In an article published by the Hedge Fund Law Report, Partners Brian Mahanna, Susan Schroeder, Tim Silva and Senior Associate Jarret Zafran, examine New York Governor Andrew Cuomo’s proposal to significantly expand the powers of the state’s banking and insurance regulator—the New York Department of Financial Services (DFS)—to reach certain securities transactions and investment advice. While not yet implemented, Cuomo’s plan could give DFS gained broad jurisdiction and substantial enforcement powers over certain consumer products and services, as well as the power to levy increased penalties and seek restitution. If the Governor’s proposal is revisited and adopted in the future, DFS may aggressively assert its new powers, including areas which its powers would overlap with and occasionally surpass those of the New York Attorney General. And while the Governor has expressed his desire to augment DFS’ consumer protection powers, very little has been said about his plans to regulate securities and investment advice.
This article addresses how DFS might assert its expanded powers and the implications it would have on hedge funds.
