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New York banking regulator Benjamin Lawsky to resign


image source greeneuropeanjournal

image source greeneuropeanjournal

Powerful New York financial regulator Benjamin Lawsky, who played a key role in penalizing the world’s largest banks billions of dollars for market and sanctions abuses, said Wednesday he will resign next month.

The announcement came hours after Lawsky, the superintendent of financial services in New York state, announced a $485 million fine against British bank Barclays for conspiring with other large banks to rig the foreign exchange market.

Lawsky plans to step down in late June after serving as the first chief of an agency created in 2011 by New York Governor Andrew Cuomo in the wake of the financial crisis, which devastated one of the state’s leading inudstries.

“I am deeply proud of the work our team has done building this new agency and helping strengthen oversight of the financial markets,” he said.

Lawsky’s tenure included crackdowns on many large foreign banks, which are required to have a charter from his office to operate in New York state.

He cast a big shadow and was depicted on the cover of the Village Voice newspaper as “Johnny Lawsky,” the sheriff “who picked a fight with Wall Street.”

Formerly a federal prosecutor, Lawsky was a major player in forcing France’s BNP Parib s to pay $8.9 billion in June 2014 for violating US sanctions on Iran.

He also was a leader in the May 2014 settlement which saw Credit Suisse ordered to pay $2.6 billion for enabling generations of Americans to evade taxes with hidden Swiss bank accounts.

Other cases focused on sanctions-busting by British bank Standard Chartered and Germany’s Commerzbank.

Lawsky has also taken pioneering steps to regulate the emerging Bitcoin market, issuing the first license for the digital currency earlier this month.

Lawsky, whose office is civil, worked closely with criminal prosecutors in the banking cases.

The 2014 annual report of the Department of Financial Services cited $6 billion in penalties against banks, insurers and mortgage companies for everything from money laundering to loan foreclosure abuse.

It also stressed the department’s goal of making top financial institution executives pay a price for wrongdoings by their companies.

He was known for exacting a tough punishment, requiring wayward companies to fire staff members responsible for the wrongdoing as a condition of a deal.

For example, Lawsky’s office required the resignation of BNP’s chief operating office in its settlement over sanctions violations.

And on Wednesday, along with the stiff fine, the Department of Financial Services on Wednesday ordered Barclays to fire four New York-based employees over forex market manipulation, in additional to those already dismissed.

Lawsky did not say what he would do next after stepping down from the DFS.

The New York Times reported he plans to start his own firm and teach at Stanford University, focusing on cybersecurity issues in both pursuits.

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