By Douwe Miedema
WASHINGTON (Reuters) - The U.S. derivatives regulator needs to better explain how it goes about cracking down on wrongdoers, one of its commissioners said on Monday calling on Congress to conduct a full review.
Scott O'Malia, the only Republican member of the Commodity Futures Trading Commission, wants Congress to review the regulator's internal policies and procedures in enforcement.
"I also encourage the commission to take immediate steps to reevaluate its procedures to ensure that they have legal authority and are transparent to the public," O'Malia said in a statement on Monday.
The CFTC was given new powers to oversee the swaps market, dominated by investment banks such as Citigroup, Bank of America and JPMorgan after the credit meltdown in 2007-09.
Its enforcement division has been making headlines since, most recently when it charged former MF Global chief Jon Corzine over the 2011 collapse of the futures brokerage, one of the country's 10 biggest bankruptcies.
It has also subpoenaed at least two metals warehousing firms, including Glencore, Reuters reported on Monday, as a politically prominent inquiry into complaints about inflated metals prices gathers steam.
O'Malia in his statement dissented from an order to delegate staff members of the CFTC's division of enforcement to issue subpoenas and take testimony, which he said was an unwarranted waiver of the Commission's powers.
The dissent statement was about a specific case, but the documents were redacted, and O'Malia would not say which case it was. He has dissented before on delegating powers to staff.
At stake is the so-called absent-objection procedure, which allows enforcement staff to press ahead with a case without having to receive full approval by the agency's five commissioners, who are political appointees.
The procedure cannot be used for individual matters, but only for omnibus cases, in which the staff seeks to pursue certain types of market wrongdoing, a person familiar with the CFTC's thinking said at the time.
This enabled staff to move quickly, while still giving commissioners a chance to object, the person said. Only if they were traveling or otherwise unable to respond within the required timeframe did they lose that right.
(Reporting by Douwe Miedema; Editing by Leslie Gevirtz)