Prosecutor McDonald Expected to Be Named CFTC Enforcement Chief, Sources Say

  • James McDonald set to fill position at derivatives regulator
  • McDonald prosecutes public corruption cases in Manhattan

A federal prosecutor from Manhattan is expected to be named as the next enforcement chief of the main U.S. derivatives regulator, according to two people familiar with the matter.

The lawyer, James McDonald, is set to be appointed to the position at the Commodity Futures Trading Commission by acting Chairman J. Christopher Giancarlo, according to the people, who asked not to be named ahead of a public announcement.

McDonald has worked as an assistant U.S. attorney for the Southern District of New York since 2014, most recently in the public corruption unit. McDonald’s last day is Thursday, according to one of the people.

Steve Adamske, a spokesman for the CFTC, declined to comment. McDonald didn’t respond to phone messages left at his office.

Expanded Jurisdiction

McDonald would run enforcement for an agency whose jurisdiction dramatically expanded with new laws passed by Congress after the 2008 financial crisis. Giancarlo, who President Donald Trump named Tuesday as his pick for CFTC chairman, said the agency needs to revamp its mission and make regulations less costly for business.

The main role of the CFTC is to police the $34 trillion U.S. futures market. After the financial crisis, which was caused in part by complex financial derivatives, the 2010 Dodd-Frank Act also gave the CFTC oversight of an even bigger market: the $400 trillion in swaps traded outside of exchanges.

Giancarlo said Wednesday at a conference in Boca Raton, Florida, that under his leadership, the CFTC will provide “aggressive and assertive enforcement action. There will be no pause, let up or reduction in our duty to enforce the law and punish wrongdoing in our derivatives markets.”

Giancarlo, who must be confirmed by the Senate to become chairman, is a former derivatives executive with more than a decade of experience.

Prior to working for the former U.S. attorney Preet Bharara, McDonald was an associate at Williams & Connolly in Washington and clerked for Supreme Court Chief Justice John Roberts. He was also a deputy associate general counsel for President George W. Bush.

“He’ll have a steep learning curve, but he’s a very smart, impressive guy,” said Aitan Goelman, the former head of CFTC enforcement, who helped interview McDonald for the position. Goelman said he hadn’t been told who Giancarlo selected.

McDonald would be the third prosecutor in recent years from the U.S. attorney’s office in Manhattan who’s been tapped for the role. Goelman and his predecessor, David Meister, both worked in that office.