Enforcement

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 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 $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

NYDFS FINES GEICO $910,000 FOR FAILING TO REPORT UNINSURED MOTORIST INFORMATION

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According to the Consent Order’s allegations, and takeaways: •   NYS DMV’s Insurance Information & Enforcement System (“IIES”) enables law enforcement to know whether vehicles on the road lack insurance. •   As a public safety matter, injured motorists rely on the benefit of statutorily-required auto insurance. •   Insured vehicle information provided by insurers to DMV is used to identify, … Read more

SENATE PASSES BILL TO ENHANCE NYDFS ENFORCEMENT POWERS AGAINST UNLICENSED ACTIVITY

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The New York State Senate passed legislation that will enhance NYDFS enforcement powers against unlicensed activity in the State.  Takeaways: •   While there has been some argument over the powers of NYDFS to go after unlicensed financial services activity in the state, new legislation passed by the Senate and pending in the Assembly clarifies that it … Read more

NYAG ISSUES $4.25 MILLION FINE IN CYBERSECURITY ACTION AGAINST LENDER ONEMAIN

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NYDFS continues to roll out enforcement actions for cybersecurity lapses.  The latest is with lender OneMain.  According to NYDFS allegations in its Consent Order: •    This is the second cybersecurity enforcement action to arise from a routine examination, instead of a Cybersecurity Event. •    Meaning, as noted before, these enforcement actions are now routine. •    Third Party Risk … Read more

NYAG ENTERS $4.3 MILLION SETTLEMENT WITH BITCOIN SELLER AND NYDFS LICENSEE COIN CAFÉ OVER ALLEGATIONS OF FAILURE TO REGISTER AND EXCESSIVE FEES

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The New York Attorney General entered into a settlement with BitCoin seller and NYDFS licensee Coin Cafe over allegations of failure to register with the NYAG’s Investor Protection Bureau and charging excessive fees.   According to NYAG allegations in its Assurance of Discontinuance: •    Coin Café — apparently only a seller of only Bitcoin – nonetheless failed … Read more

NYDFS SETTLES WITH INSURERS OFFERING STUDENT HEALTH PLANS FOR OVERCHARGES

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NYDFS settled with several insurers that offer student health plans, alleging a number of violations.  According to the DFS allegations across the four consent orders: •    DFS found that four insurers – 4 Ever Life Insurance Co., Aetna Life Insurance Co., United Healthcare Insurance Co., and Wellfleet NY Insurance Co. — charged unapproved premium rates to … Read more