Citadel Securities, the US market maker owned by billionaire Ken Griffin, has snapped up Heath Tarbert, the former head of the main US derivatives regulator, to be its new chief legal officer.
Tarbert left the Commodity Futures Trading Commission just 27 days ago, having resigned as its chair after an 18-month tenure.
Citadel Securities’ announcement on Thursday marked the latest in a long list of hires from US regulators by Griffin. Tarbert replaces Steve Luparello, Citadel Securities’ general counsel, who is a former director of the Securities and Exchange Commission’s division of trading and markets.
Griffin also hired Gregg Berman, the SEC’s former head of research who examined the role of high-frequency trading on the world’s largest equity market, as well as Ryan VanGrack, who was an adviser to former SEC chair Mary Jo White, among others.
The move has reawakened accusations of a so-called revolving door from public service to private work.
“This is just the latest regrettable example of a senior government official selling out his public service to big finance,” said Dennis Kelleher, president of the advocacy group Better Markets. “This corruption disgusts the American people and Congress should outlaw it.”
Shawn Fagan, chief legal officer of Citadel, the hedge fund also owned by Griffin, said in a statement that “Heath has significant leadership experience and legal expertise, as well as a commitment to advocating for markets that are competitive, transparent and resilient”.
Under Tarbert the CFTC set several records for enforcement, including the most cases in a fiscal year.
The move to Citadel Securities marks a return to commercial work for Tarbert, who previously worked on international relations roles at the US Treasury department and was head of the bank regulatory practice of Allen & Overy, the law firm.
“Citadel Securities has been a leading advocate for open and transparent markets,” he said. “I look forward to working with its outstanding team to build upon the firm’s record of creating better markets for investors.”
Tarbert joins the firm after it has come under intense scrutiny for its position as the largest market maker in the US equity market, and its role in January’s fevered trading of so-called meme stocks such as GameStop and AMC Entertainment.
Buying and selling became so heavy some brokers, such as Robinhood, were forced to restrict trading in GameStop shares, drawing anger from customers and high-profile politicians.
In February lawmakers grilled Griffin on Citadel Securities’ business model, in which it daily draws in thousands of orders from brokers including Robinhood, with some suggesting it causes conflicts of interest.
Griffin’s company executed roughly 14 per cent of all daily stock trades last month, according to data from Bloomberg.
Griffin was joined in his appearance before a congressional hearing by the chief executive of Robinhood, whose chief legal officer is Dan Gallagher, a former commissioner at the SEC.