116 Colum. L. Rev. Online 1 (2016)

handle is hein.journals/sidbarc116 and id is 1 raw text is: 







           COLUMBIA LAW REVIEW SIDEBAR

VOL.  116                  JANUARY   04, 2016               PAGES   1-16

  EXECUTIVE LIABILITY FOR ANTI-MONEY-LAUNDERING
                             CONTROLS

                        Christina Parajon Skinnet


     In March 2015, the New  York State Department  of Financial Services
(DFS)  entered  into a consent order  with a major  German   bank  (with
New  York  affiliate branches), Commerzbank   AG, regarding  that bank's
violations of state and federal anti-money-laundering (AML)   laws.' And
Commerzbank has now paid $1.45 billion to the   U.S. government   to set-
tle the allegations that it improperly facilitated business for Iran, Sudan,
Cuba,  and Myanmar,   and abetted a multibillion-dollar securities fraud
for ajapanese company.2
     The Commerzbank case is   just one of several in a recent spate of in-
ternational money  laundering scandals.3 These cases have prompted  reg-
ulators to question the effectiveness of existing money laundering  con-
trols and provoked thought  about the optimal design of AML  regulation.
This Essay considers one recent proposal for bolstering the existing AML
regime. In particular, the Essay considers the merits of a February 2015
proposal by the former superintendent of New  York State's Department of
Financial Services, Benjamin Lawsky,  to increase senior executives' per-
sonal responsibility for a financial institution's AML controls.4
     In a broad  sense, the Essay  endorses more   robust individual ac-
countability for AML compliance.  The  specter of personal liability would


    *  Associate-in-Law, Columbia Law School. I'm grateful to Cathy Hwang, Geeyoung
Min, Henry Monaghan, and William Skinner for very helpful feedback on this draft.
Thanks also to the editors of the Columbia Law Review, especially Bridget Johnston.
     1. See Consent Order Under New York Banking Law  39, 44, at 1, In the Matter of
Commerzbank  AG (N.Y. Dep't. of Fin. Servs., Mar. 12, 2015), http://www.dfs.ny.gov/ab
out/ea/ea150312.pdf [http://perma.cc/H2JL-KV5D] (stating Commerzbank is major
international banking institution with . . . assets exceeding $670 billion); Press Release,
Dep't of Fin. Servs., NYDFS Announces Commerzbank to Pay $1.45 Billion, Terminate
Employees, Install Independent Monitor for Banking Law Violations (Mar. 12, 2015),
http://www.dfs.ny.gov/about/press2015/prl503121.htm [http://perma.cc/3UR4-TD24]
(Commerzbank turned a blind eye to its anti-money laundering compliance responsibili-
ties. (internal quotation marks omitted)).
     2. Samuel Rubenfeld & Eyk Henning, Commerzbank Settles U.S. Allegations of
Sanctions, Money-Laundering Violations, Wall St. J. (Mar. 12, 2015), http://www.wsj.com/
articles/commerzbank-to-settle-u-s-allegations-of-sanctions-and-money-laundering-violation
s-1426177346 (on file with the Columbia Law Review).
     3. See infra section I.B (discussing recent money laundering scandals).
     4. Benjamin Lawsky, Superintendent, N.Y. Dep't. of Fin. Servs., Remarks on Financial
Regulation in New York City at Columbia Law School (Feb. 25, 2015), http://www.dfs.ny.g
ov/about/speeches/sp150225.htm [http://perma.cc/Z89X-26J1] (describing proposal).


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