SEC’s Schapiro Joins Promontory

Firm’s roster includes many ex-regulators.

Mary Schapiro, who led the U.S. Securities and Exchange Commission until December, joined Promontory Financial Group LLC to run its governance and markets practice.

Schapiro, 57, will advise clients on risk management and corporate governance as a managing director, Washington-based Promontory said today in a statement.

Appointed by President Barack Obama, Schapiro took over at the SEC in 2009, after the financial crisis and the collapse of Lehman Brothers Holdings Inc. and Bear Stearns & Co. on the agency’s watch. She won praise from a predecessor, Harvey Pitt, for helping to restore the agency’s credibility, while other regulators said she failed to hold banks accountable and manage policy divides among commissioners.

“At Promontory I join a team of highly experienced professionals who work with clients to meet regulatory and investor expectations while advancing the evolving norms for corporate governance and regulatory compliance,” Schapiro said in the statement. “This is important not only to companies, but also to our markets and to global prosperity.”

Schapiro, who had also run the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority, adds to the ranks of former top regulators at Promontory, which was founded by Eugene Ludwig, former head of the Office of the Comptroller of the Currency. The firm hired OCC chief counsel Julie Williams this year, and the OCC replaced her with Promontory alumna Amy Friend.

Promontory and other independent consultants, including Ernst & Young LLP and PricewaterhouseCoopers LLP, drew criticism from lawmakers after the firms were paid about $2 billion to review 2009 and 2010 foreclosures by U.S. mortgage servicers after regulators ordered the servicers to pay for an outside look. The process yielded no compensation for wronged borrowers, and regulators pushed for a settlement that mostly ended the review.

Promontory and other consulting firms will be the focus of an April 11 hearing of Senator Sherrod Brown’s subcommittee on financial institutions to examine the relationship between federal agencies and the third-party consultants.

Since Schapiro’s departure, the SEC has been run by Democrat Elisse Walter. The Senate Banking Committee voted March 19 to approve the nomination of Mary Jo White, a former prosecutor, to be a more permanent replacement as chairman.

 

Bloomberg News

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