This consulting firm hires powerful government workers and sells their secret knowledge back to Wall Street


revolving door

Wikimedia Commons

Revolving doors.

In the wake of the financial crisis, the banks and hedge funds of Wall Street were hit with a slew of new regulations.


If a bank or a fund broke any of the new rules, disaster could result.

Just months after Deutche Bank failed the Fed and Treasury department's "stress test" earlier this year, both of its co-CEOs were suddenly out of a job.

At the same time, regulations can cause banks to enter and exit whole business lines just to avoid fines and other penalties.

This new reality has made the industry desperate to know what exactly the regulators were thinking when they made the rules.


A little-known consulting firm has figured out an ingenius way to capitalize on this thirst for knowledge.

It's Promontory Financial Group. It's one of the industry's biggest poachers of Washington regulators.

Promontory Financial Group was founded a little more than a decade ago by the ex-head of the Treasury Department's Office of the Comptroller of the Currency. In the time since, the firm has added some serious clout to a staff that has grown to hundreds.

Promontory has also attracted the attention of regulators. In 2013, the New York Department of Financial Services subpoenaed Promontory and other firms as part of a probe into potential conflicts of interest among consultants that serve banking sector clients. That investigation is still ongoing.

Promontory has stacked its deck with not just prominent members of the US regulatory system but international central bank executives as well. Here are the most recognizable boldface names:

  • Mary Schapiro is the former chair of the Securities and Exchange Commission; she stepped down in 2012.
  • Arthur Levitt is another former head of the SEC that would later took up a post with Promontory.
  • Promontory also looks for top central bankers internationally. The firm hired Masaaki Shirakawa, who served as governor of the Bank of Japan until 2013.
  • Sir Callum McCarthy is the former chair of the Financial Services Authority in the UK. He also served on the court of the Bank of England from 2003 until 2008.
  • Charles McDonough spent decades working for the World Bank before he joined Promontory to serve as the firm's CFO.
  • Promontory managing director Stephen Hoffman may not be a household name. However, Hoffman spent decades working at the Federal Reserve. Perhaps more valuable for the consulting firm's clients, he spent years working under Janet Yellen. And that level of expertise could come in handy for the firm's clients who have big bets based on US monetary policy.
  • Some boldface names on Promontory's roster are a surprise. For example, there's Paul Tagliabue. While Tagliabue's policy chops are unknown, he did serve as the second commissioner of the National Football League for nearly a quarter century.
  • Going through the "revolving door" between Washington and Wall Street doesn't preclude someone from going back to the other side. Sarah Bloom Raskin has taken jobs at the Federal Reserve, and more recently at the Treasury Department after having worked at Promontory.

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