Let a financial wrongdoer off scot-free? That wouldn’t be good for New York Financial Services Superintendent Benjamin Lawsky’s future political career, and so it is not how New York Financial Services Superintendent Benjamin Lawsky operates. Now, unlike certain lazy, weak-willed, tea-drinking regulators, Benjamin Lawsky can’t put anyone in jail. But that doesn’t mean he’s going to let any Wall Street scofflaw escape responsibility, even if it is the easy way out. Read more »
Last time Standard Chartered had a little run-in with Benjamin Lawsky—you know, for money laundering for the ayatollahs—it walked away $340 million lighter. It also promised to pay some extra attention to the kinds of things that Benjamin Lawsky might want it to pay attention to.
The firm, which is accused of lacking the objectivity and integrity expected of consultants but not actually breaking the law, agreed to pay the fine and accept the two-year sidelining of its regulatory consulting unit. PricewaterhouseCoopers appeared to have had little choice: Mr. Lawsky’s office, which has the authority under a little-known New York law to censure erring consultants even without a legal violation, threatened to otherwise inflict a more sweeping and lengthy prohibition…The settlement involves the firm’s work for the Japanese banking giant, which regulators long suspected of routing money through its New York branches on behalf of nations blacklisted by the United States. The bank voluntarily hired PricewaterhouseCoopers in 2007 to quantify its improper transactions with Iran and other sanctioned countries. [Dealbook]
Back in 2009, hedge fund manager Phil Falcone came up with an idea considered genius only if you take an elastic view of securities laws, which Falcone certainly did (does?). Upon being notified by his personal accountants that he owed the government more than $100 million in state and federal taxes, and turning down the suggestion to borrow against various assets including his Manhattan townhouses, artwork, interest in the Minnesota Wild, and an estate on St. Bart’s, Falcone decided to just borrow the money from a gated investor fund, despite being told in no uncertain terms it was a bad idea by Harbinger’s “longstanding” outside counsel. Investors in that fund turned out not to like the idea very much, with the SEC feeling similarly. But while the regulator felt 5 years (plus an $18 million fine) was enough time for Falcone to really think about what he’d done– a punishment Falcone described as a blessing in disguise–, the New York Department of Financial Services felt otherwise. Read more »
That $10 million fine he slapped on Deloitte for doing shoddy work may be only the beginning, of both a crackdown on consultants and, even more likely, a run for state comptroller/attorney general/governor/president/city comptroller (the latter if there should be a hiccup in the former path). Read more »
Bank consulting is a cushy, lucrative business, what with all of the handsome fees and the total lack of supervision to ensure that you are doing your job well. Or at all.
Unfortunately for those of you who work in New York, Benjamin Lawsky has discovered a 121-year-old law that basically lets him put you out of business if he doesn’t like the work that you are doing (or not doing). And in the tradition of the immortal Eliot Spitzer, he’s going to use it to show you (and the federal government) up. Read more »