Matthew L. Levine

NYDFS PENALIZES WORLD’S LARGEST BANK BY ASSETS – ICBC– $30 MILLION FOR VIOLATING BSA/AML/OFAC AND CONFIDENTIAL SUPERVISORY INFORMATION REGULATIONS

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According to the DFS allegations (and other public information): •   State-owned Industrial and Commercial Bank of China has $22 Billion in assets in the New York branch alone, and over $5 Trillion globally, and is the world’s largest bank by assets according to the WSJ and third largest by capitalization according to Forbes. •   ICBC entered into … Read more

NYDFS SEEKS COMMENT ON ARTIFICIAL INTELLIGENCE GUIDANCE FOR INSURANCE CARRIERS

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•   DFS has issued draft guidance that “outlines DFS’s expectations for how insurers develop and manage the integration of external consumer data and information sources (‘ECDIS’), artificial intelligence systems (‘AIS’), and other predictive models to mitigate potential harm to consumers.” •   According to DFS: “The use of external consumer data and information sources (‘ECDIS’) and artificial intelligence systems … Read more

NYDFS ENFORCEMENT ACTION AGAINST GENESIS GLOBAL TRADING — $8 MM PENALTY AND LICENSE SURRENDER

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NYDFS penalized Genesis Global Trading, a licensee that served primarily as an OTC trading shop, $8MM for cybersecurity, BSA/AML, and Consumer Protection violations.  Genesis Global has now surrendered its license, apparently after having ceased trading activity some time ago.  According to DFS allegations: •   Genesis Global did not conduct an enterprise-wide risk assessment until 2022, despite … Read more

THE SHAPE OF ENFORCEMENT TO COME: AMENDMENTS TO THE NYDFS CYBERSECURITY REGULATION

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My latest post on the blog for the NYU Program on Corporate Compliance and Enforcement deals with enforcement aspects of the recent amendments to the NYDFS Cybersecurity Regulation, Part 500. These recent amendments to the Cybersecurity Regulation (Part 500) of the New York State Department of Financial Services (NYDFS) are quite expansive in scope.[1]  Chief Compliance … Read more

NYDFS PENALIZES CROSS-BORDER PAYMENTS TRANSMITTER “PAYONEER” $1.25 MILLION FOR OFAC COMPLIANCE DEFICIENCES

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Enforcement takeaways from the Consent Order (per DFS allegations): •   After doing a lookback, Payoneer discovered it had engaged in approximately $793,000 worth of transactions with persons or entities in sanctioned countries during the period Iran, Sudan, Syria and individuals on the SDN List between 2013 and 2018 •   Payoneer self-disclosed these violations to OFAC, which settled … Read more

NYDFS DRAMATICALLY TRIMS GREENLISTED COINS AND ISSUES PROPOSED GUIDANCE ON REVISED COIN LISTING POLICY

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In conjunction with its proposed guidance, DFS has significantly trimmed “Greenlisted” coins. It has cut the list to Bitcoin, Ethereum, and several stablecoins. Until recently it had Greenlisted approximately two dozen coins. These changes are part of the Department’s initiative seeking to strengthen DFS oversight of virtual currencies, which include new guidance coin listing and … Read more

NYDFS FINES FOUR MORE INSURANCE COMPANIES IN ONGOING MARKET SWEEP INVESTIGATION

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According to the DFS allegations in the Four Consent Orders (found here): •   Following a market conduct investigation in 2018, DFS has continued to penalize insurance companies for failing to timely report certain insured vehicle information to the NY DMV •   DFS fined Allstate Insurance group $796,000; Farmers Insurance Group $764,000; Tokio Marine Insurance Group $720,000; and … Read more

NYDFS INTEGRAL TO NY STATE NEW CYBERSECURITY STRATEGY

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According to the strategy released by New York governor Kathy Hochul: “Financial Sector[:] In 2017, the New York State Department of Financial Services (DFS) became the first banking or insurance regulator in the nation to establish a cybersecurity division to protect consumers and industries from cyber threats. DFS also created first-in-the-nation requirements for DFS-regulated banks, … Read more

NYDFS $1.35 MILLION CYBERSECURITY ENFORCEMENT ACTION AGAINST WEALTH MANAGER SA STONE

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NYDFS entered into a Consent Order for alleged cybersecurity violations against wealth management firm SA Stone, which sells insurance products to customers.  According to DFS allegations: •        SA Stone is an independent broker/dealer focusing on wealth management, holding licenses to sell insurance to its customers in New York. •        SA Stone experienced several reportable cybersecurity breaches arising … Read more