Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
What happens when a company flubs a monitorship? It certainly can get worse for the company. According to this order issued against ZTE Corporation by the Court: “[T]he Court encourages the Government to pursue any reasonable charges and criminal or civil penalties in all cases known and currently unknown. This is especially true for the … Read more
NYDFS issued an enforcement action with an against money services business Moneygram. Some takeaways: $8.25 million civil monetary penalty. Classic typology of “many-to-one” transactions was highly suspicious. Store front agents accounted for dramatic spike in volume and dollar value of payments sent to China in short time period. No monitor imposed but remediation and reporting … Read more
The U.S. Department of Justice extended the monitorship it had imposed on Deutsche Bank. Some takeaways: DOJ found that Deutsche Bank violated a 2021 Deferred Prosecution Agreement relating to FCPA matters. The violation arose because Deutsche Bank “untimely reported” unrelated allegations concerning the purported overstating of the use of ESG criteria in another business line. … Read more
In light of the Russian invasion of Ukraine, NYDFS issued an advisory concerning compliance issues relating to cybersecurity, cryptocurrency and sanctions. Press release found here: https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220225_ukraine_escalation_impact_financial
NYDFS takes enforcement action against the National Bank of Pakistan. Some takeaways: $35 million civil monetary penalty NYDFS may impose independent consultant or monitor after a year in the event progress on remediation is unsatisfactory There is a parallel settlement with the Federal Reserve Board which includes a $20 million penalty as well. The NYDFS … Read more
Important industry cooperation among some lead players in crypto in setting compliance standards, called “T.R.U.S.T.” Press release here: https://www.coinbase.com/blog/introducing-the-travel-rule-universal-solution-technology-trust
Interesting take in pymts.com on NYDFS Crypto Regulation: “NYDFS will not only remain relevant as the regulator of the largest financial center in the world, but as the obvious yardstick against which proposed national rules are measured.” Article is found here: https://www.pymnts.com/cryptocurrency/2022/in-adrienne-harris-nydfs-getting-firm-but-friendly-crypto-regulator/
Want to know what’s on the mind of NYDFS Superintendent Adrienne Harris? Interesting discussion including re: crypto, fintech, the Community Reinvestment Act, and cannabis during her confirmation hearing in the NYS Senate, link here: https://www.nysenate.gov/calendar/meetings/insurance/january-24-2022/insurance-meeting
A survey indicates compliance officers are increasingly concerned about unfair regulatory enforcement against individual compliance officers. Some findings: – 72% are concerned regulators expanded the role of compliance officers and the scope of their responsibilities in imposing personal liability. – 70% believe the overall compliance function at their firms is under resourced. – 35% reported … Read more
NYDFS has appointed Peter Marton as its new Virtual Currency Chief. He serves as Deputy Superintendent of the Research and Innovation Division. More here: https://www.coindesk.com/policy/2022/01/06/nydfs-hires-new-deputy-superintendent-of-virtual-currency/