President-elect Obama Thursday selected Gary Gensler, former undersecretary of the Treasury and partner at Goldman Sachs, as his nominee for chairman of the Commodity Futures Trading Commission (CFTC).

“Obama has made an outstanding choice in Gary Gensler. Gary has the rare combination of intelligence, market and government experience and independence that will help lead this agency in its vigorous oversight of the futures markets going forward,” said acting CFTC Chairman Walter Lukken. He added that he would work with Gensler to “facilitate a seamless transition at the agency.”

In announcing his choice for the CFTC, as well as the Securities and Exchange Commission and Federal Reserve Board, Obama said, “We are going to have to greatly strengthen our regulatory apparatus.” He noted that his team “will be releasing a very detailed plan on how we think that regulatory upgrade will take place” to reflect a “21st century regulatory framework.”

Obama acknowledged that regulators have been “asleep at the switch,” as have member of Congress.

The choice of an outsider for CFTC chairman came as something of a surprise. Current CFTC Commissioner Bart Chilton was believed to be next in line for chairman (see Daily GPI, Dec. 9).

Gensler was Treasury undersecretary for domestic finance during the last couple of years (1999-2001) of the Clinton administration, and prior to that spent nearly two decades at Goldman Sachs, where he made partner at the age of 30.

He also worked on Capitol Hill. He was a senior advisor to Sen. Paul Sarbanes (D-MD), a co-author of the Sarbanes-Oxley Act of 2002, which introduced major changes to the regulation of financial practice and corporate governance. Sarbanes left the Senate in 2006.

Ironically, Gensler was a senior advisor to the campaign of Sen. Hillary Rodham Clinton (D-NY), who unsuccessfully challenged Obama for the Democratic presidential nomination. Obama has picked Clinton as his nominee for secretary of state.

Gensler, a widower, has three daughters and lives in Baltimore.

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