Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
As noted in Part One of this article [LINK HERE: NYLJ11292022562493 DFSReporting Part One], issuance of the second “Monaco Memo” by the U.S. Department of Justice in October 2022 sparked debate anew about the self-reporting of misconduct by corporations. Settlements between the Justice Department and several large companies since then have brought greater clarity to … Read more
NYDFS Superintendent Adrienne A. Harris told Reuters that she expects more BSA/AML enforcement against cryptocurrency firms: “Crypto firms’ compliance with anti-money laundering rules has also been ‘a big issue,’ she said, one she expects her office will continue focusing on in 2023….”We’ve really been working hard, not just through enforcement, but through examination, and just … Read more
In a filing in New York bankruptcy court, NYDFS objected to Binance’s acquisition of the customer assets of Voyager, which has filed for Chapter 11, saying the acquisition “both furthers [Voyager’s] unlawful unlicensed crypto-currency-related activities in New York and does so to the discriminatory disadvantage of New York consumers.” Some takeaways: • DFS alleges Voyager unlawfully opened … Read more
NYDFS issued an enforcement action against Coinbase Inc., alleging a variety of compliance failures. Some details: – $50MM penalty; $50MM commitment spend on compliance; Continuation of Independent Monitor – “During much of the relevant period, Coinbase’s KYC/CDD program, both as written and as implemented, was immature and inadequate. Coinbase treated customer onboarding requirements as a … Read more
While the jury appears still to be out on what will result in imposition of a new DOJ monitorship under the Monaco Memos, if you breach a DPA — twice — you will get an extension of the Monitorship. DOJ has now extended the Ericsson monitorship arising out of an FCPA prosecution for one year. … Read more
NYDFS entered into another cybersecurity Consent Order, this time with TTEC Healthcare Solutions, Inc. an insurance broker. Cybersecurity actions have become one of the agency’s most common types of enforcement actions. This one carries a $1.9 Million penalty; some takeaways from DFS allegations include: • TTEC failed to implement adequate multi-factor authentication. • TTEC completely failed to … Read more
SELF REPORTING TO NYDFS – ITS NOT YOUR MONACO MEMO (Part One): Pleased that the New York Law Journal has published Part One of my latest article about self-reporting misconduct by financial institutions regulated by the New York State Department of Financial Services (NYDFS). Article is here: http://blogaboutnydfs.com/wp-content/uploads/2022/12/NYLJ11292022562493-DFSReporting-Part-One.pdf
As part of a global settlement with numerous attorneys general, including the New York AG, NYDFS also resolved its administrative charges of insurance fraud against pharmaceutical manufacturer Teva over misrepresentations in charges for opioid products. Notably, Teva had unsuccessfully challenged in New York State court the authority of NYDFS to investigate this conduct as insurance … Read more
NYDFS has taken another cybersecurity enforcement action, this time against vision insurance company EyeMed. NYDFS leveled a $4.5 million penalty against the company. From its findings: “The Department’s investigation revealed that as a result of a July 1, 2020 phishing attack, a bad actor gained access to a shared EyeMed email mailbox which contained over … Read more
FinCEN and OFAC teamed up to issue parallel enforcement actions against crypto exchange Bittrex, Inc. for alleged violations of BSA/AML and OFAC regulations, with penalties of $29 million and $24 million being issues, respectively. Previously in 2019, NYDFS had rejected Bittrex’s application for a license to operate in New York, finding amount other things that … Read more