Monitors for Misbehaving Banks Reap Lucrative Rewards


The use of so-called outside monitors to police financial institutions that have misbehaved has exploded in recent years, as authorities increasingly insist on them as a condition for not pursuing criminal or civil charges against companies, reports the Wall Street Journal. About a dozen financial institutions, including HSBC, Credit Suisse and Standard Chartered, operate under such monitors. Their use has shot up over the last five years, creating a lucrative cottage industry made up of former prosecutors and small consulting firms. Top monitors charge rates of up to $1,200 an hour.

Banks and other companies frequently grumble about excessive prying by monitors, and about the seven or eight-figure bills they run up. Monitors typically are chosen by law-enforcement officials in a private selection process, often with the input of the company in trouble. Little is publicly disclosed about what specifically they are supposed to accomplish, what they discover in their examinations or how much they collect for their work. Some argue that the process should be opened to public scrutiny.

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