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New York's Top Financial Regulator To Step Down

His next move: Stanford University, and starting up his own consultancy focused on cybersecurity.

Posted on May 20, 2015, at 1:31 p.m. ET

Lucas Jackson / Reuters

Ben Lawsky, the first head of New York state's combined financial regulator, will leave his job in late June, his office said in a statement.

Since taking the top job at the newly-created Department of Financial Services in May, 2011, Lawsky quickly turned into a high-profile regulator, especially for foreign banks operating in the United States.

A former prosecutor and staffer for Governor Andrew Cuomo, Lawsky sometimes clashed with fellow regulators and would enact harsher sanctions than his federal and law enforcement colleagues. One such incident came when he threatened to essentially banish Standard Chartered, the British bank, from operating in the United States, over allegations that it had laundered money for Iranian companies and individuals in violation of U.S. sanctions.

Lawsky ultimately extracted a $340 million penalty from Standard Chartered, and put his office on the map after less than a year in business.

"I am deeply proud of the work our team has done building this new agency and helping strengthen oversight of the financial markets. We have assembled a great team at NYDFS and I have full confidence that the critical work of this agency will continue seamlessly moving forward," Lawsky said in a statement.

After leaving DFS, Lawsky will head west to be a visiting scholar at Stanford University's Cyber Initiative and will start and law and consulting firm that will focus on cybersecurity and payments issues, a source familiar with Lawsky's plans told BuzzFeed News. The firm will be based in New York and Lawsky will not appear before DFS in his role at the new company, the source said.

Lawsky's office has taken an interest in payments and cybersecurity issues recently, including working on a regulatory framework for Bitcoin companies along with heightened standards and examinations for cybersecurity at insurance companies.

Over his time in office, Lawsky won several large sanctions and money laundering settlements and eventually started to insist that banks dismiss some employees as a condition of settling with the department.

"If you don't hold them accountable, it's Groundhog Day, you're going to get a big settlement and they're going to do it again in a couple years," Lawsky told BuzzFeed News in an interview last year.

Just today, Barclays paid a $485 million penalty to the DFS as part of its deal with regulators and law enforcement agencies over currency manipulation. A spokesman for DFS declined to comment beyond the statement putout by DFS.

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