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Strategic Transactions and Regulatory Applications
When financial institutions embark on strategic initiatives, regulatory considerations loom large. Mergers, acquisitions, new charters, conversions, reorganizations, and major shifts in strategic direction must all pass through varying degrees of regulatory scrutiny. This scrutiny increasingly goes beyond legal compliance to a deep examination of financial and operational risk, management capacity, and business wisdom.
Promontory helps banks and other financial institutions anticipate and respond to such regulatory challenges and bring strategic initiatives to a successful conclusion. Our work in this area falls into three main categories:
- A financial services company engaged Promontory to analyze securities compliance and regulatory implications of restructuring alternatives. Promontory assessed the costs of designing and implementing a securities compliance program consistent with regulatory requirements and emergent regulatory expectations. We also developed a procedure to ensure that all employees conducting securities-related activities were properly licensed and supervised.
- When a financial institution was ordered by the Federal Reserve to obtain an independent review of its liquidity and contingency plan, Promontory got the call. We assisted the client in developing multiple liquidity scenarios and in presenting the resultant contingency plans to the Federal Reserve, Federal Deposit Insurance Corporation, and state regulators.
- A large US bank needed assistance in structuring and constructing its independent risk control validation group. Promontory reviewed and provided recommendations on documents relating to the group’s mission, structure, and proposed operations. We also advised the bank on regulatory and other issues related to the group’s structure and operation. Our experts made recommendations for improvement based upon industry best practices and regulatory guidance.
- A large bank announced that it was compelled to restate its financial statements for the preceding five years due to accounting issues related to certain mortgage loan sales. The bank appointed Promontory as an independent consultant to review its mortgage loan portfolio, particularly regarding carrying value and loan documentation support. Promontory reported findings to the bank and to its regulators.
- Promontory assisted a private equity firm with its effort to establish or acquire an industrial bank. We assisted our client with the requisite applications for regulatory approval of the transaction, including assisting with the required business plan and financial projections. Promontory also advised the client on the appropriate structure for the transaction and on regulatory relations.