Bernanke’s not alone: 5 financial crisis regulators cashing in on new careers
The man who occupied one of the most important economic posts in the U.S. during the financial crisis will soon be collecting his paychecks from one of the largest hedge funds on Wall Street.
Former Federal Reserve board chairman Ben Bernanke, who oversaw the country’s central bank from 2006 until last year, will be a senior adviser to Citadel, the hedge fund announced Thursday morning. Founded by billionaire Kenneth Griffin, Citadel manages $25 billion in assets.
Bernanke, a former economics professor at Princeton University, left the Fed more than a year ago at which point he was succeeded by current chair Janet Yellen. Bernanke’s new role will find him advising Citadel on global economic and financial matters and monetary policy.
Speaking with The New York Times about his new career path, Bernanke said he had spent the past year scouting job opportunities, and that Citadel represented the prudent choice due to the fact that the asset manager is not regulated by the Fed. Bernanke also told the Times that he is well aware of the public’s poor reception to the so-called “revolving door” that escorts so many Washington regulators to cushy Wall Street positions. That is exactly why he chose Citadel over various banking and lobbying positions he was offered elsewhere in the industry, Bernanke said.
After all, Bernanke’s tenure at the Fed will primarily be remembered for his role helping to engineer the government bailout of the financial industry, as well as for implementing the Fed’s economic stimulus program.
As the former Fed chair alluded to, though, Bernanke is far from the only high-profile government employee to have spent the late-2000’s fiscal crisis trying to right the Wall Street ship only to eventually land a lucrative gig in the financial industry. Here are five former regulators from the financial crisis who left the government to make millions.
1. Ben Bernanke
It seems like only yesterday when Fortune's own Chris Matthews welcomed Bernanke to the world of economics bloggers after the former Fed chief launched his own blog for the Brookings Institution. (It was actually only a couple of weeks ago.)
Now, Bernanke will be able to supplement his blogging income with what is likely to be a slightly more lucrative gig. Though the former Fed chair has not discussed the size of his compensation, it is likely more than the $200,000 annual salary he earned as Fed chief — an amount, the Times notes, Bernanke can now earn in just one speaking engagement.
2. Timothy Geithner
Geithner was another primary architect of the government's $700 billion bank bailout. Now, the former U.S. Treasury Secretary — he served from 2009 to 2013 — leads a Wall Street firm with roughly $35 billion in assets under management. Geithner joined Warburg Pincus as its president last year and he can also pull in a fair amount on the speaking circuit, reportedly commanding six figures per engagement.
Interestingly, Geithner landed a lucrative Wall Street gig after wrapping up his government career after his predecessor at the Treasury, Henry Paulson, took the opposite career path. Paulson went to work for the government only after amassing a fortune at Goldman Sachs (GS) and has spent his post-government life writing books and running his policy group, the Paulson Institute. Meanwhile, Geithner spent more than a decade working his way up the ranks at the Treasury before a stint at the Federal Reserve Bank of New York that preceded his appointment as Treasury Secretary.
3. Larry Summers
Another former Treasury Secretary. Lawrence Summers, who served in that role under Bill Clinton and went on to be president of Harvard University, returned to government work in 2009 when President Obama appointed him as director of the White House National Economic Council.
After spending nearly two years as one of Obama's top economic advisers during the financial crisis, though, Summers returned to more lucrative work as a consultant to large financial firms such as Citigroup and the hedge fund D.E. Shaw. Summers, who already had a personal net worth in the millions of dollars when he joined the Obama administration, has been padding those figures as a board member for tech startups such as peer-to-peer lender Lending Club and mobile payments company Square.
4. Christopher Cox
Cox served as chairman of the U.S. Securities & Exchange Commission at the outset of the financial crisis before stepping aside for successor Mary Schapiro, who helped reshape the agency during the most tumultuous years of the recession. Meanwhile, Cox ended his government career of more than 20 years in 2009 to join the legal industry. Cox is now a corporate partner at the law firm Morgan, Lewis & Bockius — where partners average $1.6 million in annual profits — and he serves as the president of the firm's lobbying arm.
5. Robert Khuzami
When Mary Schapiro went about reshaping the SEC during the financial crisis, one of her early moves was to hire Khuzami to head up the agency's enforcement division. A former federal prosecutor who also served a sting as Deutsche Bank's top lawyer, Khuzami had a long history of prosecuting white-collar crimes such as insider trading and other financial frauds. At the SEC, Khuzami oversaw a division that went hard after alleged incidents of Wall Street fraud, setting records for annual civil actions filed.
Then, in 2013, Khuzami decided to leave the government for a return to private practice, joining one of the world's most profitable law firms, Kirkland & Ellis, which reportedly guaranteed him a paycheck of better than $5 million per year.