A former top regulator at the Commodities Futures Trading Commission was allowed to weigh in on controversial rules for big banks — even after he alerted ethics officers at the CFTC he was in talks for a job with a lobbying group seeking to block those same rules.
Scott O’Malia, a former Republican commissioner at the CFTC, came out against rules that would stop global banks from using their overseas subsidiaries to skirt US regulations in a July 17 speech.
That’s more than a month after he entered talks to become the CEO of the International Swaps and Derivatives Association, a lobbying group for the estimated $600 trillion derivatives industry, according to a person familiar with the talks.
O’Malia was first contacted in early June by a headhunter, who asked broadly about post-employment opportunities, according to this person.
Once the commissioner was aware that he was negotiating with the ISDA, he signed recusal forms and didn’t participate in any rule-making or enforcement actions, the person said.
The ISDA’s members include many of the world’s largest banks, asset managers, insurance companies and exchanges, and lobbies to dismantle laws and regulations passed in the wake of the 2008 financial crisis.
In December, the group, along with the Securities Industry and Financial Markets Association, sued the CFTC over the same cross-border swap rules O’Malia spoke about earlier this month.
O’Malia takes over the ISDA on Aug. 18.