CNBC’s Bob Pisani speaks to SEC Chairman Jay Clayton on cryptocurrencies, the state of investing, the IPO market and cybersecurity.
Q1 hedge fund letters, conference, scoops etc, Also read Lear Capital: Financial Products You Should Avoid?
SEC Chairman Jay Clayton On Cryptocurrencies And Investing
The Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More
Well Bob thanks and thanks for being here. Look we're always good we're always concerned that there are areas where investors are being exploited. Paying too much. Being defrauded. That's our job and we were looking for. We're looking for that everywhere whether it's old frauds pump and dump. You know in the penny stock area or some of the frauds we're seeing in today's CEO market every every woman and man at the FCC comes to work every day thinking about our Mainstreet investors and how to protect them. You brought up CEOs. Let me go to this area of interest in bitcoin is off the charts by our viewers not since not since the 2000 area. Have I seen such interesting. Tell us a little bit more about what you're planning to do with bitcoin crypto currencies and block this year. You brought up by CEOs I talk to my friends people who are interested in this and they say we're stymied we don't know what the FCC is planning to do. Can you tell us whether CEOs are definitely securities or are you going to carve out some exceptions or when he's going to make it clear really a decision on this. Okay so there's there's a lot in that area. Let me start with the technology distributed ledger technology incredible promise it can it can drive efficiencies not only in the financial markets but in a lot of markets. Finding two areas in the financial markets where distributed ledger technology has come to the fore crypto currencies. These are replacements for sovereign currencies replace the dollar the yen the euro with bitcoin.
That type of currency is not as secure. We turn to what's a security tokin a digital asset where I give you my money and you go off and make a venture. You have some company you want to start or something you want and in return for me giving you my money. You say you know what I'm going to give you a return or you can get a return in the secondary market by selling your token to somebody that is a security and we regulate them. We regulate the offering of that security and we regulate the trading of that security. And that's our job and we've been doing it for a long time. So you're saying the classic definition of security. You invest in a common enterprise with an expectation of profit. You're saying the way you look at most CEOs they are security is correct. Are you planning now to make a clear statement on that. Because there seems to be a lot of confusion about whether anybody is going to get approved or not. Bob I hope I just did. If it's a security we're regulating. And let me just we've been doing this for a long time and we've built a 19 trillion dollar economy a securities market. It's the envy of the world following these rules. If you have an ICAO or a stock and you want to sell it in a private placement follow the private placement rules. There's no secondary trading.
You know you have to do that if you want to if you want to do an IPO with a token come see us file financial statements file disclosure take the responsibility our laws require and we're happy to help you do that. Public Offering you seem to be saying that the FCC is not going to be changing the definition of security just to suit the ICAO community's right. I'm certainly not going to support that. OK let me move on. What about alt coins. We have discussed bitcoin with the rather gold coins out there. There is ether for example there is RIPL arts. Art is either a security. So Bob I'm not going to comment on specific crypto assets and whether they are security or not security. But you you captured the definition very well. Now am I giving you my money for you to go off in a venture where I'm relying on your efforts and the efforts of your colleagues.