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former corporate attorney and senior Treasury Department
official, Tarbert was nominated by President Donald Trump to be
both chair and one of five commissioners at the Commodity
Futures Trading Commission (CFTC), taking office in July 2019.
Commissioners are political appointees, with a maximum of three
from the same party allowed at any time. The chair serves at the
president's discretion, but commissioners are independent.
Tarbert, a Republican, said he wants to return to the private
sector. While he will resign as chair, he expects to stay on as
a commissioner after Biden takes office on Jan. 20 while he
finalizes his plans.
"It's important to have a smooth handover and a smooth
transition," said Tarbert. "It's obviously been a tremendous
adventure and - I think - successful time in government ... but
I would like to return to the private sector in some relevant
leadership role," he said.
Tarbert, 44, did not speculate on his replacement. Washington
analysts say Democratic commissioners Rostin Behnam and Dan
Berkovitz are the front-runners, and would likely take a tougher
stance on the industry.
During his tenure at the CFTC, which began policing the
over-the-counter derivatives or "swaps" market after it nearly
toppled the financial system in 2008, Tarbert has led an
unusually active rule-making agenda, said lawyers.
The agency has finalized 40 rules and proposed 21 more,
according to data provided by the agency, while juggling
practical and regulatory challenges created by the COVID-19
pandemic.
Several of the completed rules stemmed from the 2008 financial
crisis, including big, contentious changes such as limits on
speculative physical commodities positions and capital
requirements for non-bank swap dealers.
Some have been criticized by consumer advocates and Democrats
for being too weak, while lawyers say others were rushed,
resulting in problematic holes and snags.
"There's always a tension between getting stuff done, getting it
done in a timely fashion, and getting it absolutely perfect,"
said Tarbert.
Generally speaking, however, Tarbert has avoided the partisan
scrapping and pro-industry accusations that have dogged other
Trump regulators, with 87% of his votes passing on a bipartisan
basis, according to agency data.
"He did everything he could to bring consensus to the agency,
but sometimes it's impossible," said Sheila Bair, the former
chair of the Federal Deposit Insurance Corporation who has
worked closely with Tarbert.
Tarbert's enforcement record has also surprised lawyers. In
2020, the agency imposed $1.33 billion in penalties, the third
year-on-year increase, with a record 113 actions.
Notable cases include a landmark $920 million market
manipulation settlement with JPMorgan Chase & Co , and a $95.7
million settlement with Houston-based Vitol Inc, the CFTC's
first corruption-based fraud case. [L1N2IJ2B1] [L4N2GQ3S0]
"I think that busts the myth that Republicans are soft on Wall
Street," said Tarbert. Institutions should be treated "like
adults" with reasonable regulation and supervision, he said.
"There is no flexibility when people wantonly break the rules."
(Reporting by Michelle Price; Editing by Tom Brown)
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