News

NYDFS Uses New Powers to Investigate Alleged Price Spikes in COVID-19 Medicines, Targeting Non-Licensees

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Continuing its focus on consumer protection enforcement, the New York State Department of Financial Services (“DFS”) announced an investigation into alleged price spikes for six drugs connected to treatments of COVID-19 medical conditions.[1]  According to DFS, its newly-formed Office of Pharmacy Benefits (“OPB”) commenced the investigations under Insurance Law § 111 into what it characterizes as “anomalously large spikes” in the prices of the six drugs, occurring since the onset of the COVID-19 pandemic.  These medications are Ascor, Budesonide, Dexonto, Mytesi, Duramorph and Chloroquine phosphate, each of which has some actual or claimed therapeutic use for COVID-19 conditions. More detail on this investigation can be found on my blog post for the NYU Program on Corporate Compliance and Enforcement, here:

New York State Department of Financial Services (“DFS”) Uses New Powers to Investigate Alleged Price Spikes in COVID-19 Medicines, Where Targeted Pharma Manufacturers Are Not DFS Licensees

 

NYDFS Issues Fair Lending Report on Goldman Sachs Apple Card

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A lengthy declination letter: What happens when a regulator conducts an investigation and finds no wrongdoing? For its fair lending inquiry of Goldman Sachs co-branded credit card, the Apple Card, NYDFS issued a report on March 23, 2021 that resembles a lengthy declination letter. The report makes clear after “exhaustive review of documentation and data” NYDFS failed to uncover “evidence of deliberate or disparate impact discrimination.” Other notes:
– The investigation commenced following a viral Tweet from a tech entrepreneur alleging his wife received less favorable terms under the Apple Card.
– Tweets and other social media are increasingly visible sources for investigations (worthy or not)
– NYDFS undertook a massive statistical analysis as part of its investigation, finding no wrongdoing
– Goldman Sachs offered strong cooperation and a consumer-oriented program to assist people with inadequate credit ratings to improve their credit, a program it called “Path to Apple Card”
– 70,000 consumers enrolled in “Path to Apple Card” and about 5,000 of them have been approved for an Apple Card
– The report contains valuable guidance on the agency’s current thinking on fair lending

The report is here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202103231

MATTHEW LEVINE JOINS “BANK TALK” PODCAST ON THE ANTI-MONEY LAUNDERING ACT OF 2020

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Matthew Levine joined Trish Sullivan of Deutschebank and Chris Boehing of Paul Weiss Rifkind Wharton & Garrison to discuss the new anti-money laundering amendments to the Bank Secrecy Act for theis episode of the International Institute of Banker’s podcast “Bank Talk.”   The podcast can be found here:    

WHAT IS A REGULATOR’S FAVORITE SNACK? LOW HANGING FRUIT — RISK ALERT FROM SEC DIVISION OF EXAMINATIONS

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What is a regulator’s favorite snack? Low hanging fruit: the recent Risk Alert from the SEC’s Division of Examinations concerning Suspicious Activity Reporting (SAR) for Broker-Dealers indicates a cornucopia. Some examples found by the Division:
– Firms failing to report as suspicious large deposits of low-priced securities that were immediately followed by liquidation of those positions and wiring out of the proceeds
– Firms failing to report noticeable customer sales of shares occurring simultaneously with explicit promotional activity
– Firms failing to tailor red flags to address risks associated with trading activity commonly engaged in by customers
– For cyber-intrusions, firms failing to include in a SAR known details concerning the nature of the scheme, including theft of assets or funds

Periodic check ups on policies, procedures, governance and systems surrounding SAR reporting are a key means of avoiding the consequences of a deficiency letter or enforcement action.  The alert is here:

https://www.sec.gov/files/aml-risk-alert.pdf