WASHINGTON A U.S. Senate panel on Tuesday approved Timothy Massad as the next chairman of the Commodity Futures Trading Commission, but a second nominee to the derivatives watchdog hit a snag.
Massad, a lawyer who oversaw the U.S. government's $700 billion bank bailout program, was nominated by President Barack Obama 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.
He and two other nominees met little resistance at an earlier confirmation hearing in the Senate Agriculture Committee, which oversees the CFTC. The agency was initially an overseer of agricultural and other futures.
But, following the vote, Republican Senator David Vitter from Louisiana, who does not sit on the committee, blocked Sharon Bowen, a partner at law firm Latham & Watkins in New York, through a procedure that can delay her confirmation as a commissioner.
Bowen was also the only nominee to draw a "no" vote in the Agriculture Committee, from Republican Senator Saxby Chambliss of Georgia.
"I simply don't think (she) is qualified, and I wish in advance to be on the record as voting 'no,'" Chambliss said.
The third nominee was Chris Giancarlo, an industry veteran at swaps broker GFI in New York.
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.
Chambliss and Vitter are two of a group of 14 senators who are supporting the Securities and Exchange Commission in a legal fight against the Securities Investor Protection Corporation (SIPC), which Bowen heads.
In that capacity, she was involved in a decision to deny a payout to victims of the $7 billion Ponzi scheme perpetrated by Allen Stanford, who is now serving a 110-year prison sentence.
"That sort of leadership, and complete lack of responsiveness to Congress and the SEC, has no place at the CFTC," Vitter said in a statement.
The Stanford Victims Coalition said it had collected signatures from more than 1,000 people asking the Senate to oppose Bowen's nomination. Not all those people were victims, said Angie Kogutt, who is in charge of the group.
By putting a so-called 'hold' on Bowen, Vitter can slow down but not stop her confirmation.
Senate Democratic Leader Harry Reid will likely seek to resolve Vitter's concerns so that the hold will be lifted. If Vitter refuses, Reid could eliminate the hold and move forward on the nomination with a simple majority vote.
Senate Democrats changed the rules last November to strip Republicans of their ability to stop most presidential nominees, except those for the U.S. Supreme Court, with procedural hurdles known as filibusters. Once the three nominees have made it through the Senate, Obama can swear them in.
(Reporting by Douwe Miedema, Additional reporting by Tom Ferraro; Editing by Lisa Von Ahn and Jonathan Oatis)