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00:00Great to see you. Thanks for joining us today. Happy to be with you. Now you've called Jeb Hensarling bill quote a direct threat to important police powers that allow the states to protect their citizens against fraud and financial abuse and that enable the states to avoid becoming havens for fraud. So my question to you Bill is how exactly does the bill diminish securities regulation power at the state level. Well the most important feature in terms of most negative feature about it is it basically at the same time is reducing the Securities and Exchange Commission's authority. It says that the states must coordinate their enforcement activities with the Securities and Exchange Commission. So in effect it's subordinates to state and therefore the state laws to the Securities and Exchange Commission. The history here is very clear. The states have been very effective in protecting our citizens when we see fraud . In fact very often we have preceded the Securities and Exchange Commission in identifying industry wide problems. So this is a wish list for the securities industry. They don't like having the cop on the beat at the state level whether it's Massachusetts or Mississippi or Alabama or any other state . They don't want the states. They don't want anybody. The truth be told another aspect of the bill that's particularly bad is the bad actor provision that presently would prohibit certain institutional entities who are convicted of misconduct from automatically taking advantage of certain status in terms of non-public offerings. This would be effectively done away with . So the protection that you average investors would have from bad actors would be done away with. And thirdly it would diminish the ability of the states to either collect fees or fines where they find inappropriate activity. This is all about taking care of the people the securities industry and it's all about putting at risk investors both individuals and investors . Jazz restrictions Bill thank so much for joining us. And so I spent several years more than 10 years on Wall Street and one part of the fiduciary rule and in my experience makes a lot of sense in the world to protect our clients. But one part of it was around the world. For one case and that investment advisers were very excited for their fiduciary rule because it would protect clients where some of the big banks would no longer be able to administer those big plans if they didn't have that fiduciary relationship. Do you think that's a motivation here with that for more than five point five trillion dollar market. Absolutely. I mean the rhetoric around the fiduciary rule has been oh no one will service these people will that defies reality. Reality is when there's money on the table when there's a market out there to be serviced it's going to be sort of the amazing thing about the fiduciary rule it's such a simple concept. You have to put your client first. You have to disclose to people. And the fact that so many financial institutions have prepared to adapt to the suit fiddle to the fiduciary rule and we're ready to go forward with it indicates it wasn't this onerous burden. It basically is another case of where the industry doesn't want something that's going to make them tell the customer how much this is going to cost who's getting what commission on what . That's what this is all about the fiduciary rule especially for not a non sophisticated or unsophisticated investors people who are perhaps limited assets for their retirement. This is very very important that this be preserved. Bill you've been waging this public battle against Jeb Hensarling on this fiduciary rule . Have you been able to speak with him or his office face to face on this matter and get past some of the talking points. No I don't think they're interested in speaking to us. If you look at the hearing that conducted the other day on Wednesday that most of the people lined up there were industry people or they did permit Maxine Waters to conduct a hearing today which some of the advocates were able to speak to but they're not interested. I mean we've we've had this battle before even amongst Republicans. I think there's an important point to make . I've spoken to a number Republicans around the country who are securities administrators who are concerned about this bill because they see it as diminishing the ability of their states to protect themselves. For instance the secretary of state in Mississippi who has an excellent record in terms of administering securities law and protecting your citizens. He's concerned about the bill other administrators who are not partisan at all not elected they are concerned about the bill . This is a gift to the industry at the expense of investors . Nothing less. I want to play for you something that Jeb Hensarling told our Kevin Cirilli because he's also not a fan of the Consumer Financial Protection Bureau saying that the director Richard Cordray should be fired because of what happened at Wells Fargo. Take a listen. There are approximately two dozen major consumer protection laws that are on the books. We would have an agency that is totally devoted to enforcing the law to really be a cop on the beat because enforcing what happened at Wells Fargo. I mean it's just basic fraud and basic theft that's been around since the dawn of man . Now you've held office for 22 years under six governors you know a thing or two about pursuing fraudulent activity. Does Hensarling have a point when it comes through Richard Cordray in the CFP be not doing its job when it came to Wells Fargo. No I don't think so. I mean one of the issues with Wells Fargo and I obviously wasn't involved directly in the case but I have read about it extensively is that it was a deliberate fraud on the part of individuals who created false accounts. We have spoken with people who were investors at Wells Fargo. They had actually no idea there were accounts being created in their name so when you have an entity that's going to go out of their way to do fraud in this case on a massive scale you can't expect immediately you're going to hear about it. But this only reinforces I find interesting. You talk about the cop on the beat. We are the cop on the beat the states the states and the people we talk to because people can call people like me and others in other states and get reaction promptly and to diminish our authority to the benefit of the industry I think is inconsistent with the attitude that Mr. Hensarling is suggesting .

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