Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
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
According to NYDFS: “As part of DFS’s work to become a leading, data-driven regulator of the global financial services sector, the Department has been assessing a number of technology tools and service providers to augment current supervisory capabilities. Accelerating the procurement process is a critical step to strengthen the Department’s ability to enforce anti-money laundering … Read more
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
NYDFS completed its first investigation by the new Office of Pharmacy Benefits regarding a price spike. According to NYDFS findings: “Cipla has entered into an agreement with OPB to put in place new internal controls governing the reporting of drug prices and will report on the implementation and maintenance of those new controls in one … Read more
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
NYDFS penalized Columbian Mutual Life Insurance Company for allegedly failing to comply with New York law concerning unclaimed life insurance proceeds. Enforcement takeaways: – Recent enforcement efforts continue focus on Insurance Industry. – Consent Order for failing to comply with New York law governing unclaimed life insurance proceeds. – Investigation found company failed to cross-check … Read more
NYDFS announced a $3 million settlement with Pacific Life Insurance Company for engaging in the pension risk transfer business in New York without being licensed. NYDFS maintains its long-term focus on penalizing financial companies that conduct business in New York without the necessary license; this is construed as an unfair competitive advantage by the regulator. The resolution may be found here:
https://www.dfs.ny.gov/system/files/documents/2021/12/ea20211221_co_pacific_life.pdf
Matthew Levine and Ilene Jaroslaw teamed up to discuss how the federal regulatory and prosecutorial enforcement focus is shifting to cryptocurrency exchanges. The article in the New York Law Journal is found here: New York Law Journal – Biden Administration Increasingly Focused on Crypto Exchanges – Nov 29 2021
NYDFS Issued a $100 million to Mashreqbank. Enforcement takeaways:
– Conduct is failing to implement an effective OFAC compliance program, submitting incomplete reports to NYDFS, and failing to report misconduct to NYDFS;
– Conduct relates to violations of federal economic sanctions against Sudan
– NYDFS previously penalized Mashreq Bank $40 million in 2018 for a deficient BSA/AML program;
– No monitor imposed;
– Parallel actions by OFAC and the Federal Reserve Board.
The enforcement action may be found here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr20211109