Benjamin Lawsky, the New York regulator known for aggressive investigations and headline-grabbing fines against financial firms, is stepping down, and he reportedly plans to make a living offering banks and other companies advice.
Lawsky, 45, will leave his position as superintendent of New York's Department of Financial Services in late June, his office said Wednesday.
The news release did not specify Lawsky's next step, but a New York Times article posted shortly before the announcement said he will start a New York-based legal and consulting firm focused on cybersecurity, data breaches and technology risk, citing people briefed on the matter. He will also be a visiting scholar at Stanford University, focusing on technology, the Times and Bloomberg News reported. His clients are expected to include financial institutions and technology firms, the reports said.
Lawsky, a former federal prosecutor, was tapped by New York Gov. Andrew Cuomo to lead the Department of Financial Services when it was created in 2011 by combining the state's banking and insurance supervisors. Cuomo will now be tasked with finding a successor.
The Times said that potential successors include the former federal prosecutors Michele Hirshman and Hector Gonzalez, as well as former JPMorgan Chase executive Jonathan Schwartz, though the paper said discussions on replacing Lawsky are in a very early stage.
Under Lawsky, the Department of Financial Services has become one of the nation's toughest regulators of the financial sector. It has imposed nearly $6 billion in fines and penalties against a wide range of companies, including banks, insurers and mortgage servicers.
The office has also issued new rules covering a range of industries and issues, including money laundering, insurance, foreclosure abuse, cryptocurrencies, payday lending and debt collection. His office's efforts to develop tough cybersecurity exams also drew a lot of attention.
Lawsky is "deeply proud of the work our team has done building this new agency and helping strengthen oversight of the financial markets," he said in the news release Wednesday.
Lawsky's aggressive use of the office's powers has earned him ire of many in the finance industry, who see it as excessive and publicity-seeking. He has at times clashed with regulators in Washington and abroad by regulating matters usually handled at the federal level.
His office has imposed hundreds of millions of dollars in fines on banks including Standard Chartered, BNP Paribas, Bank of Tokyo Mitsubishi-UFJ and Royal Bank of Scotland. He has also pushed for bank executives to be held personally responsible when their companies break the law.
Lawsky's office issued its latest penalty — a $485 million fine against Barclays for manipulating the foreign-exchange market — just hours before the announcement that he will step down.
The Department of Financial Services regulates all New York-chartered banks and insurers as well as foreign banks with headquarters in New York.