In a speech at Columbia Law School, NYDFS Superintendent Benjamin Lawsky warned that the department may start to hold bank executives personally responsible for their institution’s AML controls. According to Lawsky, the NYDFS may soon extend the same certifications currently required from senior executives regarding banks’ financial statements for their institutions’ transaction monitoring systems. NYDFS’ rules would be modeled after the Sarbanes-Oxley Act, which holds senior executives personally liable for accounting fraud. Lawsky also warned that the NYDFS may start to randomly audit AML systems to determine if they adequately identify suspicious activity.
Lawsky was one of the first state regulators to use a provision in the federal Dodd-Frank Act to enforce consumer protections on the state level. His comments are in line with his aggressive approach to financial regulation.
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