(Bloomberg News) Manhattan District Attorney Cyrus Vance Jr. said he wants harsher penalties, including mandatory prison time, for people convicted of major securities fraud in New York.

Vance said in a speech at New York City Bar Association in midtown Manhattan yesterday that he will call on the legislature to change the Martin Act, New York's securities fraud statute. He said he will seek prison sentences of as long as 8 1/3 years to 25 years for frauds involving more than $1 million. The crime now carries no minimum prison sentence, regardless of the money involved.

"The flexibility of the Martin Act and its utility in the battle against criminal fraud is marred by its overly lenient penalties," Vance said in the speech, titled "White Collar Crime in 2011: The Martin Act, Cybercrime and Beyond."

The Martin Act was wielded by Eliot Spitzer and Andrew Cuomo when they served as attorney general, against investment banks and the mutual-fund industry. Robert Morgenthau, Vance's predecessor in the Manhattan DA's office, used the law to prosecute white-collar crime.

Vance said he plans to make broader use the Martin Act in the coming year to prosecute investment frauds and Ponzi schemes involving investment funds; fraud schemes that target broker-dealers; the manipulation of commodities and commodities futures and insider trading in securities and commodities.

He said he wants penalties to conform to larceny statutes, which distinguish between $1,000, $3,000, $50,000 and $1 million thefts. He also wants to increase the time allowed to bring criminal charges.

Same Penalty

A high-level market manipulator who deprives the investing public of hundreds of millions of dollars is currently subject to the same penalty as a broker who fraudulently deprives one customer of $500, Vance said.

"In either case, a state court judge would be authorized to impose a non-incarceratory sentence," Vance said in the speech.

The Martin Act, enacted in 1921, grants authority to investigate and prosecute, as the state's Court of Appeals stated in 1926, "all deceitful practices contrary to the plain rules of common decency." To violate the law, no sale or purchase is necessary if there are lies or deception in the offering of securities. Intent to defraud also is not required.

Vance said he isn't the first Manhattan District Attorney to complain about the Martin Act, which in its original form lacked criminal provisions.

"It is said the Martin Act has teeth," he quoted then- Manhattan District Attorney Joab Banton as saying in 1925. "It has, but they are an ill-fitting set of false teeth."