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tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  November 17, 2021 9:00pm-9:30pm EST

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david: this is my kitchen table and my filing system. i have been an investor. the highest calling of man time -- mankind is equity. and then i started interviewing. i have learned how leaders make it to the top. >> i said fine. i did not negotiate. david: i have something i would like to sell to you. and how they stay there.
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the current chairman of the fcc is gary gensler. he is a former partner at goldman sachs, former professor at m.i.t., and a well recognized expert in financial markets. i talked with him recently about some of the issues facing the sec and how to deal with new technologies affecting our markets. your main principle is fairness and disclosure and equity. everyone is treated the same. that is the principal. gary: we talk about a three-part mission. investor protection. facilitating capital formation. companies that are raising
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money. we are issuers as well. we are raising money. david: since the great market recession of 2008 and 2009, you would then head of the cftc, the markets have changed dramatically because of technology developments. do you think you have been able to keep up? gary: it is a real challenge. to stay up with the remarkable innovations. the last time we updated our rules for the stock markets was in 2000 five. 16 years later, those rules, are they really ready for the 20
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20's -- 2020s? they are a dark hole. i have asked my staff, what can we do to update these markets given their rapid change? david: let's talk about that particular change. you have said that the markets are supposed to be equitable and fair. so many of them are controlled by a limited number of market makers who may not give everyone the various price -- fairest pr ice? is that a big concern or immodest concern? gary: it is important for an agency like ours to constantly bring up to date our rules set. it is a central concern.
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we hear from advocates all across the market and all across
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the political spectrum. that helps our commission hear from the public. it is somebody who is buying their first 50 shares of stock in a company. my call lists are made public on a monthly basis some ceos get in touch. they want to say something. they don't have to necessarily agree. david: what would you like most people who are not knowledgeable about the sec to know about the sec? gary: markets work best when we
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have rules of the road. that they are free of fraud and manipulation. we are both baltimore boys.
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we remember our senator from maryland for over 30 years. he came together with a republican and with president george w. bush. there was another basic bargain. if you wanted to raise money from the public, you had to provide financials that were audited. and your auditor had to be subject to inspection. nearly 20 years later, companies from over 50 jurisdictions have allowed their books and records to be looked at. for the auditors to be audited. congress last year said annette is enough.
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let's put a three year clock in place. we have to suspend trading. david: you are too modest to point this out. you helped crafted. gary: there were others involved as well. it was after enron and worldcom fell. congress stepped in and said
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they had to up their game. david: both of us are from baltimore. we did not know each other growing up. i am 10 years older than you. were you in a very wealthy family? or was it a blue-collar family? gary: neither of my parents went to college. my dad started a small business after world war ii. it was a vending business. it sent all of us to college. they help pay down the mortgage over the years. we lived the good life around his small business. david: you have a twin brother. gary: i have an identical twin
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brother. watch out if he goes on tv. david: who is smarter, you are your twin brother? gary: my brother. david: you went to a well-known high school in that area. and you went to the university of pennsylvania undergrad. gary: we both went there. he had gotten in earlier than me . we were both kind of mass kids. i was excepted in mighty -- accepted to mit. it has worked out for me. david: so you graduated and went right to goldman sachs? gary: yes. i joined the merger and acquisition area. it was about a dozen people. it grew throughout the 1980's. david: you became one of the
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earliest players? gary: i was honored to make it into the partnership while i was in that area. david: you were making a great deal of money. why did you leave goldman sachs? gary: i spent 18 years there. i did a number of things. i went to the trading side. i helped run part of the back office. it was a remarkable experience and opportunity. i felt some connection to public service. as a kid who was the class treasurer. i always had this connection. i thought public service was something if i had the opportunity i wanted to be a part of. one of my mentors and bosses at
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goldman sachs had been chosen by president clinton to be a national academic advisor and later treasury secretary. he knew i would be a soft touch for service. when president clinton won a second term, an opportunity arose. i went down to the clinton treasury as an assistant secretary for financial markets and i have not looked back. it has been a terrific 24 years. david: after you left the clinton administration, did you decide to go back in the investment world? gary: the first thing i did along with a colleague from the treasury department's wrote a book. we thought of it is a common sense book on investing. it was promoting the use of long -- low-cost index funds for
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people who have their retirement savings. that was the first thing. then i started working on this accounting law. david: ultimately president obama is elected and he asks you to join him. gary: i had been working on senator clinton's campaign, the 2008 campaign, as a senior advisor. i was particularly honored that he reached out and gave me the opportunity to serve once again. david: we were going through a recession. you had to pick up a lot of pieces. was that a more challenging position than the one you have now? >> they are both remarkable organizations.
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it was set up to oversee commodity futures. it was expanded to energy products. even the s&p 500 stock futures. these derivative products and innovation. they were very similar to futures, another form of derivatives. in the middle of that crisis, swaps led to some of the instability in our market. working with some other people and congress across the aisle, we cobbled together reforms for this bond market. david: you had a very impressive career. at one point you had a tragedy, your wife passed away.
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you had to raise your three daughters essentially by yourself. how did you do all that? gary: i am not sure i did it all that well. we were off the grid. she was not about 30 when she first had cancer when we were dating. we were blessed to go on and get married and have three wonderful daughters. i was off the grid for a few years. pretty much a stay-at-home dad. david: have any of your daughters been influenced to go into financial services? gary: one is a remarkable artist on a political cartoonist, one has a phd in cultural anthropology, and the other is working in immigration law. david: why did you decide to leave in mighty --mit?
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gary: when a president asks you to do something, it is really hard to say no.
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david: were you interested in doing that time? why did you decide to leave mit? gary: when a president asks you to do something, it is really hard to say now. it was an incredible privilege and honor. i had been around capital markets my whole life. i was asked once again to serve. it is a hard thing to say no to. being a professor at mit is an
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incredible experience. the vibrancy of the student body, the faculty. even there i was studying the intersection of finance and technology. spending a fair amount of time on that intersection in the new integrations around fintech and artificial intelligence and cryptocurrency. david: let's talk about that. you taught about things. what is the sec doing about cryptocurrencies? are they a security or not a security? gary: it is clear that using this new technology to raise money. the public are anticipating the efforts. that brings it into an
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investment contract. congress painted with a very broad brush. to protect the public from fraud when people were raising money in the public and the public is anticipating the prophet -- profit. it depends on the facts and circumstances. it depends obviously on each individual token. many of these, maybe even the majority, are tokens raising money from the public. david: should we anticipate that you will have regulations clarifying with the sec is going to do on cryptocurrencies and related types of things in the near future? gary: i think it is pretty clear
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my predecessor said this more than once, that many of these tokens, what we have asked the trading and lending platforms and other various venues is to continue to work with us to get registered. if a platform has 50 or 500 tokens on their platform, the probability is that they're not all not securities. david: you were appointed by the president. you are headed in the been agency. if they have policies, do they call you up? gary: we work very closely with the treasury department and the other financial regulators. and the federal reserve.
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i am a member of the financial oversight committee. we are an independent agency where if we write a rule are due enforcement actions, we do not check in with the white house. congress wrote this law that way. there is a certain independence from that. david: so president biden is not calling you say good job? gary: i probably wouldn't want to disclose any of that. that would be a pretty unusual precedent. i know my predecessor may have played golf but that is not happening. david: how do you stay in shape? you look like you're pretty fit. gary: you are kind to say that.
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i have been a lifelong runner. that fateful decision to go to the university of pennsylvania, i ended up being a coxswain and i learned from my coach this incredible sense of it is important to think about our bodies. i still try to get out and run. i am not as good a runner as i once was. i have done a fair amount of what -- biking and mountain climbing. these are some of the things i tried to do. david: the pleasure of being the chairman of the sec, why do you enjoy doing this? it is a 24 hour day kind of job.
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you are always going to have critics. gary: everybody is going to find their passion. i was intrigued about finance. we got this gift of math and numbers. i always felt like what we could do to leave our world a better place. when we get to the end of our lives and look back, it is about family and loved ones and ends. can we leave the world a little bit better off? can we do something that is better for working families? for people starting out in their lives? and tips the scales a little bit in their favor for the folks in the middle. david: does your twin brother ever say you did a better job
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than he did? this he say you little lucky? does he say he was smarter than you? gary: he is a terrific friend and brother. he usually just says, go get them. ♪
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emily: jeff bezos shocked the world when he stepped down as ceo of amazon. less shocking was his choice for successor. and each as he was not only one of his longest tenured lieutenants but the architect of the cloud business, amazon web services. a moonshot that helps transform amazon into not just e-commerce but enterprise drug or not. he then needed to find his own successor, tapping a former colleague whoel


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