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Welcome to today's episode, where we continue the topic of unprecedented power and influence. In our last episode, we revealed a rogue program called Operation Chokepoint. Today we will reveal how the Securities and Exchange Commission is using its might against the cryptocurrency sector with unprecedented enforcement actions including lawsuits and regulations that appear to be overstepping the scope of its agency.
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Welcome to today's episode, where we continue the topic of unprecedented power and influence. In our last episode, we revealed a rogue program called Operation Chokepoint. Today we will reveal how the Securities and Exchange Commission is using its might against the cryptocurrency sector with unprecedented enforcement actions including lawsuits and regulations that appear to be overstepping the scope of its agency.
Listen to EP07 | Beyond The Brink | The Gensler Hearing | 04/24/23 by VidaBroadcast MP3 song. EP07 | Beyond The Brink | The Gensler Hearing | 04/24/23 song from VidaBroadcast is available on Audio.com. The duration of song is 59:51. This high-quality MP3 track has 110.869 kbps bitrate and was uploaded on 25 Apr 2023. Stream and download EP07 | Beyond The Brink | The Gensler Hearing | 04/24/23 by VidaBroadcast for free on Audio.com – your ultimate destination for MP3 music.
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The VEDA Broadcast Network hosts a show called Beyond the Brink, which discusses global events pushing people to their limits. In a recent episode, they discussed the unprecedented power and influence of agencies like the Department of Justice and the Securities and Exchange Commission. They highlighted how these agencies have targeted businesses and banks, causing financial system breakdowns. They also questioned the actions of SEC Chairman Gary Gensler and his lack of transparency. Representatives from the House Financial Services Committee expressed concerns about the SEC's enforcement actions and the impact on innovation and American competitiveness. They asked for more clarity and analysis from the SEC. Overall, the show emphasized the need for regulatory clarity and the importance of congressional oversight. You're listening to the VEDA Broadcast Network, discussions that matter. Thank you for listening. The shows on the VEDA Broadcast Network are those of the host, guest, and callers only and do not necessarily reflect those of the staff, management, or advertisers of VEDA Media or the VEDA Broadcast Network. Well, what's pushing you to your limits? Welcome to Beyond the Brink. This show focuses on global events that are pushing people to their limits and driving them to the brink of change. My name's Christy, and I'm here with Melissa, and we've got a great show in store for you today, at least we think it is. If you missed our previous episodes, you can find them at VEDABroadcastNetwork.com, and you can also find us on a number of social media channels, such as YouTube, Rumble, Twitter, Facebook, Audio.com, Spotify, all at the sign at VEDABroadcast. That's at VEDABroadcast. So we want to welcome you to today's episode, where we continue the topic of unprecedented power and influence. It's unbelievable. In our last episode, we revealed a rogue program called Operation Choke Point, and that originated in the Obama administration's Department of Justice, where legitimate businesses, such as payday loan companies and gun dealers, were targeted by the Department of Justice, and they became unbanked. And most recently, cryptocurrency-friendly banks were targeted, contributing to their collapse and creating a near financial system breakdown, and it put the whole system at risk. Today, we'll reveal how another agency, specifically the Securities and Exchange Commission, is using its might against the cryptocurrency sector with unprecedented enforcement actions, including lawsuits and regulation, that appears to be overstepping the scope of its agency's mandates. So we'll see, and as we begin, let's hear from a word from one of our affiliate sponsors. Beyond the Brink has partnered with Swan Bitcoin. We chose Swan Bitcoin because it's easy and inexpensive and the best form of financial protection if you're hit with a disaster. It's perfect for both new and experienced Bitcoiners. Set up a Bitcoin savings plan and never miss out on the dips. Get a free book called Inventing Bitcoin, the technology behind the first truly scarce and decentralized money, and receive $10 of Bitcoin when you use our affiliate link, VidaBroadcastNetwork.com forward slash beyond. That's VidaBroadcastNetwork.com forward slash beyond. And, you know, I never seem to miss the opportunity to trip over that address. So let's bring in Melissa, and she's going to take it away. She's got she's done quite a bit of homework on this, and I'm really excited for what she's going to be sharing with us today. So, Melissa, take it away. I am so excited. Well, I'm excited and not excited about this topic today. You're excited, not excited? I'm excited. I am excited to share with everyone the things that I've learned and just kind of share a bunch of clips. We have a lot of clips to show. So on Tuesday, the 18th of April, the Committee on Financial Services, they held a hearing titled Oversight of the Securities and Exchange Commission. Many of you might be familiar with Gary Gensler, who is the SEC chairman. And this was his first appearance before the House Financial Services Committee since this new Congress took over. In fact, it's been over a year, I think they even said 18 months, since he's been questioned by this Financial Services Committee. How ironic. I mean, for somebody to be in such a powerful position, where have you been? If you've been following this space at all, he has been doing a lot of stuff that's not so cool. So it was nice to finally hear some question-and-answer session, although you'll see in the clips when I get to them. Many of us folks in the digital assets space initially were excited when Gary came on the scene, because he had taught a series of courses at MIT surrounding cryptocurrency and blockchain. And so we expected that he'd bring this knowledge that he has surrounding this space, and he would be a champion for, you know, provide some informed clarity, and that would provide necessary regulatory clarity without injury to this new asset class. And unfortunately, so far, that's not been the case. And if you don't mind me jumping in here, he does have some history, which will bring all of this home to this whole series of videos that we've been doing about unprecedented power and influence. When he goes way back to working in previous administrations to where I think that once you see these clips, things are going to start coming together, especially with the notion of him working in the Hillary Clinton campaign in 2016 and having something to do with, you know, that Russia hoax thing. Anyway, as I digress, let me don't get off track here. I just wanted to throw that in there. Oh, that's an important thing to note. So we noticed and we realized that there's a lot of channels and the media covered some of these clips that came from this hearing. But if you think you saw everything, don't blow this video off just yet, because we're going to share with you a bunch of clips that you most likely didn't see and try to kind of expand a little bit on what some of these things, because words matter. Remember, words matter always. So I just want to say I watched like the full, I think it was like four and a half hours. It was long. I know, you did too. And so we painstakingly cut out clips that we think you'll appreciate and hopefully learn from. And, you know, some of these representatives you may know, but some of them you might not know. Some of them I wasn't very familiar with. So we'll see what happens. Let's see. And the other thing is, is hopefully some of these clips will provoke you to want to learn more and dive in a little bit more on your own. So what we'll do is, for those of you listening on the radio, if you go to our website, VidaBroadcastNetwork.com, we'll have our links to our Rumble and YouTube videos. You can choose the platform you want to watch it. And we'll put some extra material in the description box for you to follow along or research this for yourself. So in any event, let's go and let's see how Melissa does with sharing clips. So Representative Patrick McHenry started off the hearing telling Gary, your approach is driving innovation overseas and endangering American competitiveness. And so I'm going to share this clip. Let's see here. I got, I think it's one of my screen ones. There we go. And I'm going to do this, share my screen. All right. Hopefully you can see that. Looks good. To get through a lot today. So let's get started with digital assets. Under your leadership, this year's Exchange Commission has brought nearly 50 separate enforcement actions against digital asset firms. And now your agency is requesting an additional $78 million to expand your enforcement agenda. At the same time, you've refused to provide clarity on whether digital assets offered as part of an investment contract are subject to securities laws. And more importantly, how these firms should comply with those laws. You're punishing digital asset firms for allegedly not adhering to the law when they don't know it will apply to them. It's nonsensical. The administration said it. The Fed has said it. And I'll say it again. Congress must provide clear rules of the road for the digital asset ecosystem because the regulators cannot agree. Regulation by enforcement is not sufficient nor sustainable. Your approach is driving innovation overseas and endangering American competitiveness. The ranking member and I. Okay. So I wasn't sure if you could hear that. Yeah, it was good. It was a little bit on the low side, but I think if you just toggle the volume, it would be okay. It's not bad. Okay. All right. So basically, that was the, you know, your approach is driving innovation overseas and endangering American competitiveness. And then we went into, I don't know what's happening here. Well, it's true if you're reading the latest articles about that. Look at Circle, for instance. They're looking to take their company out of the United States. I think they're trying to find a location in Singapore right now. Mm-hmm. Mm-hmm. Yeah, and that is what a few of these guys, they brought that subject up. And hopefully I can get this up. So this next clip that I have, I have actually three clips from Representative Bill Huizenga. And he's expressing concerns over the response that he received by Gary Gensler, basically telling him that the response that they got back was the same thing that they sent with the inquiry. So I thought this was pretty interesting, and I'm going to share my screen again. On the rule. You sent us a copy of the rule itself, twice. You sent a copy of your testimony the last time you appeared before this committee. You sent us a copy of your public calendar. You sent us copies of public speeches, testimony, and press releases from you and your fellow commissioners. You sent us a copy of a public FSOC report from 2021. And the most interesting and, frankly, dumbest example of this that we received to date is a copy of a letter that myself and Chairman McHenry sent you congratulating you as being confirmed as chair in 2021. I have that one in my file already. So, frankly, it's insufficient and, frankly, unacceptable what has been going on. I think it's an embarrassment to you and to your team that you sent me a copy of the letter I sent you as and then tried to call that responsive. That doesn't really make a whole lot of sense. And further, your response letter to the chairman and myself, the SEC staff admitted that the proposed rule, quote, could increase costs, quote, close quote, related to energy prices under certain circumstances, but you provided no analysis. The actual information that we were looking for, not my letter to you congratulating you as becoming chair, we wanted the analysis on how the commission determined that. Did the SEC conduct an analysis of how this new climate disclosure regime could change energy prices before publishing the proposal? You're pointing it at me. And the most interesting. Darn it. Yeah. Did they do an analysis or not? You know, that just screams stonewalling. I'm just here because I have to fulfill my role. We have now a different, we have different leadership now in these oversight committees. And I'm just basically here, but I'm not going to tell you anything. Well, how ridiculous is it to, and frustrating, you send a request for information, and they send you all of the stuff back that you sent them as the response to your question. That's just insulting. And you're making, it is, it's giving them the finger, basically, in my opinion. And then, you know, you're going to be making these kinds of decisions. The American people deserve to know what you're basing these opinions on and how you're making these policies. Where's the analysis? And why didn't you send it? I think the key part there, Melissa, they don't care what the American people think about. No. They don't care. They're going to do their own agenda. Yep. Yep. Well, let's see what Gary has to say about the analysis. Okay. So you did do an analysis, all right? Because it looks like it may have relied mostly on public comments to form your cost benefit analysis. I just want to make sure I, for the record, I didn't, we did an analysis with regard to the cost. It's technically the efficiency competition and capital formation analysis that we put, and it's out there in the public domain, and we've gotten feedback on that. We're not a climate regulator. Amen to that. We understand that. So did you rely on any internal economic data or assessment to inform your cost benefit analysis? In other words, did you, the SEC, perform any of that cost benefit analysis internally? So the SEC looked at, I think, over 6,000 public registration statements. So that's a yes? Yes. There's a lot of analysis, and that is summarized and put out to public comment. All right. And I would like to see those documents provided immediately. Are you willing to do that then? I'm a firm believer in congressional oversight. I know that I'm not. Yes or no? You previously requested, and you sent me a copy of the letter that I sent to you congratulating you. So it sounds like we now have an understanding that you're going to actually send us your analysis. So I know that the yes or no? How ridiculous. Yes. You know, another takeaway in there is they're not a climate regulator. Yeah, they support the companies that do ESG. Right? Yep. Yep. So basically, we're going to find out whether Gary is – it doesn't sound like Gary is going to send the analysis, really. At least that's the way that this representative took it. By the way, this is my representative. I didn't even know this guy existed, to be honest with you. But I like his tenacity, and, you know, and actually I think it's pretty cool that he's thinking about these things. That gives me some hope for the state of Michigan because we're kind of feeling a little crazy down here. So he's going to – in this next clip following up, he kind of moves on to FTX. And so I found this a little quite interesting also. So let's see what that is. To date, 213 pages of those publicly available documents have produced, and guess what? They didn't give us anything surrounding the charges filed against Sam Bankman-Freed. On April 12, Chair McHenry and I sent you a follow-up letter, and we're led to believe that the staff recommendation memo presented to the commission for a vote on charges against Sam Bankman-Freed exists. Is that true? Is there a memo from the staff recommending to the commission the charges that Sam Bankman-Freed was ultimately charged with? Under standard practice, our commission receives action memos from the staff whenever – So it does exist? We work on – So it does exist? Okay, well, you haven't sent that to us. Your staff has, frankly, told us that it exists, yet you have not sent it. Why not? When we conduct an investigation, we are obliged to keep investigative matters confidential. So don't – hold on a second. Hold who who? Then it sounds like I need to send letters to the DOJ and not to the SEC about the SEC charges. So we'll be following up with this after this. My time has expired. Oh, my goodness. You know, let's not mention the numerous times that Sam Bankman-Freed had met with Gary Gensler directly. And Maxine Waters. And Maxine Waters. Maxine Waters loved him. She was just gushing over him. It was almost disgusting. And, you know, so the thing that I didn't realize – so what he's saying here is the SEC staff, they wrote a letter. You know how they're – in some of these other things where it's like a bunch of judges wrote a letter to, you know, we want this person. We don't – Right. Same kind of deal. And apparently the SEC staff did recommend charges for Bankman-Freed. Not Freed. Freed, I like to say. But for some reason, you know, why isn't Gary sharing that with the Oversight Committee? Because there's a payoff in the works. It's very – I said it. You did say it. You did say it. He just – he is so woven through for so many years. It doesn't surprise me that he taught at MIT. You know, a lot of – think about the people that came out of MIT, right? So the fact that he is the SEC chair and we're in the – he taught crypto courses and blockchain courses, and now we've got the stifled, you know, with the XRP ripple lawsuit and, you know, determining winners and losers. They give the free pass to the Ethereum, but they're stifling others. And it just shouldn't be that way, you know? I don't think they mess with Bitcoin because I don't think they can't, right? But Ethereum, all the friends, all the bankers and stuff, I think they've had a little honeypot deal with this Ethereum thing. They can't mess with Bitcoin because nobody runs Bitcoin. Nobody owns – I mean, a lot of people own the Bitcoin, but nobody owns the system. Yep. Nobody owns it and everybody owns it. That's why the Federal Reserve can't do anything about Bitcoin. Yeah. That's the beauty of it. I can't believe – it'll be cool when we're able to actually have a show and talk about that a little deeper. So this next clip, Gary was gifted a 30-second – free 30 seconds to talk about anything that he wanted and what did he choose to talk about. Just so happen, when we're talking about things getting set up or preplanned or whatever, and you know that he was – he was talking about the bank failures, okay, that we just discussed in our last show. And I just found it interesting what he chose to say. So hold on one second. Well, if I could just note something about – you mentioned you're hearing about the recent events in the markets. And I would note there were three banks that failed in those handful of days, those last – those four or five days. And two of those banks, the first and the third that failed, Silvergate and Signature, were engaged in the crypto business. I mean, some would say they were, you know, crypto banks. And the third, the biggest, Silicon Valley Bank, actually when it failed, you saw this country's – the world's second-leading stable coin had $3 billion involved there, DPEG. So it's interesting just how this was all – had some crypto narrative as well. Yeah. Thank you, Mr. Chairman. It wasn't that. It's the crypto narrative as well. Huh? Well, it has everything to do with the DPEG-ing because there was a run on the bank and stable coin is tied to the dollar. So what he didn't say is that it stabilized and found its peg because it was tied to other securities. Yeah. Or I should say probably derivatives are better – a better term than securities. Just scratch the word securities. Well, and not only that, the two banks that were really involved – and remember we said like part of them had – they got the green light, even the one that was dealing with the mortgages and they were supported, you know, supported with that and then they pulled out of it. And, you know, you created this problem. You guys created this problem. And so, you know, here he gets 30 seconds and he's like, I just wanted to point out that the banks that failed just so happened to have to do with crypto. Of course. You know, problem, reaction, solution. We're showing you people don't try to do anything for yourselves. Don't try to be self-sovereign and peer-to-peer and think for yourself because we are going to protect you. And look what happens when you don't listen to us. That's what I got from that. And isn't it interesting when you're trying to divert attention away from something that you're involved in that you call attention to it? Exactly. It's almost like it's intentional, you know. There are no coincidences. No. We've been doing this long enough to know there are no coincidences. None. Well, I'll tell you, this next clip, this is Representative Ann Wagner. And I must say, I personally think all these people are actors or they're playing a part in the big shoe, so to speak. And some of them are B actors at best. And while she is a bit annoying and over-animated, I'm really trying to give her some kudos because, I mean, who am I? Look at what I'm trying to do, you know. But she was a little bit over-animated and annoying. But she made some really good points and she asked some good questions. And so let's see what she is concerned about. It's just refreshing to have somebody talking about things that really matter. Thank you, Mr. Chairman. Chair Gensler, you've publicly stated that, and I quote, our markets are the finest in the world and that, quote, retail investors have greater access to markets than at any time in the past. Yet, despite these statements, which I wholeheartedly agree with, you still released four proposals last December, order competition, best regulation, best tax, tick size, rules 605, that completely upend those markets and make them from top to bottom. There is a strong possibility that these four proposals could make equity markets more costly, less efficient, and overall worse for retail investors. Throughout these proposals, the Commission admits over 100 times that it is uncertain of the impacts of the proposal and that it is unable to quantify or, quote, estimate the economic effects of the proposals. This uncertainty means that these proposals will likely make markets worse for retail investors. You may be willing to risk that, but members of Congress who represent these retail investors, as well as American businesses seeking to raise capital in our equity markets, are not, sir. If the SEC's client – Good day, sir. Reminds me of Willy Wonka, you know, good day, sir. She's exactly right. I mean, again, you're putting out these proposals and – but you don't have anything to back it and the things that you do have the – some of the information that you have, it's actually saying that it could potentially harm retail investors, or you don't really know. So what? We're just going to willy-nilly try to do some of these new proposals and then harm the retail? The retail investor? Who are the retail investors? We are. Yeah, and they're going back and referencing, you know, the most recent catastrophic collapse, which was in 2008, and there was a much lower percentage of a requirement to hold reserves, and it is like five times that now, so that either tells me that somebody is speculating and they're just tweaking, you know, just trying to make adjustments based on nothing, or there is a significant, severe risk that's out in front of us that nobody is telling us about. That's kind of the way I'm leaning, and I don't think, you know, the percentage that they're talking about is going to do anybody any good. It's not going to help anything, really. I mean, so many things are such a mess. Yes, it is. It's like they're intentionally trying to do things to blow it up even further. I think they're trying, yeah, they're doing things to blow it up, but I think they're also trying to do things to create the cover-up until something catastrophic happens so then they then have an excuse for why things blew up. Problem, reaction, solution. Yes, ma'am. Problem, reaction, solution. I sound like a broken record with it, but it's so true. And when you start paying attention to these things, you see it so clearly what they're doing. It's so manipulative. So before we move on, this next step I kind of want to talk about briefly. So Ms. Wagner starts asking about FINRA and the best execution rule and why Gary thinks that they need to have that rule at the SEC as well as at the FINRA level because SEC controls, they have the authority to change it at the FINRA level. So why create duplicate work? That's what she said, why. For those of you who don't know, FINRA is the Financial Industry Regulatory Authority, and she's referring to Rule 5310, which is the best execution rule. And I'm no expert by this, but I just did a little Googling, and it says this rule means that brokers must use reasonable diligence to ascertain the best market for their customers' orders and obtain the best price available at submission while also considering other factors such as the character of the market for the security and the size and type of transaction and the number of markets. And I will also post a link in the description box for anybody that wants to look into it a little bit further. But anyway, that's what she's talking about. She's talking about FINRA, and so let's play another clip from Ms. Wagner. Share my screen. I'm getting to become a pro at this, kind of. Let me change topics here. That the duty of best execution is too important for only FINRA to have a best execution rule and that the SEC should have one as well. I'd like a yes or no answer here, sir. Are you aware that there is a process under existing rules for the SEC to amend or change FINRA's rules, which would include its current best execution rule? Yes or no? Yes, I'm aware we have that authority. Yes or no? Do you believe FINRA is incapable of maintaining and enforcing an adequate best execution rule? I think this is an important rule that we should have at the commission level. Yes or no? Are they incapable of maintaining and enforcing an adequate best execution rule? Again, I think we should adopt one at our level as well, and we have it in other areas as well. All right. To explain my time, as proposed, it would be duplicative, onerous, and costly for firms to comply with both the SEC and now FINRA's best execution regulations at the same time. Chandler, your proposed rule on open-end fund liquidity would require funds to assume a worst-case scenario of a 10% sell-off on the fund when classifying the liquidity of assets. I have spoken with many asset managers who inform me a 10% run would be a magnitude higher than any that they have seen in recent history. One asset manager informed me that the highest run they have seen going back to the crash of 2008 was 2%. What historical data did you use to justify the 10%, and is it appropriate for the SEC to require funds to operate in a scenario that is five times worse than historical standards? Five times. Five times. Yes, that's what I was referring to earlier. I was probably a little ahead here, but that's true. So what are they? Either they're just putting in unjust regulations, which is just going to make the market more sluggish. It causes stagnation like what we had before in the 2008 cycle through 2017, I believe. It was very sluggish because there was too much regulation, and the regulations were unclear. Yes. And so here we are doing it again, and why do you have two agencies that are going to duplicate regulations? So does that make one agency doesn't have the oversight authority or the enforcement authority than the other one? Right. It's too much. It's too much. You're making them do it twice then. Right. So they have to satisfy this agency, then they have to satisfy this agency. There's cost and time and people that you have to hire to do – I mean, it's a lot, and you have to question. And, you know, I think if I recall, back before the crash, they had done a bunch of deregulation, right? They had done a bunch of – so now we're kind of doing the opposite. It's very interesting, but it's like they're comparing it to something that they also created. So I just find that very interesting, to say the least. Yes, and more red tape just equates to more fees. It's harder for the consumer. It's just going to pick their pocket because it always runs downhill. Well, you know what the other thing is, is that they're really trying to squeeze the little guy out. That's what's going to happen. So far as I can tell, they're trying to corner it all. You know, all these lawsuits they're bringing against these cryptocurrency firms and the exchanges and the banks and, you know, things they're doing. They're trying to scare them out of doing it, make it so that it's so expensive they can't win, or create such a problem that they collapse it and then they swoop in and buy it, right? Yep. So in any event, I wanted to share Gary's response to Ms. Wagner. This was just to define what is highly liquid, middle liquid, then illiquid. And so it's really a definition. What historical data did you use to come up with the 10 percent? Again, we lay that out in our proposals. No, you don't. But I'd be glad to follow up. You don't lay it out at all. Mr. Gensler, you have testified before this committee twice that both times I have asked you if you intended to rewrite Regulation Best Interest Reg BI, and you have said no. Is that still the case? That's still the case. We remain committed to supporting the continued implementation of Reg BI. Look at his face. What? We look to vigorously enforce it. What? Do you intend to rewrite Regulation Best Interest Reg BI? You said no in the past. Oh, I'm sorry. I misunderstood your question. It's not on our unified agenda. Great. Chair Gensler, out of the more than 50 rules proposed under your leadership, none appear to directly address capital formation. If you believe that one or more of these proposals directly addresses this crucial issue, please cite which ones and specifically how that standard is met. In 10 seconds. I think that many of them do because it's about issuers and investors. I would just take private funds. If private fund advisors, the general partners, are taking half a trillion dollars of fees a year, if it came down... I'd ask you to respond in writing and be very specific to your mandate. If times were worse than historical standards. Sorry. Yeah. What do you think about that? Yeah. No, we're not going to rewrite. Oh, no, no. I didn't understand the question. If you don't understand, then that can just be whatever it is, you know. I misspoke. Yeah. Well, I think this next one coming up is going to kind of answer that question. Yeah. So, this next clip is from Mr. Kasten. I hope I'm saying his last name right. And this also ties into some previous episodes that we covered. Does the climate change pose financial risk to investors, Mr. Kasten's asking. And everything's going that way, so it doesn't surprise me that this was one of the questions coming from this guy. Do you believe that climate change creates significant financial risks to corporations? I'm sorry. I didn't hear the word in there. Do you believe that climate change creates financial risks to corporations? It's really what investors are facing, their investment decisions. And what we found in public input is a significant number of investors managing tens of trillions of dollars of assets believe that it's important to their investment decisions. That's the standard we're held to. Well, let me maybe then sort of add a little color. In 2020, as you know, the CFTC said that climate change poses a major risk to the stability of the U.S. financial system. In 2021, FSOC said that climate change is an emerging threat. And recently, the IPCC said that within the range of possible temperature rises, global economic losses could amount to $23 trillion per year. Are these numbers material? They're significant to the economy. But what's material is that investors in public companies are today making decisions based on climate risk disclosures, and we're trying to bring some consistency to that. Is it your view that clear disclosures would help investors to hit? Now, you know what? He talks about investors, but they're corporate institutional investors. So these are investors who are managing large investment funds like pension plans, 401Ks, so that you and I, the consumer, who may have index funds or so forth, and part of a basket of funds that we're invested in under, I don't know, let's call it an A.G. Edwards or something like that. It's their institutional investors who are playing the ESG game. We've reported on this before. Now, if you ask the consumer if they want to have environmental and social justice issues be part of their investment decisions and they understand the ramifications of what that means, I would suggest to you that they're going to say, I think that you are just supposed to make the investments that are going to yield me the greatest amount of return for my investment without all of these other things, because I can do that on my own. I don't need that to be part of my investment portfolio. Thank you very much. Exactly. Yeah, they're definitely, and his answer is actually telling, because he's telling you that they're making the decisions based off of what those billions, the ones that are controlling that, not you, not us. They're not asking us. They're asking a handful of people. So they're taking our money, doing their social justice, environmental, Green New Deal incentives, or I should say programs, for lack of a better word, and using our monies to fund it, whether we agree to that or not. That's not what we signed up for when we contribute to a 401K or we're part of a pension plan, IRAs, anything else. That's just not what we signed up for. I'm really bummed because I, for some reason, I do not have this next clip, but I'm going to link it in the description box, and maybe I can add it later. But Mr. Kasten goes into, he talks about real estate being overvalued, and he gives some really important numbers, so I'm bummed I don't have the clip at my fingertips. And he's talking about information asymmetry, and it's the imbalance between two negotiating parties to their knowledge of relevant factors and details, where one side enjoys more information as a competitive advantage over the other party. The reason why I thought this was so important, and I'm just kicking myself that I don't have the clip, is because they're telling you what's going to happen, and that's what these people do. And so they might know that there's going to be a big flood that's projected, and insurance is not going to cover it or whatever, and so they go and they rug pull all these people. And people like you and I, we don't know what's happening, and then that's how they stay ahead. Well, if you can't see a real estate collapse coming, then I don't know, because this is the same routine. These happen in cycles, and the cycles just get more severe than the previous one, but we're already seeing it in the commercial market. If you just look in the news, there was one that just came out today talking about a Baltimore, Maryland mall that's completely shut down, whereas 10 years ago it was a thriving mall, and it had everything to do with the mismanagement of the elected officials. And we're seeing commercial real estate being impacted like that. Commercial real estate eventually affects retail real estate, residential real estate. It's all happening. My market, I know your market, you're starting to see these are not multiple offer situations. Prices are starting to adjust down. I haven't seen price reductions in years, and I'm starting to see them now, so it's happening. I would love to do a future show and have you tell what you know, because I think that is a valuable bunch of information for those of the audience that doesn't know. Give them a little bit of a heads up. It's actually to the point of kind of being too late if you're going to do anything. But in any event, it's something that people should know. It's going to be a black rock play is really what it's going to come down to. It just makes us all mad. All right. Oh, gosh. We're running out of time. This next one I thought was really good also. Mr. Barr, he's talking about a new staff accounting bulletin, number 121. And let me share that clip with everybody here. That's for five minutes. Chairman Gensler, I want to discuss staff accounting bulletin 121, which was issued last year by the SEC's Office of Chief Accountant. Staff 121 requires SEC registrants, including banks, to include on their balance sheets crypto assets that are custodied on behalf of their clients. Requiring banks to place custody digital assets on their balance is a shift, as Chairman Powell recently noted, in historical practice, as custody assets have always been treated as off-balance sheet. Staff 121 changed that, and I'm concerned about the consequences, because banks have capital liquidity and other prudential requirements that non-bank custodians do not have, meaning that banks cannot offer digital asset custody services at scale without significant balance sheet implications. If banks cannot provide digital asset custody services at scale, they simply will not offer those services, which could lead to market participants not having bank-grade custody solutions to pick from and will turn to offshore solutions, like in the Bahamas, diminishing American competitiveness and compromising investor protection. Chairman Gensler, has it occurred to you the irony that at the same time you pursued Staff 121, which has effectively precluded highly regulated banks from offering customers the safety and security of segregated digital asset custody services, not a single one of the 4,500 employees under your supervision at the SEC noticed that FTX was allowed to co-mingle customer funds, allowed FTX to trade, settle, custody, lend, and borrow digital assets without institutional-grade custody? I'm actually quite proud of the staff. He's so proud of them. How proud of them? Huh? It's just unbelievable. So my takeaway on that is that when you're doing custodial services of assets, it should not be on the balance sheet because those are just assets being held. It's kind of like in a safe deposit box. A bank is not going to put safe deposit box contents on their balance sheet. So if you're going to require banks to put custody, crypto custodial assets on their balance sheet, then how are they going to adjust for the ebbs and flows in the values of those assets? They're not doing that for contents in their safe deposit boxes. Right. So people want custodial services, which will help bring on adoption of this very important new asset class. It's our future asset class, the digital assets, and people want that. They're not comfortable doing self-custody. Many people are not. It concerns them. So this accomplishes a couple of things, and I don't know everything. I am going to post a link of this, what he's talking about, the bulletin number 121. Number one, you're preventing the banks from doing it right now, okay? Right. Making it impossible for them to do it. That could be because they don't want them to do it at all or because whoever's in control, they're not ready for this to happen. And so they're holding back banks that would be in a position to do it, and they're fired up and they're ready to go, okay? They're holding back them from doing that, and that's pushing people to go overseas and do it, and it's pushing people to do things in a manner that is not as safe as being under a regulated entity. I'm not anti-regulation, okay? There needs to be some guardrails with this stuff. There needs to be some acceptable, you know, level of oversight. But the way that they're doing it is they're intentionally pushing people into an unsafe environment, and they're withholding and stopping American companies that are ready to go, preventing them from doing it. They're playing the little game. So, you know, Operation Showpoint, whatever the hell you want to call it, this is just part of it. It's a little game they're playing. I'm personally sick of it, but I don't think we've seen the end of this movie yet. Right. But in any event, gosh, we're running out of time. Okay, Melissa, what I was thinking is maybe we can jump to the Emmer clip because I think that that is pretty much the meats and potatoes of everything here because we're running out of time, and that is a fabulous clip, the grilling, if you will. What do you think? Well, I just wanted to play Louder Milk. Oh, go for it. A lot of people, I don't know if anybody is super familiar with Louder Milk, but let me find that here. Yeah, let's go to that because I think that that was also a phenomenal clip. Yeah, let's see here. This one is Emmer, and this is Louder Milk. Oh, and Davidson was phenomenal too. I mean, they're all very good. We're not going to get to them all. We might do some one-offs or whatever. Yeah, we may have to. There really is a lot of good ones. All right, so this is Mr. Louder Milk. Love them. Thank you, Madam Chair. Thank you for being here today. I've got a lot of concerns. I'd like to continue on a little bit in the direction that my colleague from New Jersey was going, on the number of rulemakings and how you have fast-tracked a lot of these, limiting public comment period. I've heard you say in here that you support congressional oversight and you respect it, but from what we've seen, your actions are different than what your words are saying. You've shortcut a lot of the Administrative Procedures Act in your rulemaking. It appears that what you're wanting to do is hurry things along before Congress can have its due oversight. Excuse me. But what I want to talk about is something that I have not been in favor of, and I've opposed ever since it was proposed, which is the consolidated audit trail. I know Mr. Hill asked you some questions about that. First of all, I've never been supportive of it, but it's here, and we have to constrain it. I believe it's a violation of the Fourth Amendment, the right to privacy of individual investors. Let me put it in the words of the American Securities Association, and they described it of how the collection of this data violates the Fourth Amendment right to privacy because it forces every investor's financial information, personal information, and transaction history without any evidence of wrongdoing. And I want to quote in a letter that they have sent to this committee, both the ranking member and the chairman, is that tracking unsuspected and unsuspecting Americans every move in hopes of finding unlawful activity is not consistent with the principles undergirding the Constitution, which is true. In fact, a lot of information that we see that regulators are forcing independent financial institutions to divulge about their investors or their bankers or those that do business with them, if law enforcement was trying to derive that information, it would require a search warrant. But yet the federal government will come in, and they'll force that information out of these individuals. Factor it. Why not? I spent a lot of time in the military dealing with security, information security. I had 30 years in the information technology sector. What I see in industry is a decentralization of information because of the risk of disclosure. Blockchain, many industries are going to blockchain because you're no longer centralizing it. When it's centralized, there's a one-stop shop for the bad players to come and get information about individuals. So my first question is, what do you believe in this? Is it easier to protect decentralized investor information held by thousands of firms, or do you feel it's more secure to centralize that in a database administered from Washington, D.C.? Which do you feel is more secure? All right. So I'm going to share Gary's response back-to-back here. Bill is more secure. There's risk in both sectors. There's risk in the decentralized. There's risk in the centralized. It's really about the appropriate data security in that database. And this is a debate that technologists have quite often. And the Consolidated Audit Trail is important to help surveil the market, to oversee the markets. Survey. Data was being collected before. So surveil the markets. So you're looking to use this as surveillance tool of the markets to enforce regulation, or what's the purpose of Consolidated Audit Trail? To help oversee the markets, to protect against fraud and manipulation, front-running, insider trading. Without any just cause? I mean, are you just randomly going, well, maybe somebody's doing something wrong here, and I've got all this information. But let me tell you, there is no one in the information systems industry that's worth their salt that will tell you it's more secure to have information at one point, one-stop shop. So if I'm a bad guy, I'm a foreign player. I've only got one spot to go to pull all this information. I'm going to put all my investment, all my technology, in breaking your security to get that information, versus thousands of places that I do not have the resources to do that. Centralizing is a security risk. Wow. So Consolidated Audit Trail equals surveillance. And what a nice way of saying that. And that's why, like, you know, as we're going through looking at this whole thing, like I said, there are so many things that people aren't, this is something to pay attention to. And, you know, I'm going to post some links and stuff about it, too. But, yeah, if you're just listening to this and you're not looking up the words that they're saying, you might just gloss over it, glaze over it, breeze past it, because we don't know what it means, right? We don't understand what that means. But when you hear this guy, I mean, 30 years, information technologist, he knows what he's talking about. And I wasn't really aware of Mr. Laudermilk, but I'm a fan at the moment. And I thought he was really genuine and seemed very knowledgeable, not like he was reading somebody else's words. And that's what I appreciated from him. Yeah. You know, we've probably got about a minute and a half left. You know, perhaps we can talk about probably the grand finale. And I believe it was Warren Davidson who is introducing, like, is it Warren Davidson, I believe? Introducing legislation that basically is just going, it's going to request Gary Gensler to be fired. They're going to remove the, they're going to restructure the SEC to remove the chairman and make it a committee, so that there is not a quote, unquote, figurehead. Yeah. And he, this was very powerful. It's quite an exchange. And he was called out for the inappropriate actions that he's been taking. I think, I don't know how many Wells notices that have been sent out, which are just threat letters that we're going to sue you. Most of the letters that have ever been sent out do result in lawsuits. And some of the biggest ones that we're familiar with right now is the Ripple lawsuit. Yep. And another striking thing that came out of this was, is Ethereum a security or a commodity? Yeah. Right? He couldn't really come up with, well, yes or no. But in the past he said it was. Today, at this hearing, he couldn't really commit. All right. So let me share. Hopefully I'm sharing the right clip, the final clip. We've got to call it. We've got to call it right now. We're coming up to the end. Melissa, we've got to call it. Oh, shoot. Okay. Let's see here. We're right up against the hook here. And unfortunately, folks, we've got to say goodbye. We'll cut it off. We want to thank you for tuning in to Beyond the Brink. There's just so much information here that we'd like to share with you. We'll definitely get the links into the description of the video files. You can find this in our previous episodes at VidaBroadcastNetwork.com. And you can follow us on YouTube, Rumble, Twitter, Audio.com, Spotify, you name it, at Vida Broadcast. We want to thank you. And you have a great week. And we'll see you next time. Have a good day. Thank you. Bye-bye. ♪♪♪ ♪♪♪
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