Benjamin Lawsky Targets Individuals on Wall Street: MBA News

New York’s top financial regulator Benjamin Lawsky is taking a tougher approach to individual misconduct on Wall Street in an ongoing campaign to clean-up Wall Street and to bring those accountable for the bad decisions leading up to the financial crisis to justice.

In an interview with The Financial Times Benjamin Lawsky stated why his efforts would be directed more towards individuals. “Corporations are a legal fiction,” he says. “You have to deter bad individual conduct within corporations. People who did the conduct are going to be held accountable.” This strategy comes in opposition to the Department of Justice’s approach which was widely criticized for not charging individuals of alleged misconduct but rather collecting large fines from the corporations and banks the individuals worked at.

Despite the fact that the New York Department of Financial Services, the department behind Benjamin Lawsky’s work, has no authority in terms of criminal offences, actions taken against individuals are pursued through civil procedures often resulting in fines. It is hoped however that the strategy of targeting individuals and not entire industries and corporations will help Wall Street’s reputation and attract more business to New York as a whole. “People do cheat,” Benjamin Lawsky tells The Financial Times. “We want to preserve the reputation of our financial sector and make people realize the vast majority of people on Wall Street and banking do good work.”

In his latest investigations, the financial regulator has turned his focus towards non-bank mortgage servicers such as Nationstar amidst questions regarding the company’s rapid growth along with complaints the New York Department of Financial Services had received from consumers.

New York Department of Financial Services involved in attempts to regulate Bitcoin

The New York Department of Financial Services was created three years ago by state governor Andrew Cuomo as a merger of the state’s banking and insurance regulators, run from the start by Benjamin Lawsky himself, a former federal prosecutor. The department now supervises 4,400 entities, with assets totaling approximately US$6.2 trillion.

Benjamin Lawsky, who is ambitious to establish New York as the financial technology capital of the world, is also involved in attempts to set up a regulatory blueprint of the Bitcoin market and other unregulated digital crypto-currencies, in order to convince Bitcoin exchange operators to set up in the state. The financial regulator’s modern approach to technology and regulation can be seen from the two hour long “ask me anything” session he hosted last month on the open forum website reddit in order to share his own knowledge as well as to learn from global reddit users about the complex and changeable world of Bitcoin. Of the session he muses; “14,000 people from 117 countries tuned into those hearings online, which was not the usual turnout we get!”