david: this is my kitchen table and my filing system. i have been an investor. the highest calling of 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.

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

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 2000 five. 16 years later, those rules, are they really ready for the 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 price? 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. about our regular investors. we have seen an increase in retail participation.

the big institutions having efficient markets. are they getting best execution? we said you are supposed to get the best execution out of your brokers. there is very significant themes. sponsors generally take about 20%.

>> they took off in the last two years. there's been hundreds of them now. well over $100 billion raised through these fundamentally blank tech companies. what we are looking at is how we warn the public, not just in disclosure but also there's very significant fees that the sponsors generally take about 20% as a promote. they have two years to invest the money. they want to get that 20%. what sort of conflicts does that set up? what do diligence do they have as they are buying those companies? we are looking at how we can bring some greater exposure and transparency and deal with some of those inherent conflicts. david: something else that has arisen is gay medication. -- gamification. people are making a game out of

trying to buy stocks. do you have any worries about this phenomenon? gary: we live in a new digital age. applications on our phone can use massive amounts of data. now in this space, if they figure out by giving you a certain signal or color or prompt that you might trade more or you might buy a higher revenue product from them, there is an essential conflict.

what do we do when digital algorithms are maximizing for revenues? we are trying to think that through. it is a little bit more than that. there is a conflict between the app and our investment returns. ♪

♪ david: they are not subject to accounting oversight in the same way that american companies are. are you worried about that? is there anything you can do about that? gary: we are both baltimore boys.

we remember our senator in maryland for 30 years. paul and mike oxo can came together in 2002. president george w. bush worked with them on something called the act. there was another basic bargain. if you wanted to raise money from the public, you had to provide financials. your auditor had to be subject to inspection. basic bargain. nearly 20 years later, companies from 50 jurisdictions have allowed their books and records to be looked at. the auditors to be audited. two jurisdictions have not. china and hong kong. last year, congress said that enough is enough.

they said a three year clock in place. if we don't work this out, if the auditing firms of these china related companies don't open up their workpapers, that what congress said is, we have to suspend trading. these companies should not be able to access markets throughout our stock exchanges. david: the senator principal staff person drafting this was gary gensler. you know this pretty well. gary: there were others involved as well. i learned working for a senator, it was all there. if it went well, it was theirs. if it went pear-shaped, it was the staffs. i do know it. it was after enron failed. congress stepped into and said they had to change this and up their game, up the rigor with

regards to auditing in the united states. david: both of us are from baltimore. we did not know each other growing up. i'm 10 years older than you. you grew up in baltimore. were you in a very wealthy family? what kind of family was it? gary: neither of my parents went to college and my grand folks didn't even go to high school. my dad started a small business with his -- after world war ii. never had more than three dozen employees. it sent all of us to college. we lived a good life around this small business. david: you had four other siblings. one of them is your twin

brother. gary: i have an identical twin brother. watch out if he goes on tv. david: who is smarter? gary: rob is. david: you went to pikesville high school, a very well-known high school. i assume you are near the top of your class. he went to the university of pennsylvania for undergrad. gary: we both went to warden. he got in a little earlier than i. i was accepted. we were both mass kids. i was accepted to m.i.t.. my twin brother had gone toward our. i decided to go the same place. it worked out for me. i ended up at m.i.t. many years later. david: you graduated and then he went right to goldman sachs? gary: i joined a group called the merger and acquisition area. a group. it was throughout the 1980's.

david: you become one of the earliest partners? gary: i was honored to make it into the partnership while i was in the merger and acquisition area. david: you are making a great deal of money. why did you leave goldman sachs? gary: i spent 18 years there. i did a number of things. helped run part of the back office. it was really just a remarkable experience and opportunity. i felt some connection to public service, maybe as a kid there was a class treasurer and senior class president. i always had this connection. i felt public service was something, if i had the opportunity, i wanted to be part of. one of my mentors and bosses at

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 is 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 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? gary: they are both remarkable organizations. 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.

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 mit?

gary: when a president asks you to do something, it is really hard to say no. david: were youn

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 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

investment contract. congress painted with a very broad brush. they painted with a broad brush to protect the public from fraud when people were raising money from the public and the public is anticipating a profit based on those individuals raising the money. 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

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. 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.

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 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.

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 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. ♪ every day in business brings something new.

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♪ up up up up up up up up up up up up up -- host: a career in public service. the vietnam veteran turned activist who dedicated his life to serving his country. john kerry has a new mission, noting a consensus to tackle climate. mr. kerry: what i love about it is an issue -- is an issue everybody is seized by. people realize this has the potential to beat the future for a lot of people but it is