CFTC head resigns, accepts mercantile exchange job

WASHINGTON (AP) — The head of the federal agency that regulates the nation's commodity exchanges is resigning to take a top job at the New York Mercantile Exchange, where trading in natural gas futures has been probed by the agency.

James Newsome, who was appointed by President Bush, has been chairman of the Commodity Futures Trading Commission since December 2001 and was acting chairman for most of that year. His term does not expire until June 2006.

On Friday, when Newsome's plans were announced, the Nymex's chief executive praised him as having taken a markedly "pro-business stance" as chairman of the regulatory agency.

The CFTC, a small agency with about 500 employees, said his resignation was effective July 23. In a separate statement, Newsome called the Nymex "a valuable franchise."

"I look forward to building on the successes of the exchange and have confidence that we will be able to do just that," he said.

The Nymex said Newsome would become president Aug. 2. He will succeed J. Robert Collins, whose contract expired June 30. As president, he will be the highest-ranking official after Chairman Mitchell Steinhause, who is also the exchange's chief executive and is elected by its member firms.

The Nymex, described as the world's biggest energy futures exchange, has trading in crude oil, gasoline and natural gas futures among other commodities.

The CFTC has been investigating since January whether market manipulation played a role in a sharp spike in natural gas futures prices on the Nymex during that month. Traders' telephone records were subpoenaed and CFTC officials visited the natural gas trading pit at the exchange.

Under government ethics rules, Newsome had recused himself from participating in any CFTC action involving the Nymex in mid-June when he began discussing the job offer from the exchange, agency ethics officer John Dolan said Friday.