Promontory Financial Group, a wholly owned subsidiary of IBM, is a global

consulting firm A consulting firm or simply consultancy is a professional service firm that provides expertise and specialised labour for a fee, through the use of consultants. Consulting firms may have one employee or thousands; they may consult in a broad range ...

that advises clients on a variety of financial services matters, including regulatory issues,

compliance Compliance can mean: Healthcare * Compliance (medicine), a patient's (or doctor's) adherence to a recommended course of treatment * Compliance (physiology), the tendency of a hollow organ to resist recoil toward its original dimensions (this is a ...

, risk management,

liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity, the ease with which an asset can be sold * Accounting liquidity, the ability to meet cash obligations when due * Liqui ...

restructuring Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons ...

acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...

due diligence Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care. It can be a l ...

, internal investigations and

cyber security Computer security, cybersecurity (cyber security), or information technology security (IT security) is the protection of computer systems and networks from attack by malicious actors that may result in unauthorized information disclosure, the ...

Organization

The company was founded in 2001 by

Eugene Ludwig Eugene A. "Gene" Ludwig (born April 11, 1946) is an American business leader and expert on banking regulation, risk management, and fiscal policy. From 1993 to 1998 he served as Comptroller of the Currency. He is the founder and former CEO and c ...

, who served as

Comptroller of the Currency The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, bank regulation in the United States ...

under President

Bill Clinton William Jefferson Clinton ( né Blythe III; born August 19, 1946) is an American politician who served as the 42nd president of the United States from 1993 to 2001. He previously served as governor of Arkansas from 1979 to 1981 and agai ...

, and

Alfred H. Moses Alfred H. Moses (born July 24, 1929) is an American attorney and diplomat who served as the U.S. Ambassador to Romania from 1994 to 1997. Biography Moses was born and raised in Baltimore, Maryland. After graduating from Baltimore City College ...

, a partner in the law firm

Covington & Burling Covington & Burling LLP is an American multinational law firm. Headquartered in Washington, D.C., the firm advises clients on transactional, litigation, regulatory, and public policy matters. In 2021, Vault.com ranked Covington & Burling as th ...

LLP A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not ...

. Promontory is based in Washington, D.C. and has 18 additional offices and affiliates worldwide, in

Atlanta Atlanta ( ) is the capital and most populous city of the U.S. state of Georgia. It is the seat of Fulton County, the most populous county in Georgia, but its territory falls in both Fulton and DeKalb counties. With a population of 498,715 ...

Beijing } Beijing ( ; ; ), alternatively romanized as Peking ( ), is the capital of the People's Republic of China. It is the center of power and development of the country. Beijing is the world's most populous national capital city, with over 21 ...

Brussels Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...

Denver Denver () is a consolidated city and county, the capital, and most populous city of the U.S. state of Colorado. Its population was 715,522 at the 2020 census, a 19.22% increase since 2010. It is the 19th-most populous city in the Unit ...

Dubai Dubai (, ; ar, دبي, translit=Dubayy, , ) is the most populous city in the United Arab Emirates (UAE) and the capital of the Emirate of Dubai, the most populated of the 7 emirates of the United Arab Emirates.The Government and Politics of ...

Dublin Dublin (; , or ) is the capital and largest city of Republic of Ireland, Ireland. On a bay at the mouth of the River Liffey, it is in the Provinces of Ireland, province of Leinster, bordered on the south by the Dublin Mountains, a part of th ...

Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...

Istanbul Istanbul ( , ; tr, İstanbul ), formerly known as Constantinople ( grc-gre, Κωνσταντινούπολις; la, Constantinopolis), is the List of largest cities and towns in Turkey, largest city in Turkey, serving as the country's economic, ...

London London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...

Madrid Madrid ( , ) is the capital and most populous city of Spain. The city has almost 3.4 million inhabitants and a metropolitan area population of approximately 6.7 million. It is the second-largest city in the European Union (EU), and ...

Milan Milan ( , , Lombard: ; it, Milano ) is a city in northern Italy, capital of Lombardy, and the second-most populous city proper in Italy after Rome. The city proper has a population of about 1.4 million, while its metropolitan city h ...

New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...

Paris Paris () is the capital and most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), making it the 30th most densely populated city in the world in 2020. S ...

San Francisco San Francisco (; Spanish language, Spanish for "Francis of Assisi, Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the List of Ca ...

Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...

Sydney Sydney ( ) is the capital city of the state of New South Wales, and the most populous city in both Australia and Oceania. Located on Australia's east coast, the metropolis surrounds Sydney Harbour and extends about towards the Blue Mountain ...

Tokyo Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, with an estimated 37.468 ...

, and

Toronto Toronto ( ; or ) is the capital city of the Canadian province of Ontario. With a recorded population of 2,794,356 in 2021, it is the most populous city in Canada and the fourth most populous city in North America. The city is the ancho ...

. IBM announced its planned acquisition of Promontory in September 2016 and completed the transaction in November 2016. Ludwig retired as CEO on February 28, 2021, passing the reins to an operating committee co-chaired by Julie L. Williams, Promontory's global head of strategy, and Leslie Peeler, chief operating officer. Promontory Financial is affiliated with several similarly named companies: * Promontory Forensics Solutions, LLC * Promontory Growth and Innovation * Promontory Human Capital Solutions * Promontory Risk Review, LLC

Employees

Approximately 170 of the consultants working for Promontory were former employees of authorities in financial supervision. The news media has sometimes referred to Promontory as a "shadow regulator" for

Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...

. The ''American Banker'' newspaper described Promontory under Ludwig's leadership as "a go-to for banks seeking insight on regulatory matters from a stable of former officials from the Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., Federal Reserve, Securities and Exchange Commission and other agencies."“Eugene Ludwig to step down as Promontory CEO,” American Banker, February 17, 2021 Former government officials currently associated with Promontory include: *

Sarah Bloom Raskin Sarah Bloom Raskin (born April 15, 1961) is an American attorney and regulator who served as the 13th United States Deputy Secretary of the Treasury from 2014 to 2017. A member of the Democratic Party, Bloom Raskin previously served as a member ...

. Former

United States Deputy Secretary of the Treasury The United States Deputy Secretary of the Treasury, in the United States government, advises and assists the Secretary of the Treasury in the supervision and direction of the Department of the Treasury and its activities, and succeeds the Secret ...

, former member of the Federal Reserve Governor, and former Maryland Commissioner of Financial Regulation. Served as managing director of Promontory Financial Group, Washington. Currently a Promontory Advisory Board vice chair. *

Mary Schapiro Mary Lovelace Schapiro (born June 19, 1955) served as the 29th Chair of the U.S. Securities and Exchange Commission (SEC). She was appointed by President Barack Obama, unanimously confirmed by the U.S. Senate, and assumed the Chairship on January ...

. Former chair of the

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

and former chair of the

Commodity Futures Trading Commission The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974 that regulates the U.S. derivatives markets, which includes futures, swaps, and certain kinds of options. The Commodity Exchange Ac ...

. Joined Promontory in April 2013 as managing director and chair of its governance and markets practice. Currently a Promontory Advisory Board vice chair. * Julie L. Williams. Former first senior deputy comptroller and chief counsel and two-time former acting

. Current co-chair of the firm's operating committee. * Dr Jeffrey Carmichael. Former founding chair of the

Australian Prudential Regulation Authority The Australian Prudential Regulation Authority (APRA) is a statutory authority of the Australian Government and the prudential regulator of the Australian financial services industry. APRA was established on 1 July 1998 in response to the recomm ...

following 20 years with the

Reserve Bank of Australia The Reserve Bank of Australia (RBA) is Australia's central bank and banknote issuing authority. It has had this role since 14 January 1960, when the ''Reserve Bank Act 1959'' removed the central banking functions from the Commonwealth Bank. T ...

. Dr. Carmichael is Chief Executive Officer of Promontory Financial Group Australasia (PFGA). Former government officials previously associated with Promontory include: *

Elizabeth McCaul Elizabeth McCaul is a member of the Supervisory Board of the European Central Bank. McCaul previously served as Superintendent of Banks for the State of New York, the head of the New York State Banking Department and held several senior executive p ...

. Former New York Superintendent of Banks. Former head of New York office of Promontory, global head of strategy, and interim chair of Promontory Financial Group Europe. * David Nason. Former Assistant Secretary for Financial Institutions, U.S. Treasury. Served as managing director of Promontory Financial Group, Washington. *

Tommaso Padoa-Schioppa Tommaso Padoa-Schioppa, OMRI (; 23 July 1940 – 18 December 2010) was an Italian banker and economist who served as Italy's Minister of Economy and Finance from 2006 to 2008. He previously served as a member of the Executive Board of the Europe ...

(1940-2010). Former

Italian Minister of Economy and Finances The Italian Minister of Economy and Finance ( it, Ministro dell'Economia e delle Finanze) is a senior member of the Italian Cabinet who leads the Ministry of Economy and Finance since its creation in 2001 by the fusion of three former ministri ...

and former chairman of the

Basel Committee on Banking Supervision The Basel Committee on Banking Supervision (BCBS) is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten (G10) countries in 1974. The committee expanded its membership in 2009 a ...

. Served as chairman of Promontory Financial Group Europe until his death.

Engagements

After uncovering foreign exchange losses in its U.S. banking subsidiary, Allfirst Financial Inc.,

Allied Irish Bank Allied Irish Banks, p.l.c. is one of the so-called Big Four commercial banks in Ireland. AIB offers a full range of personal, business and corporate banking services. The bank also offers a range of general insurance products such as home, trav ...

in 2002 engaged Promontory to conduct an internal investigation. Promontory issued the "Ludwig Report", on March 14, 2002. The report detailed how the trader

John Rusnak John Rusnak is a former currency trader at Allfirst bank, then part of AIB Group, in Baltimore, Maryland, United States. On January 17, 2003 he was sentenced to years in prison for hiding US$691 million in losses at the bank in 2002, after bad b ...

hid losses of $691 million over five years. The report concluded that Rusnak, who was fired for his role in the trading losses, received no active help from within or outside the bank. Promontory found that the internal control mechanisms and audits had been insufficient. Promontory advised further the government of the United States and from other countries like

Cameroon Cameroon (; french: Cameroun, ff, Kamerun), officially the Republic of Cameroon (french: République du Cameroun, links=no), is a country in west-central Africa. It is bordered by Nigeria to the west and north; Chad to the northeast; the C ...

and

Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its s ...

. Promontory was hired to carry out by order of the

Holy See The Holy See ( lat, Sancta Sedes, ; it, Santa Sede ), also called the See of Rome, Petrine See or Apostolic See, is the jurisdiction of the Pope in his role as the bishop of Rome. It includes the apostolic episcopal see of the Diocese of Rome ...

a comprehensive investigation of all customer contacts of the

Institute for the Works of Religion The Institute for the Works of Religion ( it, Istituto per le Opere di Religione; la, Institutum pro Operibus Religionis; abbreviated IOR), commonly known as the Vatican Bank, is a financial institution situated inside Vatican City and run by a ...

( it, Istituto per le Opere di Religione – ''IOR''), often also called the Vatican bank, on

money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...

guided by former Promontory Europe executives Elizabeth McCaul and Raffaele Cosimo. In the aftermath of the

subprime mortgage crisis The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the Financial crisis of 2007–2008, 2007–2008 global financial crisis. It was triggered by a large decline ...

, Promontory was one of several consulting firms selected by federal banking regulators to conduct reviews of loan foreclosures initiated by 16 mortgage servicing companies. Promontory reviewed the foreclosure activities of

Bank of America The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank w ...

PNC Financial Services The PNC Financial Services Group, Inc. (stylized as PNC) is an American bank holding company and financial services corporation based in Pittsburgh, Pennsylvania. Its banking subsidiary, PNC Bank, operates in 27 U.S. state, states and the D ...

and

Wells Fargo Wells Fargo & Company is an American multinational financial services company with corporate headquarters in San Francisco, California; operational headquarters in Manhattan; and managerial offices throughout the United States and intern ...

, encompassing more than 250,000 loan contracts. Promontory was paid $927 million, which led to strong criticism and doubt about the independence of the examination. A hearing was arranged by the U.S. Senate Banking Committee to assess whether regulators had handed off too much oversight authority to private consulting firms such as Promontory. Promontory was also engaged by

Commonwealth Bank The Commonwealth Bank of Australia (CBA), or CommBank, is an Australian multinational bank with businesses across New Zealand, Asia, the United States and the United Kingdom. It provides a variety of financial services including retail, busines ...

to oversee their Open Advice Review in 2014 and by

Westpac Westpac Banking Corporation, known simply as Westpac, is an Australian multinational banking and financial services company headquartered at Westpac Place in Sydney, New South Wales. Established in 1817 as the Bank of New South Wales, it ...

to undertake an independent review into their breach of anti money laundering laws in 2019.

New York State enforcement action

In August 2015, Promontory entered into an agreement with the New York Department of Financial Services to resolve the state's allegations that it had watered down compliance reports for a UK banking client,

Standard Chartered Bank Standard Chartered plc is a multinational bank with operations in consumer, corporate and institutional banking, and treasury services. Despite being headquartered in the United Kingdom, it does not conduct retail banking in the UK, and around ...

. Promontory agreed to pay a $15 million penalty and voluntarily abstained for six months from accepting new consulting engagements in New York.

References

{{Portal, Business and economics Financial services companies established in 2001 Financial services companies of the United States Strategy consulting firms of the United States Information technology consulting firms of the United States International information technology consulting firms Consulting firms established in 2001 Financial services companies based in Washington, D.C. * IBM acquisitions IBM subsidiaries 2016 mergers and acquisitions