Promontory settles over 'whitewashed' report on Standard Chartered
Promontory has agreed to pay $15m in a settlement over claims by the New York Department of Financial Services (NY DFS) that it whitewashed a report on possible sanctions violations by Standard Chartered. The&nbsp;DFS&rsquo;s official statement said, &ldquo;Promontory agrees that, in certain instances, its actions during the Standard Chartered engagement did not meet the department&rsquo;s current requirements for consultants performing regulatory compliance work for entities supervised by the department.&rdquo;&nbsp;In 2012, Standard Chartered paid $667m and another $300m to the state last year over violations related to US sanctions on Iran and other countries.
When New York State’s financial regulator challenged the independence of a top Wall Street consultant, the Promontory Financial Group, the firm threatened to sue, vowing to “litigate the matter and defend our firm against this regulatory overreach.”

On Tuesday, Promontory tried a different approach: compromise.

Promontory — whose founder and chief executive, Eugene A. Ludwig, is a former top banking regulator and a law school friend of Bill Clinton — agreed to admit that its actions on behalf of a big British bank did not meet current consulting requirements, the New York State regulator announced.

The statement, while a sharp contrast from Promontory’s threat of litigation, was not as sweeping an acknowledgment as the New York regulator originally sought.

And in another indication of compromise, Promontory agreed voluntarily to abstain from certain consulting arrangements in New York for six months, a shorter period than once expected. The firm also agreed to pay a $15 million penalty.