[ is an American attorney and former public official who, from August 26, 1996, to June 1, 1999, was chair of the ]Commodity Futures Trading Commission
The Commodity Futures Trading Commission (CFTC) is an Independent agencies of the United States government, independent agency of the US government created in 1974 that regulates the U.S. derivatives markets, which includes futures contract, fut ...
(CFTC), the federal agency which oversees the U.S. futures and commodity options markets. During her tenure on the CFTC, Born lobbied Congress
A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
and the President to give the CFTC oversight of off-exchange markets for derivatives, in addition to its role with respect to exchange-traded derivatives,["Concept Release Concerning Over-The-Counter Derivatives market"](_blank)
CFTC Release #4142-98, May 7, 1998. but her warnings were ignored or dismissed, and her calls for reform resisted by other regulators. Born resigned as chairperson on June 1, 1999, shortly after Congress passed legislation prohibiting her agency from regulating derivatives.
In 2009, Born received the John F. Kennedy Profiles in Courage Award, along with Sheila Bair
Sheila Colleen Bair (born April 3, 1954) is an American former government official who was the 19th Chair of the U.S. Federal Deposit Insurance Corporation (FDIC) from 2006 to 2011, during which time she shortly after taking charge of the FDIC i ...
of the Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation (FDIC) is a State-owned enterprises of the United States, United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was cr ...
, in recognition of the "political courage she demonstrated in sounding early warnings about conditions that contributed" to the 2008 financial crisis
The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
.
Early life and education
Born graduated from Abraham Lincoln High School (San Francisco, California)
Abraham Lincoln High School (ALHS, colloquially Lincoln) is a California Distinguished School, California Distinguished public high school located in the Sunset District (San Francisco), Sunset District on the West Side (San Francisco), West Si ...
at the age of 16. She then attended Stanford University
Leland Stanford Junior University, commonly referred to as Stanford University, is a Private university, private research university in Stanford, California, United States. It was founded in 1885 by railroad magnate Leland Stanford (the eighth ...
, where she majored in English and was graduated with the class of 1961. She initially wanted to become a doctor, but a guidance counsellor at Stanford advised her against medicine, so she majored in English literature
English literature is literature written in the English language from the English-speaking world. The English language has developed over more than 1,400 years. The earliest forms of English, a set of Anglo-Frisian languages, Anglo-Frisian d ...
instead.[Groom, Sean]
Legends in the Law: Brooksley Born
Washington Lawyer, 2003.
She then attended Stanford Law School
Stanford Law School (SLS) is the Law school in the United States, law school of Stanford University, a Private university, private research university near Palo Alto, California. Established in 1893, Stanford Law had an acceptance rate of 6.28% i ...
, one of only seven women in her class. She was the first female student ever to be named president of the ''Stanford Law Review
The ''Stanford Law Review'' (SLR) is a legal journal produced independently by Stanford Law School students. The journal was established in 1948 with future U.S. Secretary of State Warren Christopher as its first president. The review produce ...
''. She received the "Outstanding Senior" award and graduated as valedictorian
Valedictorian is an academic title for the class rank, highest-performing student of a graduation, graduating class of an academic institution in the United States.
The valedictorian is generally determined by an academic institution's grade poin ...
of the class of 1964.
Legal career
Immediately after law school Born was selected as a law clerk
A law clerk, judicial clerk, or judicial assistant is a person, often a lawyer, who provides direct counsel and assistance to a lawyer or judge by Legal research, researching issues and drafting legal opinions for cases before the court. Judicial ...
to judge Henry Edgerton of the U.S. Court of Appeals for the District of Columbia Circuit. It was during this time that she met her first husband, Jacob C. Landau, who was a journalist covering the Federal courts at the time. Following her clerkship, she became an associate at the Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly known as Washington or D.C., is the capital city and federal district of the United States. The city is on the Potomac River, across from Virginia, and shares land borders with ...
-based international law firm of Arnold & Porter
Arnold & Porter Kaye Scholer LLP, doing business as Arnold & Porter, is an American multinational law firm. It is a white-shoe firm and among the largest law firms in the world, both by revenue and by number of lawyers.
Arnold & Porter was f ...
. Born was attracted to Arnold & Porter because it was one of the few major law firms to have a woman partner at that time, Carolyn Agger, who was the head of the tax practice. Born took a two-year leave of absence from Arnold & Porter to accompany her first husband to Boston, where he had received a fellowship. During that time she worked as a research assistant to law professor Alan Dershowitz
Alan Morton Dershowitz ( ; born September 1, 1938) is an American lawyer and law professor known for his work in U.S. constitutional law, U.S. constitutional and American criminal law, criminal law. From 1964 to 2013, he taught at Harvard Law Sc ...
.
Born's early career at Arnold & Porter focused on international trade law, in which she represented a number of Swiss industries and the government of Switzerland. She developed a practice representing clients in numerous complex litigation and arbitration cases involving financial market transactions. Among her high-profile cases was the matter of the Hunt Brothers attempt to corner the market in silver in the 1970s. She made partner at Arnold & Porter, after moving to a three-day schedule to help raise her second child, and eventually rose to be the head of the firm's derivatives practice.
Born was among the first female attorneys to systematically address inequities regarding how the laws treated women. Born and another female lawyer, Marna Tucker, taught what is considered to have been the first "Women and the Law" course at Catholic University
Catholic higher education includes universities, colleges, and other institutions of higher education privately run by the Catholic Church, typically by religious institutes. Those tied to the Holy See are specifically called pontifical univers ...
’s Columbus School of Law
The Catholic University of America Columbus School of Law is the law school of the Catholic University of America, a private Roman Catholic research university in Washington, D.C., United States.
More than 370 Juris Doctor students attend the ...
. The class exclusively concerned prejudicial treatment of women under the laws of the United States, past and present. Born and Tucker were surprised to discover that there was no textbook on the issue at the time. Born is also one of the co-founders of the National Women's Law Center. Born also helped rewrite the American Bar Association
The American Bar Association (ABA) is a voluntary association, voluntary bar association of lawyers and law students in the United States; national in scope, it is not specific to any single jurisdiction. Founded in 1878, the ABA's stated acti ...
rules to make it possible for more women and minorities to sit on federal bench.
During her long legal career, and into her retirement, Born did much ''pro bono
( English: 'for the public good'), usually shortened to , is a Latin phrase for professional work undertaken voluntarily and without payment. The term traditionally referred to provision of legal services by legal professionals for people who a ...
'' and other types of volunteer work. She was active in the American Bar Association, the largest professional organization of lawyers in the United States. Initially Born was named a member of the governing council of the ABA's Individual Rights Section, eventually becoming chairperson. Born and Tucker founded the ABA Women's Caucus, the first organization of female lawyers in the ABA. She held several other senior positions in the ABA, including being named the first woman member of the ABA's Standing Committee on the Federal Judiciary. As a member of the Judiciary Committee, Born provided testimony and opinion on persons nominated for federal judgeships. In 1980 she was named chair of the committee. As chair of the committee, Born was invited to address the U.S. Congress
The United States Congress is the legislative branch of the federal government of the United States. It is a bicameral legislature, including a lower body, the U.S. House of Representatives, and an upper body, the U.S. Senate. They both ...
regarding the nomination of Judge Sandra Day O'Connor
Sandra Day O'Connor (March 26, 1930 – December 1, 2023) was an American attorney, politician, and jurist who served as an associate justice of the Supreme Court of the United States from 1981 to 2006. Nominated by President Ronald Reagan, O' ...
to the U.S. Supreme Court
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that turn on question ...
.
In 1993, Born's name was floated as a possible candidate for Attorney General of the United States
The United States attorney general is the head of the United States Department of Justice and serves as the chief law enforcement officer of the federal government. The attorney general acts as the principal legal advisor to the president of the ...
, but Janet Reno
Janet Wood Reno (July 21, 1938 – November 7, 2016) was an American lawyer and public official who served as the 78th United States Attorney General, United States attorney general from 1993 to 2001 under President Bill Clinton. A member of ...
was nominated.
In July 2009, Nancy Pelosi
Nancy Patricia Pelosi ( ; ; born March 26, 1940) is an American politician who was the List of Speakers of the United States House of Representatives, 52nd speaker of the United States House of Representatives, serving from 2007 to 2011 an ...
appointed Brooksley Born as a commissioner to the Financial Crisis Inquiry Commission (FCIC).
Born and the OTC derivatives market
Born was appointed to the CFTC on April 15, 1994, by President Bill Clinton
William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician and lawyer who was the 42nd president of the United States from 1993 to 2001. A member of the Democratic Party (United States), Democratic Party, ...
. Due to litigation against Bankers Trust Company by Procter and Gamble
The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio. It was founded in 1837 by William Procter and James Gamble. It specializes in a wide range of personal health/cons ...
and other corporate clients, Born and her team at the CFTC sought comments on the regulation of over-the-counter derivatives, a first step in the process of writing CFTC regulations to supplement the existing regulations of the Federal Reserve System
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...
, the Options Clearing Corporation
Options Clearing Corporation (OCC) is a United States clearing house based in Chicago. It specializes in equity derivatives clearing, providing central counterparty (CCP) clearing and settlement services to 16 exchanges. It was started by ...
, and the National Association of Insurance Commissioners
The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. terri ...
. Born was particularly concerned about swaps, financial instruments that are traded over the counter between banks, insurance companies or other funds or companies, and thus have no transparency except to the two counterparties and the counterparties' regulators, if any. CFTC regulation was strenuously opposed by Federal Reserve
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...
chairman Alan Greenspan
Alan Greenspan (born March 6, 1926) is an American economist who served as the 13th chairman of the Federal Reserve from 1987 to 2006. He worked as a private adviser and provided consulting for firms through his company, Greenspan Associates L ...
, and by Treasury Secretaries Robert Rubin
Robert Edward Rubin (born August 29, 1938) is an American retired banking executive, lawyer, and former Federal government of the United States, government official. He served as the 70th United States Secretary of the Treasury, U.S. secretary o ...
and Lawrence Summers
Lawrence Henry Summers (born November 30, 1954) is an American economist who served as United States Secretary of the Treasury from 1999 to 2001 and as the director of the National Economic Council from 2009 to 2010. He also served as presiden ...
. On May 7, 1998, former SEC Chairman Arthur Levitt
Arthur Levitt Jr. (born February 3, 1931) is the former chairman of the United States Securities and Exchange Commission (SEC). He served from 1993 to 2001 as the twenty-fifth and longest-serving chairman of the commission. Widely hailed as a ...
joined Rubin and Greenspan in objecting to the issuance of the CFTC's concept release. Their response dismissed Born's analysis and focused on the hypothetical possibility that CFTC regulation of swaps and other OTC derivative instruments could create a "legal uncertainty" regarding such financial instruments, hypothetically reducing the value of the instruments. They argued that the imposition of regulatory costs would "stifle financial innovation" and encourage financial capital to transfer its transactions offshore. The disagreement between Born and the Executive Office's top economic policy advisors has been described not only as a classic Washington turf war,[Schmitt, Rick]
Prophet and Loss - Brooksley Born warned that unchecked trading in the credit market could lead to disaster
, ''Stanford News'', March 2009. but also a war of ideologies, insofar as it is possible to argue that Born's actions were consistent with Keynesian
Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output an ...
and neoclassical economics
Neoclassical economics is an approach to economics in which the production, consumption, and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a go ...
while Greenspan, Rubin, Levitt, and Summers consistently espoused neoliberal
Neoliberalism is a political and economic ideology that advocates for free-market capitalism, which became dominant in policy-making from the late 20th century onward. The term has multiple, competing definitions, and is most often used pej ...
, and neoconservative policies.
In 1998, a trillion-dollar hedge fund called Long Term Capital Management (LTCM) was near collapse. Using mathematical models to calculate debt risk, LTCM used derivatives to leverage $5 billion into more than $1 trillion, doing business with fifteen of Wall Street's largest financial institutions. The derivative transactions were not regulated, nor were investors able to evaluate LTCM's exposures. Born stated, "I thought that LTCM was exactly what I had been worried about". In the last weekend of September 1998, the President's working group was told that the entire American economy hung in the balance. After intervention by the Federal Reserve, the crisis was averted. In congressional hearings into the crisis, Greenspan acknowledged that language had been introduced into an agriculture bill that would prevent CFTC from regulating the derivatives which were at the center of the crisis that threatened the US economy. U.S. Representative Maurice Hinchey (D-NY) asked "How many more failures do you think we'd have to have before some regulation in this area might be appropriate?" In response, Greenspan brushed aside the substance of Born's warnings with the simple assertion that "the degree of supervision of regulation of the over-the-counter derivatives market is quite adequate to maintain a degree of stability in the system". Born's warning was that there wasn't any regulation of them. Born's chief of staff, Michael Greenberger summed up Greenspan's position this way: "Greenspan didn't believe that fraud was something that needed to be enforced, and he assumed she probably did. And of course, she did." Under heavy pressure from the financial lobby, legislation prohibiting regulation of derivatives by Born's agency was passed by the Congress. Born resigned on June 1, 1999.
The derivatives market continued to grow yearly throughout both terms of George W. Bush's administration. On September 15, 2008, the bankruptcy of Lehman Brothers
The bankruptcy of Lehman Brothers, also known as the Crash of '08 and the Lehman Shock, on September 15, 2008, was the climax of the subprime mortgage crisis. After the financial services firm was notified of a pending credit downgrade due to i ...
forced a broad recognition of the 2008 financial crisis
The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
. As Lehman Brothers' failure temporarily reduced financial capital's confidence, a number of newspaper articles and television programs suggested that the failure's possible causes included the conflict between the CFTC and the other regulators.[Faiola, Anthony, Nakashima, Ellen and Drew, Jill]
The Crash: Risk and Regulation - What Went Wrong
''The Washington Post
''The Washington Post'', locally known as ''The'' ''Post'' and, informally, ''WaPo'' or ''WP'', is an American daily newspaper published in Washington, D.C., the national capital. It is the most widely circulated newspaper in the Washington m ...
'', October 15, 2008.
Born declined to publicly comment on the unfolding 2008 crisis until March 2009, when she said: "The market grew so enormously, with so little oversight and regulation, that it made the financial crisis much deeper and more pervasive than it otherwise would have been." She also lamented the influence of Wall Street lobbyists on the process and the refusal of regulators to discuss even modest reforms.
An October 2009 '' Frontline'' documentary titled "The Warning" described Born's thwarted efforts to regulate and bring transparency to the derivatives market, and the continuing opposition thereto. The program concluded with an excerpted interview with Born sounding another warning: "I think we will have continuing danger from these markets and that we will have repeats of the financial crisis -- may differ in details but there will be significant financial downturns and disasters attributed to this regulatory gap, over and over, until we learn from experience."[Kirk, Michae]
"The Warning"
''Frontline'', ''PBS'' public affairs program, October 20, 2009.
In 2009 Born, along with Sheila Bair
Sheila Colleen Bair (born April 3, 1954) is an American former government official who was the 19th Chair of the U.S. Federal Deposit Insurance Corporation (FDIC) from 2006 to 2011, during which time she shortly after taking charge of the FDIC i ...
of the FDIC, was awarded the John F. Kennedy Profiles in Courage Award in recognition of the "political courage she demonstrated in sounding early warnings about conditions that contributed" to the 2008 financial crisis
The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
. According to Caroline Kennedy
Caroline Bouvier Kennedy (born November 27, 1957) is an American author, diplomat, and attorney who served as the List of ambassadors of the United States to Australia, United States ambassador to Australia from 2022 to 2024. She previously serv ...
, "Brooksley Born recognized that the financial security of all Americans was being put at risk by the greed, negligence and opposition of powerful and well connected interests.... The catastrophic financial events of recent months have proved them orn and Sheila Bairright." One member of the President's working group had a change of heart about Brooksley Born. SEC Chairman Arthur Levitt stated "I've come to know her as one of the most capable, dedicated, intelligent and committed public servants that I have ever come to know", adding that "I could have done much better. I could have made a difference" in response to her warnings.
In 2010, a documentary film ''Inside Job'' further alleged that derivatives regulation was ineffective from the Clinton administration on. Along with fellow whistleblower, former IMF Chief Economist Raghuram Rajan
Raghuram Govind Rajan (born 3 February 1963) is an Indian economist and the Katherine Dusak Merton Miller, Miller Distinguished Service Professor of Finance at the University of Chicago's Booth School of Business. Quote: "I am an Indian citizen ...
, who was also scorned by the economic establishment, Brooksley Born was cited as one of the authorities arguing that financial derivatives
In finance, a derivative is a contract between a buyer and a seller. The derivative can take various forms, depending on the transaction, but every derivative has the following four elements:
# an item (the "underlier") that can or must be bou ...
increase economic risk.
Personal life
Born is married to Alexander E. Bennett (also retired from Arnold & Porter
Arnold & Porter Kaye Scholer LLP, doing business as Arnold & Porter, is an American multinational law firm. It is a white-shoe firm and among the largest law firms in the world, both by revenue and by number of lawyers.
Arnold & Porter was f ...
). She has five adult children - two from a previous marriage to Jacob Landau and three stepchildren.[Leising, Matthew and Runningen, Roger]
"Brooksley Born `Vindicated' as Swap Rules Take Shape (Update1)"
,''Bloomberg
Bloomberg may refer to:
People
* Daniel J. Bloomberg (1905–1984), audio engineer
* Georgina Bloomberg (born 1983), professional equestrian
* Michael Bloomberg (born 1942), American businessman and founder of Bloomberg L.P.; politician a ...
'', November 13, 2008. Notably, Born was named a partner at Arnold & Porter while working part-time so she could raise her two young children. When both of her children were school-age, Born returned to practice full-time.
References
External links
Attorney profile
at Arnold & Porter
Brooksley Born (2009 Winner)
of the Profiles in Courage Award
The Profile in Courage Award is a private award created by the Kennedy family to recognize displays of courage similar to those John F. Kennedy originally described in his Profiles in Courage, book of the same name. It is given to individuals (of ...
, with acceptance speech transcript an
NECN video
*
*
Profile
at MarketsWiki
;Speeches and statements
before the House Committee On Banking And Financial Services, July 24, 1998.
Remarks of Brooksley Born, Chairperson of the CFTC, Chicago-Kent-IIT Commodities Law Institute, Chicago, Illinois, October 15, 1998.
for " PBS Frontline: The Warning", ''PBS
The Public Broadcasting Service (PBS) is an American public broadcaster and non-commercial, free-to-air television network based in Arlington, Virginia. PBS is a publicly funded nonprofit organization and the most prominent provider of educat ...
'',
streaming VIDEO 1 hour
, October 20, 2009.
;Articles
*Manuel Roig-Franzi
''The Washington Post
''The Washington Post'', locally known as ''The'' ''Post'' and, informally, ''WaPo'' or ''WP'', is an American daily newspaper published in Washington, D.C., the national capital. It is the most widely circulated newspaper in the Washington m ...
'', May 26, 2009
* Taibbi, Matt
"The Great American Bubble Machine"
''Rolling Stone
''Rolling Stone'' is an American monthly magazine that focuses on music, politics, and popular culture. It was founded in San Francisco, California, in 1967 by Jann Wenner and the music critic Ralph J. Gleason.
The magazine was first known fo ...
'', July 9–23, 2009
{{DEFAULTSORT:Born, Brooksley E.
1940 births
20th-century American women lawyers
20th-century American lawyers
Arnold & Porter people
Clinton administration personnel
Columbus School of Law faculty
Commodity Futures Trading Commission personnel
Heads of United States federal agencies
Lawyers from San Francisco
Living people
Stanford Law School alumni
Stanford University alumni
21st-century American women lawyers
21st-century American lawyers