Meet Mary Schapiro's New "Revolving Door" Employer
When Mary Schapiro quit the laughing stock US stock market regulator, the only question was which Wall Street firm the latest SEC "revolving door" migrant would end up with, with most bets being on, naturally, Goldman and JPM. Today, to some surprise, the news hit that the former head of the internet porn-addicted regulator (which like clockwork always complains about its low budget: maybe get a refund for that bangbus.com subscription?) has decided to join none other than the revolving door extraordinaire consulting firm Promontory Financial. Per the WSJ: "Ms. Schapiro will work full-time in Promontory's office in Washington as a managing director leading the consulting firm's governance and markets practice and advising clients on risk management and compliance. Ms. Schapiro and a Promontory spokesman declined to say how much she will be paid in the new job." And by clients the WSJ of course means the HFT lobby and various GETCO vacuum tubes.
So who is Promontory? Nothing short of an "expert network" of all former government workers who having moved on, are willing to spill the beans about all the secrets of government operations... for a fee of between $1000 and $10,000 per hour. The chart below shows a sampling of all current and former employees of Promontory, explaining why it is a perfect fit for anyone intent on justifying the allegations of those who claim all the SEC does is provide a revolving door opportunity for ex-government workers.
More from American Banker:
In 2001, Eugene Ludwig opened a consulting business with little more than a secretary and a thick rolodex of contacts from his days as a top banking regulator. An astute, driven college friend of Bill Clinton's, Ludwig had presided over a momentous five years for banking as comptroller of the currency. Even as he prodded banks to embrace fair lending and modernize their risk management, he championed their push into securities markets and used preemption to pry state regulators off the OCC's turf.
At the heart of his new firm's business model was the prescient premise that as banks diversified into new states and markets they would be concentrating their exposure to Washington's oversight. Navigating regulations-and the aims of the people who made them-would become as vital to modern banking as managing credit risk.
"I think it is insane not to follow those rules with vigor," Ludwig says. "First, more than on balance they're designed to make the system and institutions better and safer. Second, they're the law."
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.
For those who view regulators and the industry as generally reasonable and well intentioned, that work might be viewed as a blessing. But the expertise and impressive connections that shaped Promontory's success are now threatening its reputation, and potentially its future business.
Ludwig is quick to argue that Promontory's influence and its deployment of well-connected staff members extends only in one direction.
"We don't lobby-it's not our business. We do the opposite of influencing government. We try to influence the private sector in terms of what the government wants it to do," he says. (Ludwig did register as a lobbyist for Countrywide after being hired to advise the mortgage giant on its dwindling options in late 2007, though there's no record he performed any advocacy work.)
Read the full article here.