New York's top banking regulator Benjamin Lawsky, who used his leverage to stiffen penalties against some of the world's largest financial institutions, will probably step down next year to take a job in the private sector, said a person familiar with the matter.
Lawsky, 44, was appointed by Governor Andrew Cuomo to head the newly formed Department of Financial Services in 2011, with a mandate to regulate state-licensed banks and insurance companies. He became widely known the following year for threatening to revoke Standard Chartered (STAN) Plc's license to operate in New York after growing frustrated with the slow pace of settlement talks over sanctions violations.
He also introduced the concept of a "BitLicense" as a way to properly regulate Bitcoin businesses without shoehorning them into existing money transmitter rules. Since then, his view has evolved to treat the BitLicense process as a way to modernize regulation for all payment startups.
It isn't yet clear who Cuomo will name to fill the position after Lawsky resigns. Cuomo combined New York's bank regulatory department and its insurance division to create DFS in the aftermath of the financial crisis, forming a new state regulator that could monitor hybrid products marketed by all kinds of financial institutions.
"He loves his job and is very busy doing it to the best of his ability each day," said Matthew Anderson, a spokesman for Lawsky. "He hasn't decided on his plans for the future." Lawsky wasn't immediately available to comment on his plans.
Lawsky broke ranks with other authorities when he issued a public letter in August, 2012 outlining the scope of Standard Chartered's problematic transactions and demanding to know why he shouldn't revoke its license.
Officials at the Manhattan District Attorney's office, the Federal Reserve, the Treasury and Justice Departments fumed over Lawsky's action, which had upstaged and embarrassed them, according to people briefed on the matter at the time.
Standard Chartered, which is based in London, settled with Lawsky that month for $340 million and agreed to hire a monitor. The other regulators wound up with a smaller settlement — $327 million — four months later.
Lawsky was also behind the partial suspension of Paris-based BNP Paribas (BNP) SA's dollar-clearing operations in New York and an agreement not to employ 13 key executives as part of its $8.97 billion settlement for sanctions violations in June.
Lawsky's expected departure was reported earlier by the New York Daily News.