Senate panel approves Massad, others to head CFTC

Reuters News
Posted: Apr 08, 2014 12:54 PM

WASHINGTON (Reuters) - A Senate panel on Tuesday approved Timothy Massad as the next chairman of the Commodity Futures Trading Commission and two other commissioners to head the swaps and futures markets watchdog.

The three nominees met little resistance at an earlier confirmation hearing in the Senate Agriculture Committee, which oversees the CFTC, an agency that began as an overseer of agricultural and other futures.

Massad, a lawyer who oversaw the U.S. government's $700 billion bank bailout program, was nominated to replace Gary Gensler. He has spent most of his career at Wall Street law firm Cravath, Swaine & Moore, working on a wide variety of corporate transaction.

The only nominee to draw a "no" vote, from Senator Saxby Chambliss of Georgia, was Sharon Bowen, a partner at law firm Latham & Watkins in New York.

"I simply don't think is qualified, and I wish in advance to be on the record as voting 'no,'" said Chambliss, a Republican. There were no other "no" votes against the candidates.

The third nominee was Chris Giancarlo, an industry veteran at swaps broker GFI in New York.

The full Senate must confirm the nominees before President Barack Obama can swear them in.

Chambliss's objection is thought to be due to Bowen's role in a decision to deny a payout to victims of the $7 billion Ponzi scheme perpetrated by Allen Stanford, for which he is serving a 110-year prison sentence.

Bowen heads the Securities Investor Protection Corporation (SIPC), which is embroiled in a legal battle with the Securities and Exchange Commission over SIPC's decision not to pay out to people who had lost money in the scandal.

Chambliss has publicly supported the SEC in its fight against SIPC, and the issue might still come to haunt Bowen once the nominations go to the Senate floor.

Senator David Vitter, a Louisiana Republican and not a member of the panel, also questioned Bowen over the decision in a letter last month.

The CFTC is renewing its top rank after the 2010 Dodd-Frank law to clean up Wall Street gave it broad new powers to regulate the trading activities of the biggest banks.

Under Massad, it will have to prove it can enforce the trading limits, deal with a deluge of new regulatory data, and work smoothly with international regulators with whom it is jointly overseeing the global $690 trillion swaps market.

(Corrects name of senator to Chambliss Instead of Cochran throughout and name of law firm to "Cravath, Swaine ..." instead of "Cravat, Swaine ..." in third paragraph.)

(Reporting by Douwe Miedema; Editing by Lisa Von Ahn and Jonathan Oatis)