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A Promotion Highlights Commodity Regulator’s Ties to Wall Street

Robert Schmidt and Ben Bain

(Bloomberg) -- The new head of the U.S. Commodity Futures Trading Commission has promoted the daughter of a senior executive at Wall Street’s main derivatives lobbying group, provoking concern among some agency employees that the regulator is too cozy with the financial industry.

In July, CFTC Chairman Heath Tarbert gave legislative specialist Anna Rosenberg the additional title of “special assistant to the chairman,” and touted her in a press release as a member of his “best in class” team. The 23-year-old had spent about a year working on Capitol Hill in junior positions before joining the commission in early 2019.

Yet it’s Rosenberg’s familial connection, not her brief professional career, that has made some CFTC staff members uneasy. Her mother, Bella Rozenberg, is a top regulatory attorney at the International Swaps and Derivatives Association -- a job where she regularly weighs in on CFTC policy on behalf of big banks, brokers and hedge funds. The relationship, however, is difficult for the public to discern because Anna recently began spelling her last name with an S, rather than a Z.

CFTC spokesman Michael Short said there has been no effort to conceal Anna Rosenberg’s identity, and he called any agency workers questioning her appointment “anonymous smear merchants.” Anna’s name is Rosenberg on her passport and driver’s license, and she is legally required to use that spelling as a federal employee, Short said. Still, she continues to use Rozenberg in a non-professional capacity, such as on her Twitter and Instagram accounts.

‘No Conflicts’

Short also disputed that Rosenberg’s new title and the chairman’s announcement of it in his press release constituted a promotion.

“Her primary role is with the Office of Legislative and Intergovernmental Affairs, whose function is to liaise with Congress and the executive branch,” Short said in a statement. “Her duties in the chairman’s office are minimal and constitute administrative work. This is the same arrangement that existed before Chairman Tarbert took over, and she has received no salary increase, no change in pay grade, and no change in duties or responsibilities -- no promotion.”

Short stressed that Rosenberg’s employment in the chairman’s office presented “no legal conflicts” because her primary duties involve dealing with Congress. Rosenberg, he said, “has not handled any substantive ISDA matter.” She is highly qualified and got the job on her own merit, Short added.

Rosenberg, who is paid $69,923 a year, declined to comment through Short. ISDA spokesman Nick Sawyer said the trade group “fully complies at all times with the spirit and letter of any applicable ethics restrictions and requirements.”

Tarbert, President Donald Trump’s second CFTC chairman, joined the agency in July after working at the Treasury Department.

The CFTC staff members, who asked not to be named because they fear retaliation, said in interviews that Rosenberg’s assignment makes it more likely that conflicts of interest could arise between Tarbert’s office and the leading trade association for participants in the $544 trillion swaps market. Other personnel decisions also give the impression that the agency is getting too friendly with the Wall Street firms it oversees, the employees said.

Citadel Hire

This month, for example, Tarbert brought on Dorothy DeWitt, a lawyer who previously worked at Citadel Securities and cryptocurrency firm Coinbase, to run the CFTC’s market oversight division. A member of Tarbert’s staff, Thomas Benison, spent 20 years at JPMorgan Chase & Co. Clark Hutchison, who was named head of the CFTC’s clearing and risk division, came to the agency after stints at a number of financial firms, including Deutsche Bank AG and Goldman Sachs Group Inc.

“The agency has a long history of drawing from the private sector and it takes the conflicts that can arise from employees’ backgrounds very seriously,” CFTC spokesman Short said.

Rosenberg’s appointment particularly stood out because of ISDA’s stature and deep connections throughout the derivatives industry. The trade group routinely advocates on CFTC rule proposals and every major player in the swaps market is among its 900 members, including Goldman Sachs, Credit Suisse Group AG, Morgan Stanley and JPMorgan. (A unit of Bloomberg LP, the parent company of Bloomberg News, is an associate member.)

In addition, Tarbert’s former employer, Allen & Overy, has been one of ISDA’s main outside law firms, according to the group’s public tax forms. In 2015 and 2016, while Tarbert was a partner and a leader in the global financial services regulatory practice, ISDA paid the firm $4.3 million, the documents show.

Tarbert did less than two hours of legal work for ISDA in 2014 and 2015 and has recused himself from matters involving the group even though it wasn’t required, Short said.

‘Secretary Work’

In an interview, Bella Rozenberg said she had nothing to do with getting her daughter a job at the CFTC. Rozenberg, who is not a registered lobbyist, added that Anna is recused from working on any matters involving ISDA and that her role was vetted by the agency’s ethics office.

Rozenberg also described Anna’s position as low-level. “Half the time, she does secretary work for Heath,” Rozenberg said, referring to the CFTC chairman.

On the name discrepancy, Rozenberg said there is “no conspiracy.” When her daughter was born, her last name was listed on her birth certificate with an S. But as she grew up, Anna used the Z spelling to match her mother’s name. When Anna entered the workforce after graduating from college in 2017, she began using the S to correspond with her legal documents, Rozenberg said.

Anna Rosenberg joined the CFTC in March after working as a staff assistant on the House Financial Services Committee. While former CFTC Chairman J. Christopher Giancarlo hired Rosenberg as a political appointee, Tarbert gave her the new title.

Pay Boosts

Working for the CFTC can prove to be a valuable credential. Bella Rozenberg, for example, spent more than a decade at the agency before joining ISDA’s Washington office about five years ago.

She was hired by Scott O’Malia, ISDA’s chief executive officer, a former Republican CFTC commissioner. Both got a significant pay boost: ISDA’s 2016 tax forms, the most recent available, show Rozenberg’s compensation was $505,351, while O’Malia made $1.2 million.

(Adds comment from CFTC spokesman in sixth paragraph.)

To contact the reporters on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net;Ben Bain in Washington at bbain2@bloomberg.net

To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott

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