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Can We Fix The Stock Market? Interview w/ SEC Chairman Gary Gensler | The Problem With Jon Stewart - YouTube
Channel: The Problem With Jon Stewart
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Is the SEC the best system
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to do this?
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I think the American public
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kinda gets it.
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That the system
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is not fully working for them.
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-Oh yes, I believe that's true.
-Okay.
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-All right?
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-The apes exposed something
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really interesting.
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They crowdsourced
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a way of rooting out corruption.
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They found things in the system
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that didn't seem right.
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Like, the information that they were getting
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was two weeks old,
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that they weren't being told that
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these 140% shorts...
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totaled at 140%.
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They knew there was a short,
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but they didn't
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get that information until later,
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and they didn't
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get the information to the extent of it.
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And doesn't that show
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that disclosure and transparency
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are not functioning
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to the protection of investors?
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I'm not saying
this is without its challenges.
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There are real challenges.
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They're real challenges.
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Complexity helps them...
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-Gimme a better system.
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Give me a better system to do this
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than the one we have in place.
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Cause the one we have in
place is getting its butt kicked.
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I...
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I believe in this system.
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I believe in our American democracy.
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You're not going to get me to say...
-I'm not saying...
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-...something other than than that...
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-Give me a different system
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-Wait, listen...
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-Purely based on financial,
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the financial system we have
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and the stock market.
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Is there a better system
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than the SEC?
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Is there something in this
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crowdsourcing,
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that the apes brought to bear,
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that can be useful?
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Can there be a partnership
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between the SEC
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and a more crowdsourced...
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-Jon.
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I live within the system I’m in.
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-Dream, man!
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Dream!
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-Yeah, you want... I'll dream.
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But I also want to get things done.
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-Okay.
-I want to get things done
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on behalf of the investing public.
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-Have you thought about
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outside of the bureaucracy?
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Is there something that could help you
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be more agile?
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-So I would say,
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and the compliment
goes to Senator Grassley
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from Iowa.
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He... No...
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Senator Grassley fought hard
-Alright, here we go!
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on a decentralization point
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you're talking about.
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It's called the whistleblower law.
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So, in the aftermath of the ‘08 crisis
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and a big reform law, Dodd-Frank,
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Senator Grassley fought hard
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that this agency
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and some other agencies
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stood up and put in place
a whistleblower program.
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And over the ten or so years
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that this was stood up, we've given...
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...awards.
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That's a crowdsourcing decentralized...
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-What do we need to do?
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And is the SEC not enough?
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You know, if you look at
the past 10 years, right?
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Or the past 20 years,
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the SEC very rarely...
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...will send something
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and recommend it to the DOJ
for prosecution.
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That 2008 financial crisis...
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-That's not true.
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We bring about 700 enforcement,
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700 to 750 enforcement cases a year.
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And I could give you the exact figures
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but a whole chunk of those are also
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joint criminal investigations.
-Right.
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-You know, with all the
financial shenanigans
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that have gone over the years.
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The only person
we've really brought to heel
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is Martha Stewart.
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And that's got to tell you
something about
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just how tilted this thing is.
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-You’ve forgotten a little bit
about Bernie Madoff but...
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-Well, speaking of Bernie Madoff,
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who came up with payment
for order flow?
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Yeah, no I understand.
-Right!
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But he did serve his time
in jail and everything.
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-One guy and one woman.
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Generally, it seems like
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people don't go to jail for financial crimes.
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They pay fines.
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I think that's a fair statement.
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-That's fair.
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-Generally...
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-The Department of Justice, has the
criminal authority.
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-Understood.
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-We have the civil.
-That's right.
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And on the civil side,
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more than 50% of the fines levied
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from SEC judgments are not collected.
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There are less financial judgments
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that are levied now
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than there were 15 years ago.
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It doesn't seem like the SEC
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has the ability
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to keep up.
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Is there anything
that you would think
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could bring more teeth to the SEC,
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in terms of accountability,
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that would be more of a stick?
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-I think what we can do
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is bring
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important cases,
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that are sort of high profile cases,
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that show people “No,
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you're over the line.”
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It could be accounting fraud.
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It could be insider trading.
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-But is there something
that would be more...
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...of a deterrent?
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-More of a deterrent is bars
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where individual.
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Individual accountability.
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There's nothing
like individual accountability
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to send a deterrent
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across the whole market.
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If somebody is held accountable.
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We only have civil law enforcement,
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but that means barring them
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from the industry.
-Trading.
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-Or trading...
-Right.
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...or appearing before us.
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Willing to litigate.
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This agency has to be willing
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to go into court,
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and, you know, take some losses
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from time to time.
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But go into court.
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-Right.
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-I think all of those things,
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but it's trying to use
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high profile cases
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to bring folks back
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on the right side of the line.
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And also, I would say,
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a focus on gatekeepers.
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Gatekeepers: the accountants,
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the lawyers, the underwriters,
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and so forth.
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That sends a signal across a market too.
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-Take out the little guys.
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-No, no, no, no, no.
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The gatekeepers,
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the gatekeepers, Jon.
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-Coming back in a year,
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we're gonna see how this all worked out.
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Give us a little bit more time.
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But yeah, I got it.
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Well, by then, it'll be a whole
different financial market!
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-All right.
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-Really appreciate it.
-Thank you.
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-Fascinating.
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-Thank you.
-Thank you.
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