Promontory Financial Group

Promontory Financial Group is a global consulting firm that advises clients on a variety of financial services matters, including regulatory issues, compliance, risk management, liquidity, restructuring, acquisitions, due diligence, internal investigations and cyber security.

Organization

The company was founded by former U.S. Comptroller of the Currency (1993−98) beneath the administration of Bill Clinton Eugene Ludwig and Alfred H. Moses who also works for the most prestigious international law firm Covington & Burling LLP. It is based in Washington, D.C. and has 14 additional offices and affiliates worldwide, in Atlanta, Brussels, Denver, Dubai, Hong Kong, London, Milan, New York City, Paris, San Francisco, Singapore, Sydney, Tokyo, and Toronto.

Promontory Financial is interdependent with farther-affiliated companies which have similar names:^[3]

• Promontory Forensics Solutions, LLC
• Promontory Growth and Innovation
• Promontory Human Capital Solutions
• Promontory Interfinancial Network, LLC

It is a contributor and supporter of the Group of Thirty.^[4]

Employees

Approximately 170 of the consultants working for Promontory were former employees of authorities in financial supervision, hence, the enterprise applies as a sort of "shadow regulator" for the Wall Street.^[1]

Former chairman of the United Kingdom Financial Services Authority Sir Callum McCarthy is non-executive chairman of Promontory Financial Group (U.K.). Former managing director of the United Kingdom Financial Services Authority Michael Foot is global vice chairman.^[5] The branch for Europe in Brussels is currently represented by Raffaele Cosimo who worked before for the Banca Nazionale del Lavoro in Rome. Elizabeth McCaul is partner-in-charge of the firm's New York office.

Former executives include the deceased former Italian Minister of Economy and Finances Tommaso Padoa-Schioppa, who was chairman of Promontory Financial Group Europe; and previous Assistant Secretary for Financial Institutions, U.S. Treasury David Nason and Federal Reserve Governor Sarah Bloom Raskin, who were managing directors. The ex-chairman of the U.S. Securities and Exchange Commission Mary Schapiro joined Promontory in April 2013 as managing director and chairman of its governance and markets practice.^[6]

Engagements

Among other things, Promontory Interfinancial Network offers services in the sector of the Certificate of Deposit Account Registry Service (CDARS). With these proceedings high deposit investments are split with a multiplicity of different financial institutes through smaller amounts which lie under the limits (until end of year 2013 $250,000) of the deposit insurance from the Federal Deposit Insurance Corporation (FDIC). With more than 3000 partner organisations Promontory coverages in this manner deposits as much as $50 million. Although Promontory receives the fees, the protection is performed actually by the FDIC.

Because of the high losses within the scope of foreign exchange market business with the Allied Irish Bank Promontory examined the sequences within the bank and came in the "Ludwig Report", published on the 14 March 2002. The trader John Rusnak who was responsible for a large part of the losses and was fired therefore, has not received any active help from within the bank or the outside. The internal control mechanisms and audits have been insufficient, and still could have reduced the extent of the losses with consequent use clearly.^[7]

Promontory advised further the government of the United States and from other countries like Cameroon and Iceland.^[8] At last the enterprise got publicity, because it was recruited to carry out by order of the Holy See a comprehensive investigation of all customer contacts of the Institute for the Works of Religion (Italian: Istituto per le Opere di Religione – IOR), often also called the Vatican bank, on money laundering guided by Elizabeth McCaul (Chief Executive Officer of Promontory Europe) and Raffaele Cosimo (Chief Operating Officer of Promontory Europe).^[9][10]

For the execution of Foreclosure Reviews from more than 250,000 loan contracts for the Bank of America, PNC Financial Services and Wells Fargo Promontory received $927 million which led to strong criticism and doubt about the independence of the examination.^[11] A hearing was arranged by the U.S. Senate Banking Committee to check whether too many duties of the finance supervision were alienated by authorities to private companies.^[12]

References

1. ↑ 1.0 1.1 Horwitz, Jeff; Aspan, Maria (15 March 2013). "How Promontory Financial Became Banking's Shadow Regulator". American Banker Magazine. Retrieved 15 July 2013. With close to 400 employees and some 1,400 consulting engagements under its belt, Promontory Financial Group has built a shadow network between banks and regulators. The firm is a sort of ex-regulator omnibus, capable of forecasting, mimicking and occasionally even substituting for the financial industry's supervisors. 
2. ↑ Douglas, Danielle (2 August 2013). "The rise of Promontory" (JavaScript). The Washington Post. Business (Washington, D.C.: With Bloomberg) (Financial Services). p. 2 of 4. Retrieved 9 September 2013. With 383 employees from Toronto to Tokyo, Promontory has worked on almost 1,600 projects. 
3. ↑ "Affiliated Companies". Promontory Financial Group. Retrieved 18 July 2013. 
4. ↑ "Contributors and Supporters". Group of Thirty. Retrieved 15 July 2013. 
5. ↑ "London". Promontory Financial Group. 1 April 2013. Retrieved 30 July 2013. 
6. ↑ Julia La Roche (April 2, 2013). "Former SEC Chief Mary Schapiro Is Joining 'Shadow Regulator' Promontory Financial Group". Business Insider. 
7. ↑ Promontory Financial Group (12 March 2002). "The Ludwig report: implications for corporate governance" [Report to the Boards of Allied Irish Banks, p.l.c., Allfirst Financial Inc. and Allfirst Bank Concerning Currency Trading Losses] (pdf). MCB UP Ltd. Retrieved 25 July 2013. 
8. ↑ Pierre-Yves Thoraval (15 April 2011). "Report on Iceland Supervision" [Prepared for the Icelandic Authorities, the FME and the IMF] (pdf; 9,2 MB). Banking Supervision. Promontory Financial Group. Retrieved 15 July 2013. 
9. ↑ Carol Matlack (2 July 2013). "A Money-Smuggling Scandal Threatens to Sink the Vatican Bank" [Promontory Financial Group will conduct a forensic review and screen the Vatican Bank's client relationships—which some say might be "irreformable"]. Businessweek. Retrieved 27 July 2013. 
10. ↑ "Resignations from the executive board". L'Osservatore Romano. 3 July 2013. Retrieved 30 July 2013. 
11. ↑ Protess, Ben; Senator Brown, Sherrod; Silver-Greenberg, Jessica (20 June 2013). "Senator Criticizes Lack of Supervision for Banks' Consultants - NYTimes.com". DealBook. The New York Times. Retrieved 15 July 2013. New documents suggest that the Promontory Financial Group, which examined loans for Wells Fargo, Bank of America and PNC, was the highest paid of the consultants. The firm, run by a former comptroller of the currency, Eugene Ludwig, received $927 million for reviewing more than 250,000 loan files, according to documents provided to the Senate Banking Committee and reviewed by The Times.  Cite uses deprecated parameter |coauthors= (help)
12. ↑ Protess, Ben; Silver-Greenberg, Jessica (9 April 2013). "Promontory Financial Draws Washington Scrutiny - NYTimes.com" [Former Regulators Find a Home With a Powerful Firm]. DealBook. The New York Times. Retrieved 15 July 2013.