Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
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
Matthew Levine spoke about Monitorships and the latest USDOJ Monaco Memo at the American Bar Association Criminal Justice Section Tenth Annual #ABA London #WhiteCollar Institute. Also on the panel were experts Vincent DiCianni Christine Braamskamp Audrey Harris and the Honorable Robert Buckland. A video of the panel is here: https://www.youtube.com/watch?v=uG14Z7s7xzY
NYDFS issued an enforcement action against Rhinebeck Bank for alleged fair lending violations. Rhinebeck paid a $950,000 penalty. From the NYDFS findings: “The Department’s investigation found that Rhinebeck’s practices resulted in minority borrowers paying higher interest rates than non-Hispanic white borrowers for their automobile loans, without regard to their creditworthiness….Although the Department did not find … Read more
Deputy Attorney General Lisa Monaco announced needed reforms and important updates to corporate criminal enforcement policies including for monitorships. New guidance will seek transparency and consistency in how to identify, select and oversee monitors. Documented selection process and program will be oriented to tailor work plans to identified deficiencies. Aim is to keep Monitorship on … Read more
The scope of NYDFS jurisdiction is an oft-debated issue for regulated and non-regulated entities alike. To better understand how NYDFS views its jurisdiction and mission, its worth re-reading these findings from its Consent Order against Robinhood Crypto. “[I]t is worth beginning with the Department’s observation that RHC’s overall approach to its compliance obligations substantially contributed … Read more
NYDFS took an enforcement action against another insurance company, this time John Hancock Life Insurance Company. According to NYDFS findings, John Hancock prematurely terminated 156 NYS Partnership long term care policies prior to insureds exhausting benefits to which they were entitled, and miscalculated lifetime maximum benefits in cases when insureds used less than the maximum … Read more