Eric Schneiderman’s many tangles with financial firms
May 8, 2018 1:10 PM
The many times N.Y. AG Eric Schneiderman tangled with banks
Eric Schneiderman's swift downfall this week elicited glee from President Trump's supporters , many of whom painted him as a hypocrite for his vocal support of the #MeToo movement only to be felled by accusations by four women that he abused them . (Schneiderman has denied the allegations but announced his resignation from office Monday.)
But Trump fans weren't the only ones celebrating. Since taking office in 2011, Schneiderman has been a thorn in the side of financial institutions, using his state’s significant clout to affect national policy debate on a host of topics ranging from dark pools to cryptocurrencies. In addition, some of the industry’s heftiest fines came at the hands of the AG, who vigorously pursued what his office saw as wrongdoing.
Here’s a look back at how Schneiderman has made his mark on the ways financial institutions do business.
But Trump fans weren't the only ones celebrating. Since taking office in 2011, Schneiderman has been a thorn in the side of financial institutions, using his state’s significant clout to affect national policy debate on a host of topics ranging from dark pools to cryptocurrencies. In addition, some of the industry’s heftiest fines came at the hands of the AG, who vigorously pursued what his office saw as wrongdoing.
Here’s a look back at how Schneiderman has made his mark on the ways financial institutions do business.
Andy Dean Photography/Andy Dean - Fotolia
Foreclosure settlements
To date, Schneiderman has wracked up seven settlements with large banks over their actions from the financial crisis.
The most recent ones came in March when New York announced a$500 million settlement with the Royal Bank of Scotland and a $230 million settlement with UBS . Both settled over allegations they engaged in deceptive practices related to the sale and marketing of residential mortgage-backed securities prior to the crisis.
He took similar actions against JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley.
All told, Schneiderman's work resulted in total cash and consumer relief of nearly $4 billion.
The most recent ones came in March when New York announced a
He took similar actions against JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley.
All told, Schneiderman's work resulted in total cash and consumer relief of nearly $4 billion.
Daniel Tepper/Bloomberg
Wells in his sights
When an internal review by Wells Fargo showed the company may have charged hundreds of thousands of people for unwanted auto insurance — possibly pushing thousands into default as a result — Schneiderman was quick to pounce.
He, along with the New York State Department of Financial Services,sent subpoenas to the bank demanding details from its auto lending unit.
He, along with the New York State Department of Financial Services,
Defending CFPB's mission
Schneiderman was one of 17 attorneys general who criticized Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, shortly after he took office.
The group of AGs said that many of Mulvaney's past statements about the agency, including calling it a "sick, sad" joke, disqualified him from office.
"Such statements about an agency that has helped millions of American consumers and achieved fundamental reform in a number of critically important areas of American commerce are categorically false, and should disqualify Mr. Mulvaney from leading the agency, even on an acting basis," the AGs wrote.
The group of AGs said that many of Mulvaney's past statements about the agency, including calling it a "sick, sad" joke, disqualified him from office.
"Such statements about an agency that has helped millions of American consumers and achieved fundamental reform in a number of critically important areas of American commerce are categorically false, and should disqualify Mr. Mulvaney from leading the agency, even on an acting basis," the AGs wrote.
Dark pools
In 2016, Schneiderman announced that Barclays Capital and Credit Suisse had agreed to pay $154.3 million to settle allegations of deceptive practices related to the marketing of so-called "dark pools" and other high-speed electronic equities trading services. Dark pools are private exchanges for trading securities that are done outside of stock exchanges.
Barclays paid a penalty of $70 million, split between New York and the Securities and Exchange Commission, while Credit Suisse agreed to pay $60 million to the two agencies and an additional $24.3 million in disgorgement to the SEC related to other violations.
Barclays paid a penalty of $70 million, split between New York and the Securities and Exchange Commission, while Credit Suisse agreed to pay $60 million to the two agencies and an additional $24.3 million in disgorgement to the SEC related to other violations.
Crypto inquest
New York has long kept a tight leash on cryptocurrency exchanges, forcing those who wish to do business in the state to apply for a BitLicense. Some firms opted to leave the state instead rather than comply.
In April, Schneiderman upped the ante andlaunched a “fact-finding inquiry,” asking 13 cryptocurrency exchanges to detail their internal controls and how they protect customer assets.
Many firms welcomed the chance to work with the AG, but at least one CEO was not thrilled: “Somebody has to say what everybody’s actually thinking about the NYAG’s inquiry,”tweeted Jesse Powell , the CEO of San Francisco-based Kraken. “The placative kowtowing toward this kind of abuse sends the message that it’s ok. It’s not ok. It’s insulting.”
In April, Schneiderman upped the ante and
Many firms welcomed the chance to work with the AG, but at least one CEO was not thrilled: “Somebody has to say what everybody’s actually thinking about the NYAG’s inquiry,”
