N.Y. May Put AML Onus on Bank Execs (Mar. 3, 2015)
New York is considering a plan to hold top banking executives personally responsible for the quality and effectiveness of their firms’ AML efforts. In a speech this week at Columbia Law School, New York Dept. of Financial Services (NYDFS) Superintendent Benjamin Lawsky laid out a plan modeled on the Sarbanes-Oxley Act, which holds top bank brass personally responsible for accounting fraud, and said he hoped other regulators would adopt similar measures in monitoring AML controls.
“We are . . . considering making senior executives personally attest to the adequacy and robustness of [AML] systems,” Lawsky said. He added that the NYDFS also is considering random audits of regulated firms’ transaction monitoring and filtering systems. “We expect to move quickly on these ideas and—to the extent they are effective—we hope that other regulators will take similar steps.”
If enacted, the plan would represent a major escalation of pressure on not just financial institutions, but individual bank leaders, to step up AML controls. “Real deterrence, in our opinion, means a focus not just on corporate accountability, but on individual accountability” said Lawsky. NYDFS—which oversees banks chartered in New York and foreign banks headquartered in the state—last year forced France’s BNP Paribas to fire 13 employees, including its COO, over legal violations.
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