A former federal prosecutor and longtime ally of New York state Governor Andrew Cuomo was picked to run the state's new and powerful financial-services agency.  Benjamin Lawsky, 41, is Cuomo's current chief of staff, and he worked closely with Cuomo in the New York attorney general's office on high-profile probes - including ARS's (auction-rate securities), the student-loan industry, Wall Street bonuses.

If confirmed by the state legislature, Mr. Lawsky would become the first Superintendent of the New York State Department of Financial Services.

    NYS Department of Financial Services.   The agency was created in April by combining New York's banking and insurance regulators into a single office.  That means it will wield a lot of clout over the financial industry.  The new financial-services regulator is set to officially begin operations 10/3/11 - so until then , Mr. Lawsky would remain Cuomo's chief of staff. 

The New York State Department of Financial Services will have a staff of more than 1,700 employees - no apparent budgetary problems, here.  Its power and reach could be enormous, given the huge number of financial firms with headquarters or operations in New York. 

The new agency was created to cut costs and bolster New York's oversight of banks and insurers, and will also attempt to prevent fraud and regulate exotic financial products that have slipped through the cracks of other regulators.  The department has consumer-protection powers and can enforce securities laws.

    Benjamin Lawsky's Profile.   Mr. Lawsky has a long track record of pursuing wrongdoing at financial institutions - and a reputation as a tough negotiator and a dogged investigator.  Originally from Pittsburgh, he was deputy counselor and special assistant to Mr. Cuomo for 4 years when Cuomo was New York's attorney general.  Mr. Lawsky shaped many of the probes and cases pursued by Mr. Cuomo during the financial crisis.

• Mr. Lawsky played a key role in reaching ARS settlements with UBS AG, Goldman Sachs Group, Citigroup and other financial firms that led to the repayment of more than $60 billion to investors.
• He helped bring attention to the U.S. government's role in the 2008 acquisition of Merrill Lynch by Bank of America Corp., leading to Congressional hearings where lawmakers questioned actions taken by Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Hank Paulson.
• He personally put financial executives on the hot seat, including former BofA CEO Kenneth Lewis Jr. and former Merrill CEO John Thain, who were pressed for details about the deal.  Cuomo's office ultimately brought civil-fraud charges against Mr. Lewis and BofA. 

Before joining Cuomo, Mr. Lawsky worked 5 years as an assistant U.S. Attorney in the Southern District of New York, where he handled insider-trading cases and prosecuted accused mobsters and terrorists.  Mr. Lawsky also was general counsel for Cuomo's gubernatorial campaign, chief counsel for U.S. Sen. Charles Schumer and a trial attorney in the Justice Department's civil division.  [WSJournal, 5/17/11]