the SEC leadership still making headlines with Just 4 days left before president-elect Donald Trump taking office the current SEC chair Gary kensler stepping down yesterday two Robin Hood broker dealers agreed to pay $45 million to settle SEC charges that they violated more than 10 security law Provisions related to brokerage operations we're going to talk about that and so much more joining us right now is SEC chair Gary gendler in his exit interview um Gary thank you so much for joining us and and thank you uh for uh talking with us uh throughout uh your time
in office uh there's about a 100 questions that I I have on my list but I want to start with one that I think actually may be in a way the hardest um and I think it's a a political question but it's also a philosophical question uh which is when you look back at um the work that you did over the last four years and you also look at this election specifically this election and you look at the number of folks in the C crypto world who ultimately turned out not just turned out for president-elect
Trump but uh turned out for president-elect Trump with money with dollars the huge amount of money that went into effectively his campaign as to some degree a rebuke of what was happening with your um efforts to block some of the things that they were doing I'm so curious how you personally think about that today uh first Andrew Joe Becky so good to be with you and thank you for inviting me um look I think um I believe deeply in Eric great democracy I think th this election uh though as you point out there was money
uh raised from the crypto field I don't think that's what this election was about um this field the crypto field a highly speculative field is uh has not been compliant with various laws whether it's any money laundering laws sanctions laws or in our case Securities laws now bitcoin's not a security but these 10 or 15,000 other tokens the investing public has been hurt over uh the the many years my predecessor Jay Clayton uh who's going to serve again in the Trump Administration but Jay Clayton had brought about 80 cases we're a law enforcement agency that's
what we've continued to do to protect the investing public so they get disclosure to protect against fraud manipulation and there's just been too much of that in the in this field and then of course to address conflicts when uh you had these crypto exchanges not only operating as exchanges but also trading against their customers and on and on Gary I I think the question though is you know some CR critics have said that the SEC has pursued a policy that has been focused more on uh litigation if you will or Rules by way of litigation
than actual law uh that perhaps there should have been a greater effort put on creating uh real laws not just guidelines which then created this litigation um I'm looking by the way at even what just took place in the last what 48 Hours uh from this uh this court as it relates to the coinbase case where they're asking the SEC now your uh effectively you to quote explain yourself uh as it relates to some of the things that are being done and by the way the judge in the case said to the SEC quote it
should not give yet another poor explanation and an already long line of them and so I know it's it's a hard question but I I I put it to you because I think that the public is trying to understand the way you've thought about it thus far look I I thought about it that we have laws Congress has passed those laws of course they can change them but a a sector of this field crypto uh the investing public is investing based on projects and these things without prejudging any one of them many of them are
under the Securities laws and in that field there's a lot of non-compliance look Andrew in most of what you talk about on any given day you talk about the fundamentals of a stock or a bond or the market the valuations of mix fundamentals and momentum or sentiment and this crypto field seems to trade mostly on sentiment and much less on fundamentals but if the fundamentals are there and I say if then make the proper disclosures under the Securities laws that's that's the basic bargain I I glad to have you coming on today uh CH gzo
and I was thinking of a of a just an overriding question about uh Bitcoin and what we've seen for the past four years under your tenure and I can only come up really with with two scenarios and neither one of them uh are great the first one is that uh under your leadership it was you know really dragged Kicking and Screaming into where we are today and it's a far cry from four years ago you'd have to admit it you know with ETFs and adoption by uh so many different firms it's almost like there were
so many obstacles put up for it made it very hard for what could be a trans formative new asset or industry so that's on the one hand that you did or on the other hand it should have been very closely scrutinized and at $95,000 if this is is ephemeral and built on air a and a beanie baby there's going to be an absolute blood bath so either you stood in the way of of a totally new industry or you were unable to prevent a huge bubble from forming which is going to end very badly and
neither one is going to be much of of a of a legacy to look back on Joe I know from our conversations in the past you view Bitcoin very differently than these 10 or 15,000 other tokens it was hard for Bitcoin under under you though under your regime it's very difficult for anything good to happen for Bitcoin Joe within the first few months in the job we had Bitcoin exchange traded uh funds based on Futures also you you you recall when I was coming into this role the whole GameStop events and that market is so
much more critical to you and the American public than crypto the 60 trillion Equity markets and we have put in fundamental reforms not only shortening the settlement cycle where you can get your money in one day rather than two day if you're an everyday investor but that actually the markets will be more efficient we addressed ourselves to the second most important Market I would say the US Treasury Market that had had Jitters for so long a$ 28 trillion market and fundamental important reforms we addressed ourselves to corporate governance that a Insider no longer can file
a plan on a Monday the same time they have Insider information and sell their stock on a Tuesday they'll now have to wait three months so I'm very proud of the record and this uh Focus that you all have had on crypto I understand it brings in eyeballs it sells uh newspapers and so forth but the capital markets at $120 trillion I'm very proud of our record Gary let me let me go to a different topic we're going to move way off of crypto uh but another topic that has has frankly become quite controversial uh
which is both climate rules which are now um you know in litigation that you put forward and then there were efforts early on that I think effectively either were abandoned or you tell me around ESG rules uh boosting board diversity for example uh there were some Workforce uh management issues and other things and the whole country or world seems to have shifted in some in some way you may not agree with the way it it has shifted but I again wonder how you think about this election what you think's happened in the even in this
country uh almost every single day today there is another Fortune 500 company coming out with announcements that they're abandoning uh de programs they're abandoning uh ESG programs they're abandoning a lot of the things that were being talked about by this Administration and by the SEC as it related to rules and other things that they were trying to put forward um Andrew as a Securities regulator I'm neutral to just about all that you just said we're not a climate regulator and we are not a work work force regulator we're Securities regulator but when I came into
the role we had found that of the top thousand companies listed on the exchanges a majority were making disclosures about their climate risks and investors were telling us that they found those disclosures inconsistent but material to their investment decisions so we we grounded in materiality we went out we heard the public we got tens of thousands of comments lots of investors who wanted this information to be more consistent and just based on material information and I've been consistent since my confirmation that we would ground it in just what's material to investors uh as you might
recall the back and forth uh yes some Advocates wanted more but we're just a Securities regulator and I believe that we uh rightly just addressed try to bring consistency even if even if we uh even if we both we could stipulate uh that that it was for disclosure purposes I'm curious just on a very personal level what now that you're you're you're taking off and leaving the role what you make of this reversal as it relates to ESG and Dei and so many of these other things that had become almost a um staple of corporate
America over the last uh four five six seven years that was developing well I I know in just managing the C is 5,000 people we benefit from recruiting and uh giving opportunities to the diverse population we have in America 330 million people regardless of gender race or background uh or orientation that helps our agency but in terms of a Securities regulator uh really investors have to decide what's relevant we did not put forward we at the SEC under my leadership didn't put forward any disclosure rules around uh Workforce or uh diversity we did come in
and do something around climate because that's the markets were already having those disclosures what I do think is the markets will figure out the investors will figure out whether the climate disclosure is relevant and material to their investment decisions but is it material it it was material a couple of years AO and it's not now I don't understand the materiality of it and whether some investors decide that or whether it's just very gray I think Becky you're right that things can change uh 20 and 30 years ago uh com companies did not make disclosures about
cyber risk they didn't make disclosures around climate risk I came into the op role and found many many investors wanted and demanded that type of disclosure and so we took those two projects up uh what might be the case five or 15 years from now could shift as well and I think our great agency is just about uh bringing some consistency and truthfulness that people don't lie think about artificial intelligence right now many companies are sort of puffing themselves up and promoting that it's important that they not uh let's say call it AI wash that
they're truthful in what they say G earlier um just to return just just what I understand completely how what you think is going to happen or whether you're thinking is evolved it almost sounded like you you wanted to uh to separate Bitcoin from the rest of the industry and I'm wondering whether you're actually warming to to the idea of of uh of of at least Bitcoin and whether I people are are tweeting you that I said you either stood in the way of an extraordinary industry or were utterly unable to prevent a a massive bubble
um what do you think the future holds do do you have a feeling on wh which it is do you think Bitcoin has inherent value and is a store of value or do you feel that that when we look back on it 10 15 20 years from now it's going to be something from the 18th century with tulips uh Joe it's it's hard to predict I think I really do like you because I know that you think uh I'm going to out you think negatively on many of these alt coins you Joe but in terms
of in terms of Bitcoin we at the SEC have never said it's a security I have not what you think you taught at MIT I think you know I think you got to have some kind of feeling you read you've read the books Bitcoin standard yeah I think I think that Bitcoin is a highly speculative uh volatile asset but with 7 billion people around the Globe uh 7 billion people want to trade it just like we do have gold for 10,000 years we have Bitcoin it might be something else in the future as well these
other thousands of projects need to show their use case and show that they actually have fundamentals underlying them or they won't persist Joe oh my God you own bit where the public that's why the public need disclosure I've never owned you love it you don't like those other coins I've never owned any of these and I've been consistent for seven or eight years on this well now you can't because you won't be a sec chair anymore hey Gary different Lane uh one of the other new features of the market or a market um is this
idea of prediction markets uh we just had the co of KI on the broadcast yesterday uh he has brought on to uh his business uh as an advisor uh Donald Trump Jr um I'm curious what you think of prediction markets and I'm actually very curious specifically what do you think of ki's decision to hire uh the son of the president-elect I have I have no views on who somebody hires but but Capital markets themselves are great vast $ 120 trillion doll Capital markets whether it's stocks whether its bonds whether ultimately its prediction markets are about
predicting future cash flows of are predicting future uh opportunities for businesses that you have on the air so they're all in sense about prediction markets and that's why I'm so proud what we did some of the reforms we put in place is to have better disclosure yes on only that which is material to investors so they can make their own judgments about the future that's in essence a prediction Market um treasuries settlements on treasuries uh there's been a little bit of a debate about uh what's happened obviously this fall about what the timeline is going
to look like into the future uh after you're out of this office what's your take well their US Treasury Market is the base of our Capital markets I'm very proud of what we did working with Janet Yellen working with J pal a bipartisan reforms that we put in place to build greater resiliency lower the risk of our US Treasury Market while also promoting more competition what's called all toall trading so uh there's forward momentum there's still things to be implemented over the next 18 months but I note this our $28 trillion treasury market is predicted
by the Congressional budget office to grow to about 35 or 36 trillion in four years it's going to grow 25% and so we need these reforms uh to make sure the markets work smoothly and taxpayers can have the confidence their government can borrow in you know liquid markets that the International Community trusts Gary what do you think the biggest risk in the market is today look I think we're we have a presidential transition and and democracy has spoken but there's policy uncertainty there always are around these transitions uh some of those policies uh will be
sorted out over time but there's policy uncertainties uh for sure I have spoken over these last four years there's also pockets of capital markets that have a lot of Leverage a lot of borrowing and low margin and that's usually in this sort of space between the commercial Banks providing leverage to the macro hedge funds in What's called the repo market and then lastly I do think that artificial intellig Ence is transformative already is affected productivity in a positive way but there's still risk out there on the horizon how much do you think about the shadow
banking system in terms of the loan Market which in many ways has moved away from the traditional Banks though there's a connection to the traditional Banks look I I think Capital markets are best when they're competitive they're deep and lots have access that's what we have promoted at the SEC and the reforms we've done and so the the large private fund Market whether it's private credit private Equity Venture I think that's been a a feature not a bug of our Capital markets and we benefit As Americans to have large robust nonbank uh provisions of capital
okay Gary uh before we let you go here's the final question and I asked this Con and I want you to think about the answer if you could do it again and you could do anything differently given all of the things that we've just talked about what would it be so you don't want me to just say come on your show more often right we can we can do that we'd love to have you back and now you'll be uh big mistake not coming now you'll be untethered completely yeah big mistake not coming on more
look look look I would say this uh Joe and Becky Andrew and your listeners it is a great privilege to serve I think that we put in fundamental important reforms on three quarters of our Capital Market the stock market and the treasury market measured 90 trillion total we put in place key reforms on corporate governance that insiders can't sell their stock in a day but need to wait the the uh 90 days but also with regard to that they have to give back uh a compensation that they might have for erroneous profits I think we
settled a really tough thing with China so I'm really proud of what we did but we're human we're not going to get you're an introspective guy there's got to be something on the list you say you know what I would have done that that's the one thing in retrospect I wish I could have gotten to something no look look I would have liked to have got these treasury market reforms and Equity Market reforms finalized and certainly with the courts and this is important to your viewers the courts are shifting dramatically and I I would have
definitely wanted to have been able to anticipate all the shifts in the court so that we could do things that were survived Court challenge a little better Gary want to thank you uh for engaging with us over the next over the last four years we hope we're going to get to engage with you a lot more unplugged uh if you will over the next four and we look forward to seeing you again very very soon congratulations on your uh on your four years of in the role we'll see you very soon thank you
