New York has a new top financial regulator
Thomson ReutersNew York Governor Andrew Cuomo speaks at a press conference to announce major transportation initiatives in the Manhattan borough of New York
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(Reuters) - New York Governor Andrew Cuomo tapped Maria Vullo, a lawyer who represented banks and donated to Cuomo's campaigns, as the state's top financial regulator, his office said on Thursday.
Vullo's nomination as superintendent of the New York State Department of Financial Services (NYDFS) comes eight months after former superintendent Benjamin Lawsky left the agency. Under Lawsky the NYDFS earned a reputation as an aggressive regulatory body that used creative new tactics to extract hefty fines from global banks and other financial institutions.
Cuomo said in a statement he expected Vullo to be “tough and fair” in the role, a combination that could help repair relationships with other U.S. law enforcement authorities rankled by Lawsky’s go-it-alone actions.
Vullo, 55, a partner at law firm Paul, Weiss, Rifkind, Wharton & Garrison, where she has worked for 28 years, has represented many prominent companies, including home sharing service, Airbnb Inc, the life insurance unit of Prudential Financial Inc, and a biotechnology company, according to her firm profile and court records.
She has also represented financial institutions, some of which fall under the DFS’ regulatory purview. For example, she represented a Citigroup Inc mortgage unit in a 2013 whistleblower suit filed under the False Claims Act alleging that Citi and other mortgage lenders ran afoul of contracts with government-controlled mortgage-finance companies, according to court records.
In 2010, Vullo worked as executive deputy attorney general for economic justice for 11 months under Cuomo, a Democrat, who was then the state's attorney general. She was twice selected by a state commission as a judicial contender for the state’s highest court.
Her nomination drew praise from banking advocates. "She is really smart and a really excellent lawyer," said top Wall Street lawyer Rodgin Cohen, senior chairman at Sullivan & Cromwell LLP, a New York law firm that has long advised major banks in enforcement cases.
"DFS is the most important state financial regulator in the country and requires a leader who can balance the needs of the industry with public and consumer interests," said Kathryn Wylde, president and chief executive for the Partnership for New York City, a business group. "Maria is well qualified by her years in private practice and public service," Wylde said.
Her nomination must be confirmed by New York State's legislature.
Vullo, who did not return calls requesting comment, donated nearly $84,000 to Cuomo's campaigns between 2006 and 2013, according to the nonpartisan National Institute on Money in State Politics in Helena, Montana.
Vullo's donations were not a factor in the decision, a Cuomo administration official said.
"The fact that she was politically supportive of the governor, I don’t believe for one second that it’s going to translate to a lack of independence on Maria’s part," said Jim Walden, a New York white collar defense lawyer and former assistant U.S. Attorney in the Eastern District of New York.
Created in 2011 by consolidating the state’s banking and insurance agencies, the NYDFS has been in flux since Lawsky's departure, cycling through two acting superintendents.
Lawsky, the agency's first head, grabbed headlines in 2012 when he threatened to revoke Standard Chartered Plc's license to operate in New York after accusing the London-based bank of hiding $250 billion of Iran-linked transactions from regulators.
Using a banking license as public leverage was an unusual move, creating an uproar that swept across the Atlantic and paved the way for a quick $340 million settlement with Standard Chartered. Lawsky’s actions irked U.S. authorities who were conducting a joint probe into Standard Chartered's sanctions-related violations.
(Reporting by Suzanne Barlyn and Karen Freifeld in New York; Editing by Chizu Nomiyama, Matthew Lewis, Charles levinson and Andrew Hay)
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