SAN FRANCISCO (MarketWatch) — Timothy Massad, the senior Treasury Department official expected to be nominated to head the Commodity Futures Trading Commission, has a rare challenge as a regulator: he has a legacy to live up to.
The White House is expected to pick Massad to replace Gary Gensler, the outgoing CFTC chief. The transition is expected to come roughly at year-end pending confirmation, according to The Wall Street Journal.
Bloomberg 
Enlarge Image Timothy Massad For investors, the choice of Massad is significant. Few regulators are charged with such an enormous and challenging task as regulating a $125 trillion to $180 trillion market, not to mention one as tangled and complicated. Just consider interest-rate and credit default swaps and the derivative of derivatives: the synthetic derivative.
Under Gensler, the CFTC has been surprisingly active in trying to rein in the marketplace. Gensler is a former Goldman Sachs Group Inc. (GS) banker whose appetite for aggressive regulation was in doubt. He's surprised, time and again.
Massad also will have something to prove. The Treasury Department, especially under Timothy Geithner was often criticized for being too generous with Wall Street interests. Massad's role at the department was to oversee the Troubled Asset Relief Program, the bank bailout program.
To make his task more difficult, the CFTC is struggling with turnover. Two commissioners, not including Gensler, have either left or plan to leave. Should Massad seek to keep the CFTC proactive, he will have to build support among an untested panel of commissioners.
Like the popular Sheila Bair formerly at the Federal Deposit Insurance Corp. and Elizabeth Warren, formerly a congressional bailout watchdog and now a U.S. senator from Massachusetts, Massad can gild his reputation as an investor advocate and keeper of the financial system.
Or he can "work" with the industry. Problem is, usually those kind of regulators get worked over instead.
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