- Vullo confirmed to lead DFS after four months as acting chief
- Initial forays into bank ties to Panama Papers, 1MDB probes
Maria Vullo was tired of being asked about the last guy to police New York’s banks -- whether she would be a “sheriff” like him and if she could fill his boots.
“I don’t wear boots,” she told a committee of state senators last week. “I am going to be Maria Vullo.”
The state’s senators unanimously approved Vullo as the superintendent of New York’s Department of Financial Services on Wednesday, a year after the exit of the last permanent superintendent. The job gives Vullo, a 52-year-old lawyer from Brooklyn, oversight of banks and insurers that operate in the U.S. though a New York state charter -- a group that includes Goldman Sachs Group Inc., Barclays Plc, BNP Paribas SA, Deutsche Bank AG and Societe Generale SA.
That predecessor, of course, was Benjamin Lawsky, a hard-charging enforcer who brought landmark sanctions and benchmark-manipulation cases against international banks chartered in the state, at times breaking from the pack of authorities in the U.S. and Europe to reach his own settlements. Lawsky ultimately levied nearly $6 billion in fines and penalties against big banks, leaving many financial firms grumbling about the need for a less aggressive regulator.
Vullo has made few waves since taking over as acting superintendent in February. But with Wednesday’s confirmation behind her, she’ll now have more leeway to act on her own. A seasoned litigator with some enforcement experience, her hallmark cases have been in defense of individual victims, not in pursuit of big institutions. While she promises to keep DFS’s profile high, she also vows to be balanced. So far, at least, the Sheriff of Wall Street is keeping her pistols holstered.
Vullo’s resume includes some financial enforcement cases brought during her year overseeing the Economic Justice Division under then-state attorney general Andrew Cuomo, now New York’s governor. Most recently, she was at Paul, Weiss, Rifkind, Wharton and Garrison LLP, where she handled pro-bono litigation focused on the rights and safety of women, including victims of rape in Bosnia.
Those priorities are already apparent at DFS, where Vullo has ordered insurance companies to let victims of domestic violence sign up for health coverage at any time, not just during the usual end-of-year sign-up period.
“I have a bias towards real people and doing things that impact real people,” Vullo said in a recent interview. But she is determined to be aggressive and fair in all types of cases, she added.
“Ben did a tremendous job in this post, but I’m not stepping into anybody’s shoes,” she said. “What I do will depend on the issues presented to me. I want DFS to be important. I want this agency to be a player.”
Her initial approaches to bank investigations have been measured.
In April, after a massive document leak from a Panamanian law firm revealed how some of the world’s wealthiest people use offshore accounts and other tax maneuvers, Vullo ordered more than a dozen banks mentioned in the documents to disclose any dealings their New York branches or New York employees had with the shell companies. The banks aren’t accused of wrongdoing.
To her, digging into the relationships between the banks she regulates and Panamanian shell companies was a no-brainer.
“I’m all over that,” Vullo says in her Brooklyn accent. “Why wouldn’t I be all over that?”
Last week she ordered Goldman Sachs to tell her office about all the internal and external investigations of the Wall Street bank related to its work raising $6 billion for 1Malaysia Development Bhd., a Malaysian investment fund at the center of a series of international corruption investigations. The bank hasn’t been accused of wrongdoing.
A grandchild of Italian immigrants and the youngest of five children, Vullo went to grade school and high school in Brooklyn, attended Mt. Saint Vincent College in the Bronx and earned her law degree at New York University in Manhattan. She spent 27 years at Paul Weiss, where, in addition to commercial litigation, she represented clients in civil, criminal and regulatory matters.
There, in 1996, she volunteered to work on behalf of Planned Parenthood after an anti-abortion group created an Old West-style poster of abortion providers and declared them “Unwanted.” Several abortion doctors had already been murdered after individual posters identifying them had been posted around the areas where they lived.
Bringing the civil case in Oregon, where she could accuse the anti-abortion group leaders of violating RICO organized crime laws, Vullo won a jury trial and a judgment of more than $100 million in compensation and damages.
‘Smart and Creative’
“Maria is extraordinarily smart and creative with terrific instincts and wise judgment,” said Brad Karp, chair of Paul, Weiss, whose major clients include nationally chartered banks Citigroup Inc. and JPMorgan Chase & Co., which are overseen by the Office of the Comptroller of the Currency.
In 2000, Vullo won a $745 million judgment against Serbian leader Radovan Karadzic on behalf of Bosnian women raped by Serbians in the Balkan conflicts of the early 1990s.
Vullo’s one foray into the world of financial regulation took place six years ago at the New York Attorney General’s office, where Vullo built financial cases, like Lawsky before her.
She brought a suit against Ernst & Young LLP, the accounting firm that approved “Repo 105," the controversial accounting maneuver that Lehman Brothers Holdings Inc. used to burnish its quarterly income statements. Ernst & Young settled the case last year for $10 million. Vullo was also behind Cuomo’s suit against Ivy Asset Management LLC, which accused the firm of misleading its clients about Bernard Madoff’s funds. Ivy, a unit of Bank of New York Mellon Corp., settled the matter for $210 million.
In a confirmation hearing, one senator asked whether Vullo would be a Lawsky-style “crusader” -- eliciting her comment that she is an independent actor who wasn’t planning to walk in anyone’s shoes but her own.
While many ordinary Americans still wonder why bankers weren’t jailed after the financial crisis, executives complain that aggressive regulators like Lawsky did more harm than good, at least for the financial industry.
Kathryn Wylde, president of the Partnership for New York City, which represents the city’s business interests, says many in the financial community feel they were vilified unfairly and that Vullo might be able bind up some old wounds.
“She’s going to help address some of the real grievances the financial industry has had over how they’ve been treated,” Wylde says. “All people are asking for is fairness.”
At last week’s hearing, state senators in Albany asked whether Vullo would be able to balance the enforcement aspects of the job with the dual role of promoting the growth of the banking and insurance industries in the Empire State.
“I am pro-business. I am pro-industry,” Vullo said, adding that she’d already met with various insurers to hear their concerns. “I want them to grow. I want jobs to stay in New York. I think balance is an appropriate word. I’m a Libra, so maybe that comes naturally to me.”
A full indication of Vullo’s enforcement style may not be immediately forthcoming, though. Lawsky was in the job a full year before his threat to remove the banking license of Standard Chartered Bank Plc gained him international notoriety.