>> I GOT IT. >> ALL RIGHT. DALLAS. ALL RIGHT. MAYBE EVEN TO MORE SERIOUS THINGS THAN THAT, YOU'RE UP HERE TO TALK ABOUT SOMETHING THAT I THINK WE ALL WISH HAD HAPPENED A LONG TIME AGO, WHICH IS T-1, AND I THOUGHT YOU SHOULD EXPLAIN BECAUSE IT MEANS A LOT TO OUR VIEWERS WITHOUT THEM KNOWING IT. >> LOOK, THIS IS A REALLY GOOD THING. IF YOU SELL YOUR STOCK ON A MONDAY, YOU WILL GET YOUR CASH ON A TUESDAY. THAT'S THE EASIEST WAY TO THINK ABOUT IT. AND IN THE PAST, JUST A WEEK OR SO AGO, IT TOOK TWO DAYS. IF YOU SOLD YOUR STOCK ON A MONDAY, YOU GOT IT WEDNESDAY. SO, WE WORKED AT THE SECURITIES AND EXCHANGE COMMISSION ON A RULE TO SHORTEN THAT SETTLEMENT CYCLE, BECAUSE TODAY'S TECHNOLOGY ALLOWS THAT. BUT HERE'S THE INTERESTING THING. WE'RE JUST BACK TO WHERE WE WERE IN THE 1920s. THERE WAS ACTUALLY, IF YOU SOLD YOUR STOCK ON A MONDAY IN THE 1920s, YOU GOT YOUR CASH ON A TUESDAY. AND BECAUSE OF EVERYTHING GOING ON, THEY LENGTHENED IT ALL THE WAY TO A WEEK, AND WE'VE HAD TO SLOWWALK IT BACK. BUT EVERYBODY WORKED WELL TOGETHER. THE STOCK EXCHANGES, THE CUSTODIANS, THE CLEARINGHOUSES, AND THIS THING WORKED SMOOTHLY. MEXICO AND CANADA, ARGENTINA, JAMAICA, ALL JOINED US. I'M REALLY PROUD OF THE WORK OF THE S.E.C., BUT IT WAS A COLLABORATION ACROSS INDUSTRY. >> THE ONE THING I WORRY ABOUT IS I'M VERY CLOSE TO NVIDIA, AND NVIDIA CREATED ME, VERY EASILY, CREATED MY VOICE, MY FACE. >> SO, ARE YOU HUMAN OR JUST ARTIFICIAL INTELLIGENCE? >> WE WONDER SOMETIMES. >> DAVID, AM I HUMAN OR AM I -- >> IT'S UNCLEAR. YOU MAY BE A SIMULATION. >> I'M A DOLLAR SIGN REPRESENTED BY A MAN. >> THAT, WE KNOW. >> MR. MUSK ONCE SAID I WAS A SIMULATION, SO I CAN'T BE SURE. WHAT I THINK IS INTERESTING IS YOU ARE VERY WORRIED ABOUT A.I. AND THE POWER OF IT, AND I KNOW -- >> I WOULD SAY THIS. I THINK THAT ARTIFICIAL INTELLIGENCE IS THE MOST TRANSFORMATIVE TECHNOLOGY OF OUR TIME, AND I TALK ABOUT THE 1920s. THEN, IT WAS THE AUTOMOBILE, ELECTRIFICATION OF THE WHOLE ECONOMY. BUT NOW, WE'RE TAKING HUMAN DECISION-MAKING AND MORE AND MORE PUTTING IT IN THE BOX, IN THE ALGORITHM, SO I THINK THAT'S TRANSFORMATIVE. IT'S A GOOD THING FOR CAPITAL MARKETS, BUT IT'S ALSO RAISES REAL RISK, RISK OF CONFLICTS. WHAT IF THE ALGORITHM IS, IN ESSENCE, TRADING AGAINST YOU? RISK OF FRAUD. WHAT IF THE ALGORITHM IS TRYING TO DEFRAUD YOU OR MISLEAD YOU? AND ALSO RISK, IF WE'RE ALL RELIANT ON ONE OR TWO MODELS, THEN THE WHOLE CAPITAL MARKETS MIGHT BASICALLY, YOU KNOW, DRIVE OFF THE CLIFF TOGETHER. >> BUT YOU'RE AWARE OF THAT, AND YOU CAN PROTECT US. >> JIM, FRAUD IS FRAUD. SOMEBODY SHOULDN'T BE DOING FRAUD, BUT THESE ARE MORE DIFFICULT CHALLENGES, MORE REAL CHALLENGES, AND THE CONFLICTS ARE REAL TOO. >> OKAY, WELL, LET'S SAY -- LET'S TRY TO FIGURE OUT WHAT FRAUD IS FRAUD. LET'S SAY I BUY A LOT OF CONTRACTS. RANDOM STOCK. I BUY CONTRACTS, OPTIONS ON GAMESTOP. I THEN PUBLISH -- >> THIS IS A HYPOTHETICAL? >> TOTALLY HYPOTHETICAL, BECAUSE I DON'T WANT TO -- I DON'T WANT TO REALLY TRY TO HURT ANYBODY. >> WHY NOT? CAN'T WE JUST ASK ABOUT ROARING KITTY? WHY WOULDN'T WE? >> YOU ASK ABOUT A SPECIFIC THING, I WANT TO TALK TO YOUR VIEWERS FOR A SECOND. THE S.E.C. RUNS A CIVIL LAW ENFORCEMENT AGENCY. WE'RE A COP ON THE BEAT, AND YOU WOULD EXPECT US TO INVESTIGATE WHERE WE INVESTIGATE, BUT WE DON'T TALK ABOUT IT PUBLICLY, BECAUSE WE FOLLOW THE FACTS AND THE LAW, AND ONLY IF WE THINK THERE'S SOMETHING TO BRING IN FRONT OF A COURT DO WE THEN TALK ABOUT IT PUBLICLY. >> HENCE A HYPOTHETICAL. >> UNDERSTOOD. >> LET'S SAY WE'RE -- YOU'RE PAUL, MY LAWYER. I SAY, I WANT TO PUT UP A CRYPTOGRAM, AND IT'S OF A CHAIR LEANING UP, WHICH WE KNOW FROM VIDEO GAME PLAYING MEANS, COME ON, THIS IS THE NINTH INNING, GET READY. AND WE KNOW THAT I'M A PERSON WHO HAPPENS TO LIKE THE STOCK OF GAMESTOP. THIS IS THE SIGNAL. COME ON, GET READY. IS THIS SOMETHING, HYPOTHETICALLY, THAT IS THE -- THAT THE S.E.C. SHOULD WORRY ABOUT? >> LOOK, AGAIN, IT'S NOT SO HYPOTHETICAL, BECAUSE YOU'RE DESCRIBING THINGS THAT ARE IN THE PUBLIC DOMAIN, AND IN THE PUBLIC -- AND THE PUBLIC IS, YOU KNOW, INTERESTED IN. SO SH-- BUT GENERALLY SPEAKING, YOU HAVE TO MAKE SURE THAT YOU DON'T MISLEAD THE PUBLIC AND THAT YOU DON'T, IN ANY WAY, DO THINGS IN THE MARKETS THAT MAY BE MANIPULATIVE OR MISLEADING, AND SO THAT'S THE KEY THING IN OUR CAPITAL MARKETS. >> NO, THE KEY THING IS IF YOU CAN CURE IT WITH DISCLOSURE. THIS IS BRANDEIS. YOU KNOW IF THEY DISCLOSE IT, THIS IS SOMETHING THAT THEY -- A CALL TO ACTION, THEN YOU CAN'T GO AFTER THEM. >> DISCLOSURE IS ONE REALLY KEY PART OF OUR CAPITAL MARKETS. WHEN YOU BUY THE STOCK OF A COMPANY YOU EXPECT THAT THEY GIVE YOU FULL AND FAIR DISCLOSURE. THAT'S, BY THE WAY, NOT WHAT YOU'RE GETTING RIGHT NOW IN THIS CRYPTO FIELD. SO, I JUST, YOU KNOW, CAUTIONARY TALE THERE. THAT DISCLOSURE. BUT DISCLOSURE DOESN'T NECESSARILY PROTECT A BAD ACTOR IF THEY'RE MANIPULATING A MARKET. YOU CAN'T JUST SIMPLY DISCLOSE THAT AWAY. YOU'RE MISLEADING THE PUBLIC. >> NOT CURED. DISCLOSURE, NOT CURE. VERY GOOD. >> CAN I ASK A BROADER QUESTION ABOUT THE PUBLIC MARKETS? IT COMES UP A LOT NOW, IN PARTICULAR SOMETIMES FROM THOSE THAT ARE VERY ACTIVE IN THESE VERY LARGE PRIVATE MARKETS, BUT THE IDEA THAT OUR PUBLIC MARKETS ARE BROKEN, THAT WE HAVE SEVEN COMPANIES THAT REPRESENT 30-PLUS PERCENT, FOR EXAMPLE, OF THE MARKET CAP. THAT WE HAVE FAR FEWER PUBLIC COMPANIES THAN WE DID 10 OR 20 YEARS AGO. I'M CURIOUS HOW YOU THINK ABOUT THAT, AND WHETHER YOU AGREE OR DISAGREE WITH THOSE WHO WOULD ARGUE THAT THE PUBLIC MARKETS DON'T WORK THE WAY THEY SHOULD. >> I THINK -- I BELIEVE DEEPLY IN COMPETITION, AND WE IN THE U.S. BENEFIT FROM VERY LARGE CAPITAL MARKETS, WHICH ARE FIVE TIMES OUR BANKING SYSTEM. $23 TRILLION BANKING SYSTEM, $110 TRILLION PLUS CAPITAL MARKETS. NOT EUROPE, NOT ASIA. THAT COMPETITION. BUT I ALSO BELIEVE IN COMPETITION BETWEEN PUBLIC MARKETS AND PRIVATE MARKETS. MAYBE IT'S BECAUSE MY DAD HAD A SMALL BUSINESS OF 30 PEOPLE. MAYBE IT'S BECAUSE I DID WORK AT GOLDMAN-SACHS, THAT WHEN I WAS THERE, AND JIM, YOU WERE THERE. >> YEAH. >> YOU WERE ON A DIFFERENT FLOOR. >> I WAS ON A DIFFERENT FLOOR. I WAS ON A BETTER FLOOR. HIGHER PAY. >> DON'T LOSE TRACK. >> I REALLY DO THINK THAT PUBLIC AND PRIVATE CAN COMPETE WITH EACH OTHER AND BENEFIT THE AMERICAN PUBLIC. THE KEY IS TO MAKE SURE THAT THERE ARE STANDARD RULES THAT PEOPLE GET THE PROPER DISCLOSURE IF YOU'RE INVESTING IN SOMETHING, THAT BASIC BARGAIN, THEY GET FULL AND COMPLETE INFORMATION ON MATERIAL ASPECTS OF THE COMPANIES. BUT ALSO THAT THE CAPITAL MARKETS LIKE THIS HERE, ARE OPERATING FREE OF FRAUD AND MANIPULATION. >> BUT WHAT ABOUT THE PRIVATE CREDIT MARKETS? I MEAN, THEY'VE GROWN ENORMOUSLY, FOR EXAMPLE. THERE IS, YOU COULD ARGUE, A LACK OF TRANSPARENCY, BUT THAT MAY GO ALONG WITH IT, BECAUSE YOU HAVE TYPICALLY A CONTRACT BETWEEN ONE BORROWER AND ONE LENDER. >> BUT THERE, WHAT WE HAVE IS WE HAVE COMPETITION BETWEEN PRIVATE PROVISION OF CREDIT AND THE BANKS, AND GENERALLY, THAT'S A COMPETITION THAT WE, YOU KNOW, PROMOTE. NOW, AT THE SAME TIME, DO WE HAVE TO MAKE SURE THE INVESTORS IN THOSE PRIVATE CREDIT FUNDS ARE GETTING, YOU KNOW, THE DISCLOSURE THEY NEED AND THEY'RE NOT GETTING MISLED AND SO FORTH? >> YOU HAVE A REALLY ACTIVE FOLLOWING ON SOCIAL MEDIA. YOU POSTED YESTERDAY YOU'D BE ON. TONS OF REPLIES. >> DID IT HELP YOUR VIEWERSHIP? >> WE'LL SEE. >> THAT'S WHY WE'RE TALKING. >> THE TWO ISSUES THAT I SAW THEY WANTED TO LEARN MOST ABOUT WAS THE TIMING OF THE ETHEREUM ETF APPROVAL AND -- >> I THINK THAT HAPPENED A WEEK AND A HALF AGO. >> YES, YES. AND WHAT PRESSURES YOU FELT TO MAKE THAT HAPPEN. AND SECOND WOULD BE, TRADING PATTERNS AMONG MEMBERS OF CONGRESS. CAN YOU TALK ABOUT THE TWO? >> WE HAVE, IN THE U.S., ALREADY, A WAY THAT YOU CAN INVEST IN VARIOUS UNDERLYING SECURITIES AND UNDERLYING COMMODITIES CALLED EXCHANGE TRADED PRODUCTS. IN JANUARY, WE APPROVED AN EXCHANGE TRADED PRODUCT ON BITCOIN. AND ABOUT A WEEK AND A HALF AGO, SIMILAR FILINGS TO LIST ON THE NEW YORK STOCK EXCHANGE, LIST ON NASDAQ AND THE LIKE, EXCHANGE TRADED PRODUCTS ON ETHEREUM. ETHEREUM HAD BEEN TRADED ON THE CHICAGO MERCANTILE EXCHANGE, FUTURES, FOR THREE-PLUS YEARS, AND THE STAFF LOOKED AT THAT CLOSELY, AND THAT WAS APPROVED. NOW, THE UNDERLYING EXCHANGE TRADED PRODUCTS STILL NEED TO GO THROUGH A PROCESS TO HAVE THE DISCLOSURE ABOUT THAT. THAT WILL TAKE SOME TIME, BUT THEY'RE WORKING ON THAT RIGHT NOW. >> HOW ABOUT CONGRESSIONAL TRADING? >> WELL, LOOK, EVERYBODY IN THE MARKETS, 330 MILLION AMERICANS, SHOULD UNDERSTAND THAT THEY HAVE TO PLAY BY THE RULES OF OUR CAPITAL MARKETS, AND ONE OF THOSE THINGS IS THAT WHEN YOU TRADE, YOU DON'T TRADE ON WHAT'S CALLED INSIDE INFORMATION. INFORMATION FROM A COMPANY THAT HAS NOT MADE DISCLOSED TO EVERYBODY ELSE. BUT THE SAME RULES APPLY TO ALL OF THIS TO MAKE SURE THAT WE DO RIGHT BY THE LAW. >> SO, WE COULD CONCEIVABLY INVESTIGATE SOMEONE FOR INSIDE INFORMATION WHO'S IN CONGRESS? >> WELL, HISTORICALLY, THAT HAS HAPPENED IN THE PAST. >> OKAY. NOW, POLKA DOT, CORDANA, COSMOS, IMMUTABLE, OSMOSIS, SUSHI SWAP, MY NEIGHBOR ALICE HAVE ALL TRADED MILLIONS, I'M TALKING ABOUT MILLIONS OF DOLLARS THIS VERY MORNING. SHOULD WE HAVE A SUSHI SWAP ETF? THE PROPRIETARY KIND? I WOULD THINK THAT BONK IS A NATURAL, AND OSMOSIS, THESE ARE TRADING -- GARY, THESE ARE MILLIONS OF DOLLARS, THESE THINGS ARE TRADING. SHOULDN'T WE HAVE IT -- SHOULDN'T WE HAVE SOME SORT OF PRODUCT? >> LET ME SAY SOMETHING MORE BROADLY ABOUT THE CRYPTO MARKETS. RIGHT NOW, WITHOUT PREJUDGING ANYONE, THESE TOKENS, WHETHER THEY'RE THE ONES JIM LISTED OR OTHER TOKENS, HAVE NOT GIVEN YOU THE DISCLOSURES THAT YOU NOT ONLY NEED TO MAKE YOUR INVESTMENT DECISIONS BUT ALSO THAT ARE REQUIRED BY THE LAW. IT'S A BASIC CONCEPT IN OUR SECURITIES MARKET. WE, THE S.E.C., TOMORROW, ARE TURNING 90. HAPPY BIRTHDAY, S.E.C. 90. AND WHAT PRESIDENT ROOSEVELT DID IS CREATED THIS COMMISSION TO OVERSEE THAT YOU, THE INVESTORS, GET DISCLOSURE, AND IN THE CRYPTO MARKETS, THEY AREN'T GIVING YOU THAT DISCLOSURE, AND SECONDLY, THAT EXCHANGES LIKE HERE, THIS FLOOR OF THE NEW YORK STOCK EXCHANGE, GET PROPERLY REGULATED TO PROTECT AGAINST FRAUD AND MANIPULATION, AND THEY DON'T TRADE AGAINST YOU. AND THESE CRYPTO EXCHANGES, JIM, ARE DOING THINGS WE WOULD NEVER ALLOW THIS NEW YORK STOCK EXCHANGE TO DO. OUR LAWS DON'T ALLOW YOU TO TRADE AGAINST YOUR CUSTOMERS. AND SO, YOU'VE SEEN THE BANKRUPTCIES IN THIS SPACE, AND THERE ARE SOME OF THE MOST LEADING LIGHTS IN THIS FIELD ARE EITHER IN JAIL, ABOUT TO GO TO JAIL, OR WAITING EXTRADITION. >> OKAY, THAT'S A SUBOPTIMAL SITUATION FOR THEM, BUT I'M LOOKING AT THE -- >> BUT IT'S A SUBOPTIMAL SITUATION FOR INVESTORS. YOU'RE INVESTING IN A FIELD RIGHT NOW THAT YOU'RE NOT GETTING THE PROPER DISCLOSURE. >> AGREE. THERE'S SECURITIES FOR PEOPLE ACTUALLY I KNOW. I MEAN, THEIR NAMES. AND THERE'S NOTHING -- YOU KNOW THAT TOO. >> IT'S FUNNY. >> I MEAN, SOME PEOPLE EVEN IN THIS ROOM HAVE THEIR NAMES ATTACHED TO A COIN FOR NO REASON. MAKES NO SENSE. >> I'M SORRY, YOU GUYS HAVE COINS? >> NO, WE DO NOT. >> THERE'S A CRAMER COIN? >> THERE SHOULD, BUT THERE ISN'T. >> I HOPE IT'S PROPERLY REGISTERED. >> I WASN'T GOING TO BRING IT UP BECAUSE NOW IT'S A PUMP AND DUMP. CRAMER COIN. >> CHAIR GENSLER, WE HAVE ONLY A LITTLE BIT OF TIME. >> THE S.E.C. VERSUS RIPPLE LABS. >> DAVE, WHAT DO YOU WANT TO ASK? >> I GOT THE FLOOR. >> THANKS. >> WHAT I WANT TO ASK IS, I USED TO TEXT A LOT OF MY SOURCES, AND NOW THEY SAY, PLEASE DON'T TEXT ME AT THAT NUMBER BECAUSE WE'VE ALREADY BEEN FINE D BY THE S.E.. IT'S THE USE OF PERSONAL DEVICES FOR WORK. MANY DESCRIBE IT AS A MONEY GRAB. IT'S TENS OF MILLIONS IN FINES YOU GUYS HAVELEVELED AT THIS POINT. >> IT'S ACTUALLY SOMETHING QUITE DIFFERENT, DAVE. >> IT FRUSTRATES A LOT OF PEOPLE WHO SAY, COME ON, THIS IS RIDICULOUS. ESPECIALLY DURING COVID. HOW COULD YOU HAVE EXPECTED US NOT TO USE OUR PERSONAL DEVICES FOR SOME WORK? >> DAVE, IT'S VERY SIMPLE. FOR THE S.E.C., FOR YOUR COP ON THE BEAT TO DO ITS JOB, COMPANIES NEED TO KEEP PROPER BOOKS AND RECORDS, AND THIS GOES BACK TO THE 1930s. THIS IS NOT A NEW THING. AND WHEN BANKS OR BROKERS, INVESTMENT ADVISORS ARE NOT KEEPING THOSE BOOKS AND RECORDS PROPERLY, THEN WE CAN'T BE THAT PROPER COP ON THE BEAT, BUT WHAT'S MORE, THE BROKER-DEALER CAN'T ACTUALLY MANAGE ITS RISK. IT CAN'T PROPERLY MANAGE ITS RISK. SO, EVEN WHEN I WAS ON THE WALL STREET, AND JIM AND I WERE BOTH AT GOLDMAN-SACHS, WE KNEW THAT THEY ACTUALLY RECORDED THE PHONE CALLS, YOU KNOW, AND THEY KEPT THE BOOKS AND RECORDS. THAT'S WHAT THIS IS. AND WE FOUND A LOT OF THE BIG BROKER-DEALERS AND BANKS WERE NOT DOING THAT. THEY WERE DOING OFF-CHANNEL COMMUNICATIONS, AND I'LL TELL YOU THIS. WHEN I WAS AT -- IN THE SERVED PRESIDENT OBAMA OVER AT THE COMMODITY FUTURES TRADING COMMISSION, ONE OF THE BIG THINGS THAT WE
