Specialist Evan Solomon works at his post on the floor of the New York Stock Exchange Friday, Oct. 8, 2010. A bubble fueled for years by easy credit and soaring real estate values stopped expanding on Oct. 9, 2007. That day, the Standard and Poor's 500 hit 1,565. Within a month, it had fallen more than 7 percent as traders began questioning subprime loans. (AP Photo/Richard Drew)
A government regulator tasked with implementing the new Wall Street reforms has met with special interest groups almost 200 times since President Barack Obama signed the reforms into law last summer, according to an analysis by the Sunlight Foundation, a group that works for greater government transparency.
The Commodity Futures Trading Commission had 192 meetings or talks with outside groups from July 26 to Oct. 5. Most of the groups will be affected by new rules regulating over-the-counter derivatives trading, according to the foundation’s analysis. The CFTC did not respond to requests for comment.
And the financial services industry didn’t waste much time before reaching out to the CFTC. The bill was signed on a Wednesday, and by Monday afternoon, IntercontinentalExchange Chief Executive Jeff Sprecher was on the phone with CFTC Chairman Gary Gensler, according to the records.
Morgan Stanley and Goldman Sachs were the two most frequent CFTC visitors. Officials from both institutions met 16 times each with regulators, according to the Sunlight Foundation.
“Among all bank holding companies, Goldman Sachs is the most dependent upon trading for revenue, with estimates that $11.3 billion to $15.8 billion of their 2009 revenue — $45.2 billion — came from derivatives trading alone. Goldman’s representatives were often accompanied by Peter Malyshev, a former CFTC staffer-turned-lobbyist,” wrote Paul Blumenthal, author of the Sunlight report.
In an interview, Blumenthal said the data illustrate “a lack of diversity” in the meetings.
“The majority of people who attend these meetings tend to be from the financial industry as opposed to consumers,” he said.
Blumenthal said the meeting disclosures by the CFTC are a model that should be taken up by Congress and the executive branch. For instance, the public should know with whom lawmakers on powerful committees meet when they are writing legislation.
“Citizens are incredibly distrustful of government at all levels, and the more this kind of information can get publicized, the more likely they are to have a better understanding of what is actually going on,” he said.
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