Wall Street Regulator Facing Cash Crunch Offers Staff Buyouts

(Bloomberg) -- The main U.S. regulator of complex derivatives that helped fuel the 2008 financial crisis is offering some of its employees buyouts after lawmakers refused years of agency requests to increase funding.

Facing a cash crunch, the Commodity Futures Trading Commission began telling workers last month that it would give eligible employees as much as $25,000 to leave, according to an email sent to staff. The regulator also said it would allow early retirement, in some cases, while allowing employees to keep their full benefits.

The CFTC was widely considered a Washington backwater that mostly regulated agricultural futures before the economic meltdown a decade ago. That changed when Congress gave the agency primary responsibility for overseeing the swaps market after the crisis exposed major gaps in the policing of Wall Street’s derivatives trades.

But the CFTC’s $249 million annual budget hasn’t kept pace with its mushrooming duties, which now include regulating cryptocurrency derivatives after CME Group Inc. and Cboe Global Markets Inc. began offering Bitcoin futures last December. CFTC Chairman J. Christopher Giancarlo, installed in the top job by President Donald Trump, has unsuccessfully tried to persuade lawmakers to give the 700-person agency more money since taking over last year.

To be eligible for a buyout, employees must have at least three years of continuous service in the federal government, according to the staff email, which was reviewed by Bloomberg. To qualify for early retirement, employees must be at least 50 years old and have 20 years of government experience, though workers of any age qualify if they have 25 years of government service.

CFTC spokeswoman Erica Elliott Richardson declined to comment.

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