Promontory Financial Group
| Company type | Subsidiary |
|---|---|
| Industry | Financial services consulting |
| Founded | 2001 |
| Founder | Eugene Ludwig, Alfred H. Moses |
| Headquarters | Washington, D.C. , United States |
Area served | Worldwide |
Key people | Julie L. Williams (co-chair operating committee), Leslie Peeler (co-chair operating committee) |
| Products | Regulatory guidance, compliance, risk management, liquidity management, corporate restructuring, mergers and acquisitions, due diligence, internal investigations, cyber security consulting |
Number of employees | Approximately 170 consultants |
| Parent | IBM |
Promontory Financial Group, operating as a fully owned subsidiary of IBM under its Consulting branch, is an international consulting firm focused on the financial services sector. The company provides expert guidance on regulatory challenges, compliance, risk management, liquidity management, corporate restructuring, mergers and acquisitions, due diligence processes, internal investigations, and cyber security matters.
Organization
Established in 2001 by Eugene Ludwig, who previously served as Comptroller of the Currency during President Bill Clinton’s administration, alongside Alfred H. Moses, a partner at the law firm Covington & Burling LLP, Promontory’s main office is located in Washington, D.C. The firm maintains a presence through 18 offices worldwide, including key cities such as Atlanta, Beijing, Brussels, Dubai, Hong Kong, London, New York City, Paris, Singapore, and Tokyo.
IBM announced its intent to acquire Promontory in September 2016 and finalized the transaction by November of the same year. On February 28, 2021, Ludwig stepped down as CEO, with leadership transitioning to an operating committee co-led by Julie L. Williams, global head of strategy, and Leslie Peeler, chief operating officer.
Promontory Financial operates alongside several affiliated entities:
- Promontory Forensics Solutions, LLC
- Promontory Growth and Innovation
- Promontory Human Capital Solutions
- Promontory Risk Review, LLC
Employees
Approximately 170 consultants at Promontory have backgrounds as former financial regulators. The firm has earned a reputation as a "shadow regulator" within Wall Street circles due to its team of ex-officials from agencies such as the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve, Securities and Exchange Commission, among others.
Prominent former government officials currently involved with Promontory include:
- Sarah Bloom Raskin, ex-Deputy Secretary of the Treasury and Federal Reserve Governor; serving as managing director and vice chair on the advisory board.
- Mary Schapiro, former chairperson of both the Securities and Exchange Commission and Commodity Futures Trading Commission; managing director and chair of governance practice.
- Julie L. Williams, former senior deputy comptroller and acting Comptroller of the Currency; co-chair of the operating committee.
- Dr Jeffrey Carmichael, founding chairperson of the Australian Prudential Regulation Authority; CEO of Promontory Financial Group Australasia.
Noteworthy previous officials associated with Promontory include:
- Elizabeth McCaul, former Superintendent of Banks for New York; previously led the New York office and served as global head of strategy.
- David Nason, ex-Assistant Secretary for Financial Institutions at the U.S. Treasury; managing director.
- Tommaso Padoa-Schioppa (1940–2010), former Italian Minister of Economy and Finances and chairman of the Basel Committee on Banking Supervision; chaired Promontory Financial Group Europe until his passing.
Engagements
In 2002, following the discovery of $691 million in foreign exchange losses at Allied Irish Bank’s U.S. subsidiary Allfirst Financial Inc., Promontory was hired to perform an internal investigation. The resulting "Ludwig Report" exposed how trader John Rusnak concealed losses over a five-year period and identified weak internal controls and audit procedures. Rusnak was dismissed from his position, with no evidence found indicating active collusion within the bank.
The firm has also provided advisory services to governments including those of the United States, Cameroon, and Iceland. Additionally, Promontory was commissioned by the Holy See to assess money laundering vulnerabilities at the Vatican bank (IOR), with former Promontory Europe leaders Elizabeth McCaul and Raffaele Cosimo heading the inquiry.
In response to the subprime mortgage crisis, U.S. federal banking regulators selected Promontory to evaluate foreclosure practices across 16 mortgage servicers such as Bank of America, PNC Financial Services, and Wells Fargo. Reviewing over 250,000 loan agreements generated fees totaling $927 million for Promontory but also drew criticism and congressional examination concerning potential conflicts of interest. The Senate Banking Committee held hearings to determine if regulators had delegated excessive oversight responsibilities to private consultants like Promontory.
Within Australia, Promontory was engaged by Commonwealth Bank in 2014 to supervise their Open Advice Review and later retained by Westpac in 2019 to conduct an independent assessment following violations of anti–money laundering regulations.
New York State enforcement action
In August 2015, Promontory reached a settlement with the New York Department of Financial Services concerning accusations related to the misrepresentation of compliance documentation for its UK banking client, Standard Chartered Bank. As part of the resolution, Promontory agreed to a $15 million fine and chose to suspend accepting new consulting assignments within New York for a duration of six months.