A New York prosecutor that Wall Street can’t stand just resigned — here’s who could take his spot

Speculation has shifted to who will replace New York State Department of Financial Services Superintendent Benjamin Lawsky, who is leaving the position to launch a legal and consulting firm.

Lawsky took the reins for DFS four years ago after Gov. Andrew Cuomo appointed him to the agency after its creation.

In the time since, he’s racked up billions in fines for DFS and spooked plenty of dealmakers on Wall Street.

Business Insider reached out to the Department of Financial Services, which didn’t comment. It’s not clear when Lawsky will relinquish his role at DFS, but that’s not stopping tongues on Wall Street from wagging.

Both lawyers and dealmakers expressed a range of emotions and ideas when Business Insider to discuss the second-ever DFS superintendent. This is what they said:

• Expect another politico: “His successor likely will have experience in the U.S. Attorney’s office for the Southern District of New York, where he or she has prosecuted securities or financial crime cases, plus experience in New York state politics, serving as counsel to a powerful state legislator or to an important legislative committee that conducts publicly visible investigations,” one legal source said. “The position has become prosecutorial, not just regulatory, and requires political savvy and backing.”
• There are a handful of former Wall Street prosecutors who could be a fit, one source says. Neil Barofsky is now a partner with law firm Jenner & Block, but before that he spent eight years as a prosecutor in the Southern District of New York. A potential drawback for Barofsky, from one legal source: “He doesn’t have a political bone in his body.”
• Maybe it’ll be US Attorney Preet Bharara’s ‘Number Two.’ Richard Zabel went from being in the US Attorney’s office to private practice, back to the US Attorney’s office in the Southern District. Today, he’s the deputy US attorney in the Southern, and widely viewed as US Attorney Preet Bharara’s ‘Number Two.’ “I don’t think anyone would question his prosecutorial chops,” one source opined.
• This person should have some private sector experience. Another former regulator says there is a need for a DFS superintendent with at least some private sector chops. “The best candidate would be one with public and private sector experience,” said Roy Gaffer, an ex-SEC lawyer who today works for law firm Sadis Goldberg.
• One candidate is Jonathan Schwartz, a former Wall Street pro who has spent years working in the cable industry. He’s currently general counsel for Univision and has experience with other entertainment companies. His mix of private- and public-sector experience makes him a potential fit for the role, in one source’s view.
• Hector Gonzalez could be the guy. He is another legal eagle who has experience prosecuting crimes in the Southern District of New York. Now, he’s at law firm Dechert. When news of Lawsky’s departure broke, the New York Times reported Gonzalez is considered as a potential candidate to replace him.
• David Meister might be the right person. He’s a partner with law firm Skadden. He’s also a veteran of the Commodity Futures Trading Commission, where he was enforcement director. Before that, Meister was also a prosecutor in the Southern District of New York.
• A long-shot for the seat is Carrie Cohen, a legal source said. She is a Southern District prosecutor with some private sector experience, but most of her work has come as a prosecutor. The biggest drawback for Cohen right now is the fact that she’s also in charge of prosecuting New York State assemblyman Sheldon Silver. This could earn her political enemies.
• Few in the banking sector are upset Lawsky is leaving office. “Ding-dong, the witch is dead!” one banking source said in jest, on the news Lawsky was leaving.

Lawsky developed a reputation for tough on insurance M&A transactions during his tenure, sometimes holding up a deal to get private equity firms and insurers to produce paperwork to justify their transactions.

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SOURCE: Business Insider – Read entire story here.