Chilton's support for 'little guy,' opposition to silver manipulation, noted by FT

Section:

Bart Chilton, former CFTC commissioner, 1960-2019

Flamboyant, folksy image signaled his identification with the 'little man'

By Philip Stafford
Financial Times, London
Monday, April 29, 2019

Bart Chilton, one of the most distinctive and controversial figures in financial-market regulation, has died at the age of 58.

Easily recognised with his shoulder-length white-blond hair, loud enthusiasm, folksy comments and cowboy boots, Chilton was a singular character as a commissioner at the US Commodity Futures Trading Commission.

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The television channel RT America, for which he hosted its main financial show, "Boom Bust," announced Chilton’s death on Saturday evening, saying it followed a sudden illness.

Walt Lukken, chief executive of the Futures Industry Association and also a former CFTC commissioner, compared him to a big-haired 1980s rock star, "always colourful, always funny and always passionate ... the David Lee Roth of the CFTC."

A Democrat, Chilton regularly appeared on TV and at industry conferences as a critic of high-frequency traders, calling them "cheetahs." Although he privately said his flamboyant image in the largely grey world of regulation was partly for show, it also signalled his identification with what he saw as his key constituents: America’s farmers and ranchers. They, he said, were disadvantaged in Washington’s policymaking machinations. Powerful and rich interests would try to roll policies back over time, he argued.

Chilton said being the "little man" was a key part of his life, firstly as a worker in a steel mill in Indiana after college and then as a long-serving government official in the agriculture industry. He was also chief of staff at the US National Farmers Union, which represents family farmers and rural communities, from 2006-07.

He was appointed as a commissioner in 2007 by President George W Bush, as technology was beginning to revolutionise trading and the global financial-market meltdown was beginning to simmer.

From 2010, the CFTC, which had previously been a sleepy backwater agency, took on new powers to oversee the US derivatives market, which had been blamed for exacerbating the crisis.

The era of rapid change was further underscored by the flash crash of May 2010, in which US stocks abruptly dived. Although an official government report blamed the poor execution of a trade from Kansas, many of America’s retail investors pointed the finger at high-frequency traders, which dart in and out of bets and execute deals in milliseconds.

From his position, Chilton vividly spoke out against such activity, labelling those market participants as "cyber cowboys" and "high rollers", and calling out a rampant "Ponzimonium" in financial markets.

His speeches were often peppered with jokes and popular cultural references, from sources such as Lincoln, Shaft and direct-to-DVD Steven Seagal films, but within them were calls for curbs to the size of positions investors could hold in the commodities and metals markets.

He spoke out on behalf of the investors who lost out in the failure of MF Global, the broker-dealer, and schemes of Bernard Madoff. He also tried -- unsuccessfully -- to prove manipulation in the silver futures market.

Scott O’Malia, a Republican commissioner who served with Chilton at the agency, said Chilton focused intently on the retail aspects of the trade. "He cared passionately for the little guy his entire career in public service," Mr. O’Malia said.

On leaving the CFTC in 2014, he took a role at DLA Piper, the US law firm, as a senior regulatory adviser. He also controversially took a position as an adviser to the Modern Markets Initiative, a high-frequency traders’ lobby group -- a move that left many of his former supporters disappointed, with some labelling him a "sellout." Chilton defended his actions by saying there was "a significant symmetry between the MMI and what I have called for over the years."

He joined RT America, the Kremlin-backed network, in 2018, and advocated tighter regulation for bitcoin trading.

Chilton, who lived in Gulf Breeze, Florida, was married to Sherry Daggett Chilton.


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