Lawsky to Leave DFS in June; Will Start Consulting Company

May 21 2015 | 2:31pm ET

New York Department of Financial Services Superintendent Benjamin Lawsky will step down from his position in June.

The regulater, who earned the nickname the “Sherriff of Wall Street” for his dogged pursuit of some of the world’s biggest banks during his four years in the post, will reportedly open his own consulting firm. 

The new firm will advise clients, who will presumably be major global financial institutions, on technology, cybersecurity and digital currency, three areas on which Lawsky concentrated heavily during his tenure. He will also become a visiting scholar at Stanford University’s Cyber Initiative starting in the fall, according to Bloomberg.

In addition to his work in the traditional financial sector, Lawsky was responsible for developing the most comprehensive regulatory framework on digital currencies such as Bitcoin. The proposed Bitlicense has gone through two phases of public comment and is expected to appear in final form over the next few weeks. 

Lawsky’s announcement comes the release of the final version of the Bitlicense nears, which, if enacted in its most recent draft form, would be the most robust in the nation. Industry observers expect the regulation to be released by the end of May.

Although frequently criticized by proponents of digital currency for being too negative on the topic, Lawsky was among the first financial regulators to understand the need for a thorough understanding of bitcoin how it could be used for both admirable and nefarious purposes. 

Lawsky was the first person to lead DFS, an agency set up by Govenor Andrew Cuomo in 2011 through the merger of two smaller financial regulatory agencies. Lawsky vigorously went after banking misconduct, most recently exemplified by a settlement earlier this week with five global banks regarding the rigging of foreign exchange rates. He threatened to pull banking licenses from the most serious offenders, forced them to fire executives, and argued for monitors to be placed within operational units to head off future transgressions. 

The total amount of fines and penalties secured by DFS since 2011 is more than $6 billion, according to a statement by the agency.

A replacement has not yet been named. Among those reportedly on the short list is Linda Lacewell, counsel to Cuomo, Jonathan Schwartz, general counsel for Univision Communications Inc. and Michele Hirshman, a former federal prosecutor who is a partner in in New York law firm  Paul, Weiss, Rifkind, Wharton & Garrison, according to Bloomberg. 


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