrowing some of GenRe’s reserves through an LPT. He did not remember the details of the conversation but testified that he told Ferguson that AIG would pay GenRe if it was willing to accommodate the request.
After the conversation, Ferguson designated Richard Napier, a senior GenRe executive, to handle the details from GenRe’s [476]*476end. Greenberg appointed Chris Milton, a senior vice president at AIG and the head of reinsurance, to work out the details for AIG.
Greenberg testified that he had a second telephone conversation with Ferguson in November 2000 and that Ferguson told him that GenRe could provide AIG the product it had requested. Greenberg also testified that he had contemporaneous discussions with Milton and Smith concerning the GenRe transaction, but denied any knowledge of its fraudulent nature. Smith testified at his deposition that Milton advised him of the general terms of the GenRe deal. The actuaries testified that Smith was responsible for recording the transaction. Moreover, Smith participated in the meeting regarding commuting the GenRe transaction from an LPT to profits. Although AIG’s underwriting practices required internal actuarial review of any proposed insurance agreement over $20 million, no underwriting analysis of the GenRe transaction was directed or performed.
The draft contract between AIG and GenRe provided, in general terms, that GenRe would pay AIG $10 million to assume a specified amount of risk, namely $100 million for six to nine months. The premium was $500 million on a 98% funds withheld basis, meaning that GenRe could charge AIG only for losses beyond the $500 million premium (up to a $600 million cap on losses).
The Attorney General alleges that the $100 million loss exposure was illusory, that at least half of the contracts covered by the GenRe transaction had already been reinsured by other carriers and thereby carried no risk to AIG, and that AIG and GenRe had separately agreed that, for accommodating AIG in its request to structure the transaction as no risk, GenRe was paid a $5 million fee, and the $10 million premium payment was secretly returned to GenRe through other, unrelated agreements. In his deposition in this litigation, Napier testified that the parties “involved” in the separate side deal included Greenberg, Ferguson, and Milton. Greenberg denied knowledge of both the no-risk nature of the GenRe transaction and the side deal concerning the fee and the return of the premium.
According to generally accepted accounting principles, an LPT can only be recorded as loss reserves if the risk insured exceeds a 10% chance of a 10% loss. If, as the parties presently concede, there was no risk of loss in the GenRe transaction, it should have been recorded on AIG’s financials as a deposit. Instead, AIG recorded $250 million in loss reserves for the fourth quarter of 2000 based upon the GenRe transaction and an additional $250 million in loss reserves for the first quarter [477]*477of 2001, consistent with Greenberg’s intent when he reached out to Ferguson, to shore up the reserves. Had these amounts not been credited in this manner, AIG would have had a $187 million decline in its loss reserves by the first-quarter of 2001. In a press release regarding AIG’s 2001 first-quarter financial picture, Greenberg is quoted as being pleased with a number of favorable financial indicators, including the reversal of the loss reserve declines.
In 2001, 2002, and 2003, Greenberg and Smith certified AIG’s 10-K financial disclosure reports with the SEC, each year recording the $500 million from GenRe as loss reserves. In 2003 and 2004, Greenberg participated in decisions regarding characterizing the GenRe transaction, and, in late 2004, $250 million was commuted to profits.
In early 2005, AIG received subpoenas from the Attorney General and the SEC for information regarding the GenRe transaction. AIG retained outside counsel to perform an internal investigation, and PricewaterhouseCoopers (PwC), the auditor, initiated an expanded audit to review AIG’s prior financials and certain transactions. Barry Winograd, the PwC partner in charge of the audit, testified at his deposition that he had frequent contact with Greenberg throughout the investigation and that Greenberg was particularly interested in PwC’s findings with respect to GenRe.
In March 2005, AIG issued a press release admitting that the GenRe transaction documentation was improper, stating that in light of the lack of evidence of risk transfer, the transactions should have been recorded as deposits. Defendants subsequently resigned their positions as CEO and CFO of the company. On May 31, 2005, following defendants’ departures from AIG, the company’s new management filed AIG’s 10-K for 2004, restating the financials submitted from 2000 to 2004. In the restatement, AIG explained that “[GenRe] was done to accommodate a desired accounting result and did not entail sufficient qualifying risk transfer. As a result, AIG has determined that the transaction (s) should not have been recorded as insurance.”
In June 2005, two GenRe executives pleaded guilty to participating in a conspiracy to commit securities fraud for their role in the GenRe transaction. In February 2008, four other GenRe executives were convicted on federal criminal charges with respect to the GenRe transaction. Those convictions were reversed upon evidentiary errors and the case was remanded for a new trial (see United States v Ferguson, 553 F Supp 2d 145 [D Conn 2008]).
The Capeo Transaction
[478]*478Beginning in the early 1990s, various AIG subsidiaries were writing auto warranty insurance policies. In late 1999, an actuarial consultant retained by AIG concluded that the company was facing an underwriting loss ratio of 265% in this area. At his deposition, Greenberg admitted that AIG’s auto warranty business up until the late 1990s “was not handled properly,” that he was annoyed about the situation, and that he may have referred to the situation as a “debacle.” Greenberg also admitted giving specific instructions to Charles Schader, about reforming the auto warranty business, and testified that he had regular calls with Schader, and other employees, about his concerns, including on weekends. These calls concerned “everything from . . . consultation of outstanding contracts and policies, claims handling, and mitigation of loss.”
Greenberg also testified that he directed an internal audit of AIG’s auto insurance business to review the auto warranty business and to explore ways to mitigate projected losses. The parties do not dispute the details of the transaction structured to meet these objectives between AIG and Capeo Reinsurance Company, Ltd. (CAPCO), an offshore shell company controlled by AIG. AIG, which did not treat CAPCO as a consolidated entity on its financial statements, sold shares in the shell company over time so as to trigger recognition of $162.7 million in capital losses (which the investing public would not deem as significant to the company’s financial well-being). The amount corresponded to AIG’s payment of over $183 million in underwriting losses.
Both Greenberg and Smith defended their approval of the CAPCO transaction, testifying that Joseph Umansky, the Senior Vice President of AIG, had assured them that it would be structured to properly comply with all legal, accounting, and regulatory guidelines. By contrast, the Attorney General claims that Smith directed Umansky to develop a transaction to convert underwriting losses into capital losses, that both defendants received an April 2000 memo from Umansky proposing the CAPCO deal, and that Greenberg personally directed Umansky to contact the president of an AIG private bank in Switzerland to locate outside investors to buy the CAPCO common stock. After Greenberg and Smith left the company in 2005, AIG announced that CAPCO involved an improper structure created to characterize underwriting losses relating to the auto warranty business as capital losses.
Procedural History
In September 2009, the Attorney General, Greenberg and Smith all filed motions for summary judgment. The motion [479]*479court denied Greenberg’s and Smith’s motions in their entirety. It granted the Attorney General’s motion in part, finding that Greenberg and Smith’s knowledge and participation in the CAPCO transaction constituted a violation of the Martin Act and Executive Law § 63 (12) as a matter of law. Greenberg and Smith each appeal from the denial of their motions and the partial grant of the Attorney General’s motion. The Attorney General appeals from the portion of its motion that was denied.
Appellate Contentions
The issues before us include (1) whether the action is preempted by federal law; (2) whether the court properly denied defendants’ motions for summary judgment regarding the GenRe transaction; and (3) whether the court properly granted the Attorney General summary judgment on liability regarding the CAPCO transaction.
Preemption
The Supremacy Clause of the United States Constitution provides that the laws of the United States “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding” (US Const, art VI, cl 2). This broad language gives Congress the power to supersede state statutory, regulatory and common law (People v First Am. Corp., 18 NY3d 173, 179 [2011]; Guice v Charles Schwab & Co., 89 NY2d 31, 39 [1996], cert denied 520 US 1118 [1997]). Preemption can arise by: (i) Congress’s express preemption; (ii) Congress establishing a comprehensive regulatory scheme in an area effectively removing the field from the state’s realm; or (iii) an irreconcilable conflict between federal and state law (Matter of People v Applied Card Sys., Inc., 11 NY3d 105, 113 [2008], cert denied 555 US 1136 [2009], citing Balbuena v IDR Realty LLC, 6 NY3d 338, 356 [2006]). The United States Supreme Court has instructed that, in determining whether federal law preempts state law, a court’s “sole task is to ascertain the intent of Congress” (California Fed. Sav. & Loan Assn. v Guerra, 479 US 272, 280 [1987]; see also Medtronic, Inc. v Lohr, 518 US 470, 485 [1996] [“(T)he purpose of Congress is the ultimate touchstone in every pre-emption case” (internal quotation marks omitted)]; Matter of People v Applied Card Sys., Inc., 11 NY3d at 113).
Defendants argue that this action is precluded by the express language of title I of the Securities Litigation Uniform Standards Act of 1998 (SLUSA) (15 USC § 78bb [f] [1], [2]). They also claim that the claims asserted by the Attorney General conflict with Congress’s intent to create a uniform federal stan[480]*480dard for securities litigation as evidenced by governing securities litigation, namely, the Private Securities Litigation Reform Act of 1995 (PSLRA) (15 USC § 77z-l), the National Securities Markets Improvement Act of 1996 (NSMIA) (15 USC § 77r) and SLUSA, and the cases which construe these statutes. However, nothing in the language or legislative history of the cited legislation indicates Congress intended to preempt this civil enforcement action under the Martin Act and the Executive Law (People v Applied Card Sys., Inc., 11 NY3d at 115). In fact, the cited statutes, their legislative histories and the case law presuppose an important role for state Attorneys General in investigating fraud and bringing civil actions to enjoin wrongful conduct, vindicate the rights of those injured thereby, deter future fraud, and maintain the public trust.
The NSMIA, codified at 15 USC § 77r (a) (2) (B), expressly preempts any state law that “directly or indirectly prohibit[s], limit[s], or impose[s] any conditions upon the use of . . . any proxy statement, report to shareholders, or other disclosure document relating to a covered security” registered under 15 USC § 78o-3.
As the motion court stated, the purpose of NSMIA is to preempt any state Blue Sky Laws that would require the issuers of securities to comply with certain state registration requirements prior to marketing in the state, in recognition of the redundancy and inefficiency of such requirements (see ZuriInvest AG v Natwest Fin. Inc., 177 F Supp2d 189, 192 [2001]). Accordingly, NSMIA precludes states from imposing their own requirements for disclosure on prospectuses, traditional offering documents, and sales literature relating to covered securities (id.).
However, a savings clause in the NSMIA permits states to retain jurisdiction to police fraudulent conduct: “Consistent with this section, the securities commission (or any agency or office performing like functions) of any State shall retain jurisdiction under the laws of such State to investigate and bring enforcement actions with respect to fraud or deceit, or unlawful conduct by a broker or dealer, in connection with securities or securities transactions” (15 USC § 77r [c] [1] [emphasis added]). The legislative history of NSMIA confirms Congress’s intent “not to alter, limit, expand, or otherwise affect in any way any State statutory or common law with respect to fraud or deceit . . . in connection with securities or securities transactions” (Rep of House Comm on Commerce, HR Rep 104-622, 104th Cong, 2d Sess, at 34, reprinted in 1996 US Code Cong & Admin News, at 3877, 3897).
[481]*481The PSLRA was enacted in 1995 to set uniform federal standards for private plaintiffs seeking to bring actions against issuers of publicly traded securities. Because the PSLRA set heightened pleading standards for cases brought in federal court, the statute had the unintended effect of what Congress termed a “migration” of frivolous class action securities litigations to state court, undermining PSLRA’s aim.1 Accordingly, in 1998, Congress passed SLUSA, which provides, as relevant, that “[n]o covered class action based upon the statutory or common law of any State or subdivision thereof may be maintained in any State or Federal court by any private party alleging ... a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security” (15 USC § 78bb íf¡ [1] [A]).
Defendants argue that SLUSA preempts this action because the state Attorney General is seeking, in a de facto representative capacity, to litigate claims on behalf of a “covered class” of AIG investors seeking to recover for their financial losses, in frustration of the legislation’s intent to create uniform federal standards for such litigation. However, this is not a shareholder derivative lawsuit, and in fact, there is such an action presently pending in federal court against defendants.2 Rather, after years of joint federal and state investigation, the Attorney General exercised the discretion of his office to bring this enforcement action pursuant to the Executive Law and the Martin Act, to protect the citizens of this State and the integrity of the securities marketplace in New York, to enjoin allegedly fraudulent practices, and to direct restitution and damages to deter future similar misconduct (see People v Applied Card Sys., Inc., 11 NY3d at 109; People v Bunge Corp., 25 NY2d 91, 100 [1969]; compare Merrill Lynch, Pierce, Fenner & Smith Inc. v Dabit, 547 US 71 [2006] [class action securities litigation]; Kircher v Putnam Funds Trust, 547 US 633 [2006] [same]).
Thus, nothing in the federal legislative scheme indicates that Congress intended to preempt this action, and in fact, the cited statutes express the importance of the state’s role in policing fraud (see Bunge at 100). Nor is there any indication that Congress intended to preclude the Attorney General from seeking monetary recovery in order to deter alleged fraudulent [482]*482conduct (see People v Coventry First LLC, 13 NY3d 108, 114 [2009] [Attorney General has statutory authority to seek both injunctive and victim specific relief, comparable to the EEOC in the federal arena]; People v Applied Card Sys., Inc., 11 NY3d at 109).
In re Baldwin-United Corp. (Single Premium Deferred Annuities Ins. Litig.) (770 F2d 328 [1985]) and Merrill Lynch, Pierce, Fenner & Smith, Inc. v Cavicchia (311 F Supp 149 [1970]) are two of a number of cases cited by defendants which are distinguishable on their facts. In Baldwin, 31 states were challenging an injunction precluding them from commencing state law actions for money damages to supplement sums received by the same plaintiffs who had entered into settlement agreements in a number of consolidated class action securities litigations. Here, unlike Baldwin, no settlement has been approved in the class action pending in federal court. Further, as stated above, this enforcement action has aims and seeks remedies broader than the restitution sought in Baldwin.
Cavicchia involved a statutory interpleader action brought by securities brokers from New York and New Jersey. The plaintiffs sought the transfer of sequestered funds held by the New York State Attorney General to an impartial receiver, so that the monies could be distributed to defrauded individuals from both states (311 F Supp at 158). The court granted plaintiffs the requested relief, finding no conflict between its order and the sovereign rights of New York’s Attorney General under the Eleventh Amendment to the United States Constitution (id.). Here, in contrast to Cavicchia, the Attorney General’s enforcement action is in pretrial motion practice. No trial has been had on either liability or damages, and there are no issues before us regarding competing states’ rights.
Accordingly, upon review of the cited federal legislation (NSMIA, PSLRA, SLUSA), the relevant legislative history, and the governing case law, we find no evidence that Congress intended to preempt the Attorney General’s Martin Act and Executive Law claims in this action.
State Claims
The Martin Act defines fraud as “any device, scheme or artifice . . . deception, misrepresentation, concealment, suppression, fraud, false pretense or false promise” (General Business Law § 352 [1]). Fraud under the Martin Act includes all deceitful practices contrary to the plain rules of common honesty and all acts tending to deceive or mislead the public (see People v Sala, 258 AD2d 182, 193 [1999], affd 95 NY2d 254 [2000]). Executive Law § 63 (12) includes “virtually identical language” to [483]*483the Martin Act (State of New York v Rachmani Corp., 71 NY2d 718, 721 n 1 [1988]). Both statutes have been liberally construed to “defeat all unsubstantial and visionary schemes . . . whereby the public is fraudulently exploited” (People v Federated Radio Corp., 244 NY 33, 38 [1926]). The Attorney General need not prove scienter or intent to defraud in a civil claim under either statute (Rachmani, 71 NY2d at 725 n 6; see People v Lexington Sixty-First Assoc., 38 NY2d 588, 595 [1976] [“the terms ‘fraud’ and ‘fraudulent practices’ [are] to be given a wide meaning so as to embrace all deceitful practices contrary to the plain rules of common honesty, including all acts, even though not originating in any actual evil design to perpetrate fraud or injury upon others, which do tend to deceive or mislead”]; see also People v American Motor Club, 179 AD2d 277, 283 [1992], appeal dismissed 80 NY2d 893 [1992]). However, an essential element of the Attorney General’s Martin Act claims is that the alleged fraudulent transactions be material, i.e., that they have more than a trivial effect on net income or shareholder equity (see TSC Industries, Inc. v Northway, Inc., 426 US 438, 449 [1976]).
Officers and directors are liable for a corporation’s fraud where they either personally participate in the fraud or have actual notice of its existence (Marine Midland Bank v Russo Produce Co., 50 NY2d 31, 44 [1980] [“(a) principal that accepts the benefits of its agent’s misdeeds is estopped to deny knowledge of the facts of which the agent was aware”]; accord People v Apple Health & Sports Clubs, 80 NY2d 803, 807 [1992]). Summary Judgment
“Summary judgment permits a party to show, by [admissible evidence], that there is no material issue of fact to be tried, and that judgment may be directed as a matter of law” (Brill v City of New York, 2 NY3d 648, 651 [2004]). It is a “drastic remedy” — depriving the parties of a trial, and as such, should only be granted where there is no doubt as to the existence of a triable issue of fact (see Glick & Dolleck v Tri-Pac Export Corp., 22 NY2d 439, 441 [1968]). The function of a court in reviewing such a motion is issue finding, not issue determination, and if any genuine issue of material fact is found to exist, summary judgment must be denied (Phillips v Kantor & Co., 31 NY2d 307, 311 [1972]). Further, where credibility determinations are required, summary judgment must be denied (see Glick & Dolleck, 22 NY2d at 441).
CPLR 3212 (b), which governs the type of proof admissible in support of a motion for summary judgment, allows for consideration of affidavits, the pleadings and other available proof, such as depositions and written admissions (Andre v Pomeroy, 35 [484]*484NY2d 361 [1974]).3 ****8 This Court has specifically held that witness statements from a Martin Act interview conducted by the Attorney General before an action was brought are admissible in support of a motion for summary judgment (see State of New York v Metz, 241 AD2d 192, 198-199 [1998]). Moreover, restatements of earnings have been held admissible under the Federal Rules of Civil Procedure as a business record (see In re Worldcom, Inc. Sec. Litig., 2005 WL 375313, *7, 2005 US Dist LEXIS 2215, *23 [SD NY 2005] [“company’s admission of what its financial statements should have been in prior years is highly probative of whether the previously filed documents were false”]).
All of the evidence submitted on a motion for summary judgment is construed in the light most favorable to the opponent of the motion (Branham v Loews Orpheum Cinemas, Inc., 8 NY3d 931 [2007]). Further, in opposition to such motion for summary judgment, a court can consider hearsay evidence (see DiGiantomasso v City of New York, 55 AD3d 502 [2008]; Matter of New York City Asbestos Litig., 7 AD3d 285, 285 [2004] [“evidence otherwise excludable at trial may be considered in opposition to a motion for summary judgment as long as it does not become the sole basis for the court’s determination”]).
Applying these principles, we find that the record evidence, including the witness-deponents’ hearsay testimony submitted by the Attorney General regarding the defendants’ actions and statements, presents triable issues of fact as to whether defendants knew of, or participated in the fraudulent aspects of the GenRe and CAPCO schemes, given the nature and degree of their personal involvement in both of the challenged transactions, as well as defendants’ responsibilities within the corporation (see Polonetsky v Better Homes Depot, 97 NY2d 46, 54 [2001]).
With respect to GenRe, Greenberg admits to two relevant phone calls with Ronald Ferguson: the first, initiated by Greenberg, to specifically inquire about an LPT; the second, initiated by Ferguson, to let Greenberg know that the transaction [485]*485Greenberg had requested could be consummated. Winograd’s deposition testimony regarding the degree of Greenberg’s interest in the audit of GenRe and his knowledge as to the details of the transaction support the Attorney General’s position that Greenberg was complicit in the illicit scheme. Further, both Smith and Greenberg signed the financial statements that falsely recorded the GenRe money as loss reserves. Greenberg admits that concern about AIG’s loss reserves prompted his actions, but he and Smith vehemently deny any knowledge that GenRe was structured not to involve any risk, and both also deny participation in any fraudulent LPT.
With respect to CAPCO, Umansky’s Martin Act interview implicates both Greenberg and Smith in the fraudulent characterization of the auto warranty losses as capital losses. Moreover, AIG’s restatement of earnings is admissible as a business record (see Worldcom, 2005 WL 375313, *6, 2005 US Dist LEXIS 2215, *20) and, in conjunction with the excerpts of the depositions of Greenberg and Smith, supports the Attorney General’s position that defendants actively participated in the CAPCO transaction with knowledge of the deceptive purpose it was intended to achieve.
However, given that defendants have submitted sworn denials of knowledge and participation in the CAPCO fraud, and have testified that they were assured by Umansky that the CAPCO deal was structured to comply with all of the applicable legal and regulatory requirements, summary resolution of their knowledge or participation in this alleged fraud cannot be determined as a matter of law.
In addition, the record presents triable issues of fact as to the materiality of the CAPCO transaction, given the competing evidentiary submissions concerning whether a reasonable investor would have found that the information about a quantitative and qualitative impact of the transaction significantly altered the total mix of information available (see TSC Industries, Inc. v Northway, Inc., 426 US at 449, 450; Rachmani, 71 NY2d at 726). Concur — Gonzalez, PJ., Tom, Saxe and Richter, JJ.