The legal mastermind behind New York's record bank fines

Mon Dec 8, 2014 4:33am EST
 
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By Karen Freifeld

NEW YORK (Reuters) - Billions of dollars have flowed to New York state coffers thanks to headline-grabbing settlements with global banks announced by Governor Andrew Cuomo and Benjamin Lawsky, New York's first superintendent of financial services.

But little attention has been focused on Daniel Alter, the 49-year-old legal mastermind behind many of the deals.

Sources close to the settlements describe Alter, general counsel at New York's Department of Financial Services (DFS), as instrumental to crafting strategies that leverage the three-year-old agency's unique powers to extract large and sometimes painful penalties from major banks.

For example, Alter wrote the order threatening to revoke Standard Chartered's (STAN.L: Quote) license to operate in New York, which paved the way for a $340 million settlement he helped negotiate with the British bank over transactions linked to Iran, sources said. That 2012 deal put the young agency on the map.

Alter also played a key role negotiating a $2.24 billion penalty for the state against BNP Paribas (BNPP.PA: Quote) for sanctions-related violations. That settlement included an unprecedented punishment that curbed the French bank's ability to clear U.S. dollars, a core service for clients, people familiar with the settlement said.

In the latest salvo against banks, the Yale Law School graduate pushed to install monitors in Barclays and Deutsche Bank, so the regulator could study possible manipulation of foreign exchange rates from the inside, one source said.

Those investigations are ongoing and could result in more hefty penalties.

Sources familiar with the matter say Alter may soon get a higher profile because he is being discussed as a possible replacement for Lawsky, who is said to be eyeing an early 2015 departure for the private sector.   Continued...

 
Daniel Alter, general counsel at New York's Department of Financial Services (DFS), is seen in an undated handout picture. REUTERS/Handout via Reuters