CFTC Commissioner Scott O’Malia surprised market participants yesterday by announcing his resignation from the derivatives regulator yesterday.
CFTC’s Commissioner resignation would be effective August 8
In a letter to President Barack Obama, O’Malia, who had been at odds with the agency on some of its SWAPs regulations, said his resignation would be effective August 8. “Althought I did not support all 63 rules that the Commission has implemented under Dodd-Frank,” O’Malia wrote in a letter to Obama, “I am pleased to have contributed to the policy deliberations to improve Commission rule-makings and encouraged the Commission to be mindful of negative policy outcomes.”
Although he was a Republican, O’Malia was generally respected for his independent deliberative approach to issues and was known as someone who wouldn’t automatically cave in to the demands of large banks, which have tremendous sway in both regulatory and legal proceedings in the financial services industry.
Chilton respects O’Malia
Although O’Malia and former CFTC Commissioner Bart Chilton, a Democratic who was often vocal on issues of financial reform, may not have seen eye to eye on every issue, Chilton nonetheless had respect for a man who was always willing to listen to multiple sides of an argument.
“Scott has always been the type of reasonable type of person you’d want to work with, even when we disagreed,” Chilton said in a statement to ValueWalk. “I’m sure he’ll be great at whatever he does next and I wish him nothing but the best.”
O’Malia, 46, said in the letter he left to “pursue other opportunities” but did not elaborate. O’Malia has a background working in the US Senate Energy and National Resources Committee under Chairman Pete Domenici (R-N.M.), as Senior Policy Advisor on oil, coal and gas issues.
CFTC is yet to formally decide to bring MF Global senior officials to trial
O’Malia, the longest active serving commissioner appointed in 2009, leaves the CFTC with a number of commissioners inexperienced in the inner workings of the agency and who have not witnessed some of the historic fights over Dodd-Frank reform and the MF Global spectacle. The CFTC is yet to formally decide if it will bring MF Global senior officials to trial, including its former CEO, Jon Corzine, long considered among the most politically powerful Wall Street executives.
Sources not associated with the CFTC have indicated that the current commission, led by Timothy Massad, favors settling its historic case with Corzine, a move being supported by the financial services lobby and large banking interests. CFTC investigators were said to have made a solid case against Corzine, but officially the CFTC has yet to rule on the issue.
When asked to comment on his reason for leaving the CFTC, O’Malia did not respond by press time. He is known as a supporter of aggressive justice in the case of MF Global.