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Robinhood allowing users to access IPO a 'clever idea': Ex-SEC chairman - YouTube
Channel: Fox Business
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joining me right now on the phone is
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former securities and exchange
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commission chairman
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and the ceo of calorama partners harvey
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pitt
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harvey it's great to talk with you again
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thanks very much for being here
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good to be with you maria yes i want to
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get your take on so many things let's
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talk robin hood for a moment
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and allowing retail investors to get in
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on that ipo
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your reaction my reaction is
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this is a clever idea it will
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require a lot of negotiations between
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robin hood and those who create ipos for
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other companies it will be easy
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for robin hood to do this for its own
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ipo
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because it doesn't have to negotiate
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with anyone
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but it will have to negotiate with
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those on wall street who are handling
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other ipos
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but i think it's simply a question
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of working out arrangements and this
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will be a novel
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an interesting approach
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yeah i mean i'll tell you there's so
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many things happening in the capital
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markets today
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that i'd i'd love you to to to comment
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on
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for example this boom in spax earlier
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this hour
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we uh reported that wework uh is
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agreeing to a spac
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deal with boax acquisition corp and a
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nine billion dollar deal
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this comings as the uh securities and
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exchange commission reportedly is
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investigating the rise
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in special purpose acquisition companies
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according to
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reuters harvey we've seen a string of
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deals
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uh which pretty much allow companies to
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go public
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by merging in with a spac what's your
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reaction to this
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new way of doing things and the rate of
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growth of facts that we're seeing
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i think that as a general proposition
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there are a lot of advantages to it but
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there are also legitimate concerns about
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the welfare
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of those who are encouraged to invest at
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the moment
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i think a lot of people are hearing
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about facts and without really thinking
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through the issues they're following the
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herd so to speak
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and investing without understanding
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exactly what it is they're buying into
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in a sense part of it is you're buying
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into a pig in a post if you buy
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a spac because you don't know what the
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what the
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ultimate entity will be that the stack
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will acquire
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or whether it will acquire any entity
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and uh there are other questions in
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terms of both disclosures
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and insider trading so the sec
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i think is appropriately stepping back
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and looking at this
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right now its inquiry is informal
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which means it's asking people
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voluntarily to turn over
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information but i also believe that no
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one should be misled
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if the sec finds indications of
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concern to it about how investors are
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being treated
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they will get support they will get
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subpoena power and go after
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individual companies right now no
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specific
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public space is being targeted
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i'd say yeah i think it's a really
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interesting point that you make because
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all you really know
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is that any company is going to get
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acquired by a spec
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you don't necessarily uh understand or
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it's not necessarily transparent that
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you know
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you know what growth story that company
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may have or
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how that companies you know fortunes may
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or may not change
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and and what the growth story is right
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off the bat so there's a lot of
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information to
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to be gained from the investor looking
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uh looking into these things
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but let me turn to china harvey because
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we've spoken a lot about china
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on this on this program and the motives
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and the goals of the chinese communist
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party wanting to overtake the united
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states
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as the number one superpower civil
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military fusion
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and how some chinese companies are very
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tied to the chinese military and that
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has led to the de-listing of some
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chinese companies
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the securities and exchange commission
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beginning to implement a law
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passed that would threaten to kick
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chinese companies off of u.s
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exchanges if they did not follow the
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auditing rules the sec says it's forcing
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accounting firms
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to be able to review financial audits of
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companies based overseas
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harvard you would think that all
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companies should follow the same rules
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and if you're listed in the united
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states you have to follow
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sarbanes-oxley the way every other
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company does
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what is your reaction to what's going on
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with regard to
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china and chinese listed companies i
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recognize this is a big growth story
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china is for american companies who want
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to sell to 1.4 billion people
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but are they also not focused
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on the risks here and the ties to a
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communist nation
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well i think there are um a lot of
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difficulties in maria one of the biggest
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problems is that the chinese
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government takes the position that audit
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work takers
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are confidential and
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cannot be released without
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appropriate approval from the government
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the pcaob which is the private sector
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overseer of audit work
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has attempted to work out arrangements
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with china
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and it has been unsuccessful
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and this goes back for quite a period of
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time
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the whole farm companies accountable act
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is
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the basis for the sec now adopting
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interim rules and the difficulty that i
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think
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arises is that without
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a government government um agreement
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the work is going to basically be
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very very difficult
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