Daily Archives: December 10, 2014

The legal mastermind behind New York’s record bank fines

(Reuters) – Billions of dollars have flowed to New York state coffers thanks to headline-grabbing settlements with global banksannounced 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) 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) 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.

Read on.

New Leak Shows Scope of Luxembourg Corporate-Tax Deals

BRUSSELS–A cache of secret tax documents released Tuesday shed further light on how Luxembourg has helped multinational companies to lower their tax bills, in a second major leak that could intensify pressure on the Grand Duchy to alter its tax practices.

The latest documents, disclosed by the Washington-based International Consortium of Investigative Journalists at late evening local time in Brussels, show how 35 major companies, including Walt Disney Co. and Koch Industries Inc., used complex financial structures to funnel profits through subsidiaries in Luxembourg, potentially avoiding taxes in other jurisdictions.

One Disney subsidiary reported a pretax profit in Luxembourg of more than EUR1 billion ($1.2 billion) over four years, but it paid just EUR2.8 million of tax, according to the ICIJ, a tax rate of about 0.25%.

A spokeswoman for Disney called the disclosures “deliberately misleading, ” adding that “Disney’s global tax rate has averaged 34% over the past five years.” She said the Luxembourg arrangement hadn’t “meaningfully affected the taxes we pay in any jurisdiction globally.”

Read on.