The swaps cops are back on the beat in full force.
After a six-month wait, the U.S. Senate yesterday confirmed Timothy Massad to serve as chairman of the Commodity Futures Trading Commission as lawmakers moved to bring the derivatives regulator to a full roster by signing off on two additional nominees.
The Senate approved Massad and J. Christopher Giancarlo, an executive at inter-dealer broker GFI Group Inc., in a series of voice votes. Sharon Y. Bowen, a lawyer at Latham & Watkins LLP, was confirmed as a commissioner in a 48-46 vote amid opposition from Republicans and a handful of Democrats.
The three new members will join a panel working to finish a job, now in its sixth year, of bringing oversight to swaps blamed for igniting the 2008 financial crisis. Started as an overseer of agricultural and commodity trading, the CFTC was empowered by the 2010 Dodd-Frank Act to bring a broad new set of rules to swaps that were previously largely unregulated.
“The Dodd-Frank Act greatly expanded the scope of the CFTC’s authority, and there are still many important issues that need to be addressed in the implementation of that law,” Walt Lukken, president and chief executive of FIA, previously known as the Futures Industry Association, said in a statement. “So it is all the more important that the CFTC have a full complement of commissioners at this critical moment in its history.”
The law, and regulations put in place under previous chairman Gary Gensler, gave the CFTC new authority over trading by Goldman Sachs Group Inc., JPMorgan Chase & Co., Deutsche Bank AG and other firms.
The new members will join current commissioners Mark P. Wetjen, who has been serving as acting chairman since January, and Scott O’Malia, a Republican who has been at the agency since October 2009.
“I look forward to working with these three new commissioners. I’m sure they are eager to get to work on the pressing issues before the commission,” O’Malia said yesterday.
The three new members of the CFTC will take office as Wall Street is pressing for rollbacks of rules approved under Gensler, saying some are unworkable. Budget constraints threaten the CFTC’s ability to oversee markets and have led to a restive staff taking steps to join a labor union.
Massad, 57, attended Harvard Law School and spent 25 years at the Cravath, Swaine & Moore LLP law firm, where he focused on corporate finance including securities, banking and derivatives. He was tapped by the U.S. Treasury Department in 2010 to administer the Troubled Asset Relief Program that rescued Wall Street banks after the financial crisis.