New York Attorney General Eric Schneiderman Expands Financial Crimes Unit
New York Attorney General Eric Schneiderman has tasked his existing criminal bureau with cracking down on financial wrongdoing two years after governor Andrew Cuomo created a regulator with a similar directive.
Gary Fishman, a former state prosecutor in the Manhattan District Attorney's Office, will head the Criminal Enforcement and Financial Crimes Bureau, an expansion of the Criminal Prosecutions Bureau, the attorney general's office said on 17 December.
Illicit Financial Activities
bad actors who seek to take advantage of their competitors and their neighbors must be stopped and punished.
The attorney general's office can initiate criminal investigations and prosecutions on its own or at the behest of the federal government or state agencies such as the Department of Financial Services (DFS).
Schneiderman's new bureau will focus on fighting securities and investment fraud, money laundering, tax crimes, mortgage fraud, investment schemes, and insurance fraud, the statement said.
The bureau will also create a Financial Intelligence Section to initiate investigations into illicit financial activities and track the flow of suspicious funds by reviewing banking, regulatory, law enforcement, and open-source data, it added.
BoA-Merrill Deal
The attorney general's office also said that it would abandon its damages claims against Bank of America over its 2009 acquisition of Merrill Lynch. Schneiderman is still pursuing the case without that claim, a spokesman for the office told Bloomberg.
The state accused BoA of misleading shareholders about losses at Merrill Lynch to secure approvals for the $18.5bn deal and then manipulating the federal government into allotting bailout funds from the Treasury Department's Troubled Asset Relief Program to execute the deal.
That lawsuit also seeks an order barring individuals from the securities industry and from serving on public boards.
Bank of America spokesman Lawrence Grayson refused to comment on Schneiderman's decision to drop damages claims in the state court case.
Market Enforcement
"Under Gary's leadership, our newly created Criminal Enforcement and Financial Crimes Bureau will ferret out the bad actors in our critically important financial sector in order to protect our economy and investors. Financial industry leaders who play by the rules deserve a level playing field, and those bad actors who seek to take advantage of their competitors and their neighbors must be stopped and punished," Schneiderman said in the statement.
New York has stepped up market enforcement since the financial crisis. In 2011, Cuomo merged the state insurance and banking regulators into the DFS under Benjamin Lawsky, a top prosecutor when Cuomo was attorney general
In 2010, Manhattan District Attorney Cyrus Vance Jr. formed a major economic crimes unit, where Fishman was principal deputy chief.
Lawsky's department keeps an eye on about 1,900 banks and other financial institutions with assets in excess of $2.9tr and nearly 1,700 insurance companies with more than $4.2tr, according to its website.
Lawsky was the top financial crimes prosecutor under then-Attorney General Cuomo and was a part of the effort to compel banks, that received government bailouts, to divulge information about bonus payments.
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