Matthew L. Levine

NYDFS ISSUES $100 MILLION PENALTY TO MASHREQBANK FOR OFAC-RELATED COMPLIANCE VIOLATIONS

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NYDFS Issued a $100  million to Mashreqbank.  Enforcement takeaways:

–  Conduct is failing to implement an effective OFAC compliance program, submitting incomplete reports to NYDFS, and failing to report misconduct to NYDFS;

–  Conduct relates to violations of federal economic sanctions against Sudan
–  NYDFS previously penalized Mashreq Bank $40 million in 2018 for a deficient BSA/AML program;

–  No monitor imposed;

–  Parallel actions by OFAC and the Federal Reserve Board.

The enforcement action may be found here:  https://www.dfs.ny.gov/reports_and_publications/press_releases/pr20211109

 

 

 

NYDFS CREATES CLIMATE RISK DIVISON

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NYDFS created a new Climate Risk Division, with a new Executive Deputy Superintendent overseeing the Division, which will:
– integrate climate risks into its supervision of regulated entities
– support industry growth in managing climate risks
– coordinate with international, national, and state regulators
– develop internal capacity on climate-related financial risks
– support capacity-building of peer regulators on climate-related supervision
– ensure fair access to financial services for all communities, especially those most impacted by climate change.

Press release is here:  https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202111032

 

 

 

 

WHAT’S OLD IS NEW AGAIN: DOJ’S NEW CORPORATE CRIMINAL ENFORCEMENT POLICIES EQUIP PROSECTUORS WITH MORE TOOLS AND INFORMATION

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Matthew Levine and Alicyn Cooley provide some hot takes on DOJ’s new actions and approaches to corporate criminal enforcement on the NYU Program on Corporate Compliance and Enforcement Blog.  Blog post here:   What’s Old Is New Again: DOJ’s New Corporate Criminal Enforcement Policies Equip Prosecutors with More Tools and Information    

DOJ RESCINDS PRIOR GUIDANCE ON MONITORSHIPS — NO LONGER DISFAVORED

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BIG News Out of DOJ Re: Monitorships: “To the extent that prior Justice Department guidance suggested that monitorships are disfavored or are the exception, I am rescinding that guidance. Instead, I am making clear that the department is free to require the imposition of independent monitors whenever it is appropriate to do so in order to satisfy our prosecutors that a company is living up to its compliance and disclosure obligations under the DPA or NPA.” — Deputy AG Lisa Monaco.

Announcement is here:  https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute

 

 

 

NYDFS ANNOUNCES PROPOSED REGULATION TO INCREASE TRANSPARENCY IN SMALL BUSINESS LOANS; FIRST BY NEW SUPERINTENDENT

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NYDFS announced a new proposed regulation designed to improve transparency for small businesses seeking commercial loans. The regulation applies to companies offering commercial financing in amounts under $2.5 million, requiring them to make standardized disclosures about credit terms. The regulation implements legislation enacted by the State legislature earlier this year. It is the first proposed regulation issued by recently appointed Acting Superintendent Harris.

 

The proposed regulation may be found here:

https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202109211

 

 

 

Cyber-Enforcement by NYDFS – Insurance Journal Podcast

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Cyber-enforcement by NYDFS and others is only going to get more intense. I had the good fortune to sit down virtually with journalist Elizabeth Blosfield of the Insurance Journal to discuss ramped up enforcement by NYDFS in cybersecurity on the Insuring Cyber Podcast.

 

The link to the podcast episode can be found here: https://www.insurancejournal.tv/videos/19537/

 

Governor Hochul Nominates Adrienne A. Harris to be the Next NYDFS Superintendent

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NYDFS WATCH: Governor Hochul has nominated Adrienne Harris, a former economic advisor in the Obama White House and Treasury Department, to be the next NYDFS Superintendent. While the press release does not specify, each of the past two Superintendents became Acting Superintendent while their Senate nomination was pending.

The link to the nomination announcement is here: https://www.governor.ny.gov/news/governor-hochul-announces-nomination-adrienne-harris-superintendent-department-financial

NYDFS Expected to Take Enforcement Action Against Robinhood Financial

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UPDATE ON NYDFS ENFORCEMENT ACTION VS. ROBINHOOD: There is a deal in principle, according to an amended S-1 filing. Expected penalty is $30MM, and there apparently will be appointment of an independent monitor. Robinhood says NYDFS informed it of alleged violations involving cybersecurity and virtual currency (Part 500 and Part 200) requirements, including deficiencies in policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in application development security.

A Markets Insider article on the matter can be found here: https://markets.businessinsider.com/news/stocks/robinhood-ipo-30-million-fine-crypto-anti-money-laundering-probe-2021-7

A DEFICIENCY LETTER TO (NOT FROM) THE SEC: PLEASE PROVIDE MORE TRANSPARENCY WHEN CHARGING A CHIEF COMPLIANCE OFFICER WITH PERSONAL LIABILITY

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Its time to send a deficiency letter to the SEC — the agency needs to do a better job of providing transparency when issuing an enforcement action against a compliance officer. See my latest post on the NYU Program on Corporate Compliance & Enforcement Blog.   Link is below: A Deficiency Letter to (Not From) The … Read more