Transcripts For CSPAN2 SEC Chair Testifies On Capital Markets Amid COVID-19 Pandemic 20240712

Questions on his nomination to be the u. S. Attorney fo attornee Southern District of new york and the chaithe chair is authore basis of the subcommittee without objection members of the full committee and on the subcommittee are authorized to participate in todays hearing. To keep their video function on at all times if they were not recognized by the chair. They applied to this hearing. [inaudible] in addition participating in person enforcing the order and the to we provided the following guidance for meetings in the limited closed spaces. This is one such as the Committee Hearing for greater than 15 minutes the coverings are required and the chair will treat Wearing Masks and all should wear masks. Members who do not wish to may participate to the platform. This hearing is entitled Capital Markets and Emergency Landing in the era. I have a point of inquiry. It was my understanding based on the rules that masks were required to if speaking in the question purer cow. I just want to make sure. It is the strong preference that we wear the masks even while speaking. But that rule will be less enforced then at other times. The reason for that is if you are not wearing a mask before, you may not be called on the tht once i caught on someone, we will rely upon the dedication of everyone else in the room. As we have seen from a number of instances we are more likely to spread the disease with speaking them not speaking so i would urge you to do so but my tools for enforcing that are limited. Thank you, i appreciate that and i would advise your Comfort Level as we are dealing with this much like the rules on the house floor i think that we are free to the Comfort Level being able to. So why would you attack. We will treat Wearing Masks and as a matter of decorum. As i said before, they may do so when they participate virtually. I will now recognize myself for four minutes. Mr. Clayton, im glad you are here. I hope that you are here six months from now. Its been suggested as a part of the position to fire the u. S. Attorney for the Southern District of new york if he would be called upon to fill that position they can stand up and save the reputation. I dont know if hes taken advice from senators but in this case i would commend to you especially in light of the fact that senator is pretty much indicated that you are with us for the duration. Theyve also moved aggressively to stop on the investment scams and have already suspended trading of the companys. With the time and emergency i would hope they would use the bandwidth to do two things, things that are necessary because of the emergency and things that are bipartisan. I would hope they would curtail the efforts on the proxy advice and the roles that would narrow the disclosure. We will be dealing with a number of bills to require Public Companies risks to the supplychain disruptions and workforce to reverse the fed and treasury decision to open the facility is only to corporations with Credit Ratings from certain agencies. The wii will also discuss members of the legislation along with my bipartisan cosponsors and among these are the need for continued Public Disclosure of those unique risks that the companies have because of covid19 and the barriers to entity make sure they are protected and continued challenges with the accounting standards and the overall push to be controlled to move from historic accounting and what has happened to those that have been completed to moving to having the accountants project what is likely to happen or to determine if future values. Stock buybacks i will now yield of four minutes to the Ranking Member. The Capital Markets and Emergency Landing in this era i will note it is in the Southern District of new york and now that that has been checked a hope that we can move on to the work of the churning clayton. The last several months appended the likelihood for millions throughout the United States with almost every state under stayathome orders, everyone has been affected by the pandemic. Its impacted the Capital Markets as well. During the First Quarter of 2020 it caused Capital Market chalk. This was evidenced by sharp price declines and equity markets which closed the First Quarter with the worst performance in the financial crisis. The ultimate symbol of peace times with a march 23 closing of the Stock Exchange the Capital Markets have undergone the pandemics and im pleased to report as we are beginning to emerge we should take stock of the Lessons Learned it will necessary influence howellnecesy protect business in the foreseeable future. We look forward to hearing from you today to reunite the economy and Health Business gets back up and running and get americans back to work. We need those folks to increase savings for these main street im hoping we are able to capture the streamlining and ass economists talk about reducing the friction between the transactions in a way thats certainly keeps investors save, facilitates the markets and increases the value and its importance here in the United States and with that i will yield back. At this point i would yield to the chair of the full committee. Im happy to take your time to i commend joerg leadership and during these tough times for focused work youve all been about is commendable. This gives assurance in the market and to the American People and the government can actually function even in the time when we have to stay socially distant. So we focus on the policies that make the market stronger, more attractive and more competitive to see our way through this economic challenge borne out of this crisis. And the prioritized target of reforms to address and needs related to the virus so thank you for your leadership and for being here and thank you for your good work. The testimony of the distinguished with mass for the Oversight Council is a package of responsibilities for anything else hes considering doing. Chair clayton has testified before the committee before and will not provide future introduction. I have a deep respect for the district which was recognized throughout the nation and internationally enforcing the law and pursuing Justice Without fear or favor. Im fully committed to and focus on a roll at the fcc. We couldnt be more proud of the work of my colleagues of the past three years. There is much more to accomplish in those that emphasize the commitments respect, diversity and opportunity for all. I look forward to continuing to the commission. In the mandatory cluster thanks to the dedicated women and men of the agencies that have remedied the location and flexibility and resiliency proving way to work is so important to the Mainstream Investors in the markets. Indiin these times of economic stress and volatility, by the collective unprecedented Safety Response to covid19, the commission has focused significant resources on ensuring that the markets continue to function as expected facilitating timely decisions in the disclosure of a. I would be when asked if i didnt mention the prompt Decisive Action of the Federal Reserve, treasury and congress from my Vantage Point they were necessary to. Despite the extraordinary volumes of the volatility the past few months, the Securities Markets have functioned largely as defined and importantly as the participants would expect a wave been engaged with our fellow Market Participants in this regard and provide targeted relief and guidance. Weve also been assisting issuers in fulfilling the obligation to provide materially accurate conflict disclosures and urged corporate and municipal issuers to provide investors as much information as practical regarding the current and anticipated financial operating status. The commission issued over 30 and bought a number of Enforcement Actions based on the claims. Finally, on the agency engaging in numerous initiatives weve also continued the Traditional Agency functions including the rulemaking, investor outreach and others. Thank you again for the opportunity to justify that the work of the women, men of the commission and i look forward to your questions. Thank you. We have a minute available to the chair of the committee, but im told, and this doesnt surprise me that she would prefer i do not yield per minute. A point of inquiry. Can you lay out for the members your intention of how thank you for the clarification. Small business is very important. We just about the most Popular Program that is going to cost the federal government have a trillion dollars. But its important we do Everything Possible to get capital in ways that dont cost the federal government money. The de unintended effect of a indepth post funding will. Are you confident they be. Fullstosolvedthis problem iny will be included in these indexes. Its not something that we can mandate a vm improvement is appropriate and if you look at the regulatory flexibility agenda, we have a fund to Fund Investor experience and i intend to finish those rulemaking send proposals to i think Small Businesses are even more important to the economy than those that are enjoying the role that includes them for the investor documents looking to expand electronic of a document beyond the shareholder report and askeand asked my colleaguese heard me say if you mail it to me i will lose it. Email it to me and then if a witness in this room is particularly boring, i can look at it while im in this room because we only have interesting witnesses here. [laughter] when i have a spare minute somewhere i can find it. Where are we on electronic delivery . My perspective has been shaped by responding to what we need to do in this situation. My response has been further shaped on the work weve done in this environment. We live in e. On electronic communication world and anyone that wants paper should be able to get the paper. What this has shown us is the importance of electronic delivery. I want to address the fact that the company is based in china and i think also belgium are being traded on the Stock Exchanges, but the investors dont get the protection of the auditing audit. The not subject but that is allowed but when you have one that is more than that, you are asking people to make investments and without the protection if you were going to consisinvest in the Investor Protection committee, so i look forward to working with you to make sure they are protected and i hope that in evaluating whether to impose the requirement in measuring what portion is unavailable that you wouldnt work on these powers to change by having them do more or less. We want more auditing and we want the auditors being audited so i look forward to working with you on that and we will now yield, i both recognize the gentleman from shit and for five minutes. Think you, mr. Chairman. It seems we may have swapped notes and questions here. My questions were about the digitalization efforts and assessing the impacts on the Business Continuity plans in permanent changes and i think that you answered that to get the paper. To expand a little bit about where the chair was going what iwithit make sense to make suret there is full Rulemaking Authority and in these jurisdictions they are not caught up in the bill . The question is what scope of authority do we have in writing the regulations to implement this bill. As the bill stands, we have the ability to do that and more as it stands we could implement it but with further nuances. I just want to find out if you think that you have the proper tools to be able to move forward on that. As a small privately owned business as we see them struggle to stay afloat some are looking to sell their business. I have a bill that would allow the small but this is the opportunity to be sold to the next generation of entrepreneurs while protecting good paying jobs. I hope you would join me in supporting this and we can pass this to help struggling homeowners. There are things we can do to make sure the Small Businesses are not treated like a publicly traded largecompany. I am so happy with their work because the job is to recognize they are different in their needs and operations firm Public Companies. With response to covid, weve addressed it. Co. Adjusted that but to serve the smaller businesses and understand the rules should be different from the Public Company rules and shouldnt require the hundreds of hours to get there. I believe that the sections that have supported this in the past we have seen a number of efforts ive passed this bill in the house unanimously. In japan they need coke schema to be helpfuschematabe helpful g several of my constituents have been waiting can you give an update to help them get their money back . Let me say this, you cant reach any conclusion other than that there is a failure in the system. Everything that went on here at the legitimacy at the end of the day they havent gotten much money back and they will never be anywhere close to anything satisfactory but we are looking at the remaining claims consistent with our authority and independence as an agency thanks to the work of considerable reserve in conjunction with this body we are in a period of uncertainty. We will find out how they are operating and hopefully what they will see is companies adjusting and continuing to increase their ability to operate to the extent that filters down to. As they learn to deal with the virus observationally that is as quick an answer i can give you. We have done well. We have work to do. I yield back and i will have to excuse myself because im about five minutes late for my vote im getting notes from staff how to conduct the hearing to review the disclosure materials. But i promise not why a few are here. I recognize the chairman of the full committee, ms. Waters. I appreciate the opportunity to be here with you today. Chairman clayton, in, the United States Southern District of new york was forced out of the position by President Trump and attorney general barr. Actions appear to be a continuation of the efforts to squash any intend to hold the enablers accountable. The Southern District of new york has been instrumental in conducting independent investigations into the associates and the Trump Organization in currently investigating. An institutional with substantial Financial Times to President Trump. In light of these actions i am deeply concerned that while this post is pending, President Trump and the attorney general may try to interfere with your ability to independently oversee the securities and Exchange Commission and serve as wall streets cop on the beat during the Global Health pandemic. I dont think that matter requires the attention. I dont think it requires my attention at this time and i intend to devote my full attention to the commission. So you will continue to serve as the chair while you await the confirmation and you will not step down or step aside or have someone take your place in any shape, form or fashion that you know about . Where i sit right now this isnt the time to decide. There is no need for me to pay any attention to the nomination at this time. Im fully committed to becoming the chairman. That wouldnt be your decision, and im not asking if you were making that decision. I basically want to know if anybody els else sent to said tt you would not be serving wh whie you awaiwhydont you await conf. Has anyone said that to you, anybody . Ive checked this matter with our office and i continue to Service Veteran and to develop my full attention. Will you commit to refuse your self from all matters before the direct or indirectly involve President Trump which we may create the appearance that your actions served as a favor to President Trump to obtain a position that theyve highly politicized . Im going to continue what ive always done which is to pursue all matters within dependence and consult with ethics on any issues that would give the appearance of not having independence but i continue to operate as i have. Said that as a yes ask what the records show the answer is in the affirmative. If we have time for one more question, chairman, at the onset of the crisis i call upon you and other financial regulators to immediately halt the adoption not directly related to interest the unprecedented. 100 of the resources should be dedicated to protecting investors and the u. S. Capital markets during the pandemic and i was also clear that it would be unacceptable to use the crisis to justify the regulatory rollbacks of the investigation regulations. Yet as i write in my letter to you this week i continue to see under your leadership engage into key regulatory rulemaking that expand in the private markets and state security regulators testified. This would limit the amount of information that they rely on at a time when markets are experiencing the highest levels of volatility since the financial crisis. Another proposal would prevent her from seeking to reform and modernize the companies they own included by making it harder to propose increasing diversity living wage, take it seriously, Climate Change or the postpandemic world. So, have you paid attention to what they are concerned with . What i can say is the regulatory agenda we are continuing to pursue the regulatory agenda. We are doing so in a very open way. We are continuing to take the comment and engagement in on those areas began to stir protection i now write a nice gentleman mr. Mchenry for five minutes. As i have written about harmonizing the choppiness of regulations in the commission this is an issue ive worked on for a decade. We need to help Small Businesses in a variety of ways not just blending the opportunity to raise other forms of debt as well as capital for equity. I wrote about this in the social purpose vehicles so i wanted to see if you could elaborate on the comments but you have received and when this looks like you will finalize the rulemaking. Sometime around the end of the fiscal year i intend to stick to the agenda. If lets say you are a small or Mediumsized Company looking to reduce capital, youve got to weed through the patchwork of six or seven crowd funding and in the securities to do it, what we want to do is streamline without in any way creating the protection. In some respects we have the capital rates per 50,000 then we do for the 50 million. That doesnt make sense in terms of the cost burden for the protection and clarity of information for the investor. So, rightsizing of those things so that there is a gradual change in the regulatory costs and oversight based off of the race. So, senator, the breakpoints to, is that the focus of your work . Yes, that is a fair summary. What do you think will get a benefit if this is done successfully . A hopeful benefit right now is our most acute problem is the Companies Getting started raising two, three, 400 or 500,000 generally that is achievable through family or the like that tried to take the company fro from that size up ta 25 milliondollar company is extremely difficult. Once you get 25 million of those investors that are sophisticated and they bring them in. It is in a death 500,000, a million, 2 million, up to 50 million where there is a tremendous amount of access to capital could be better with Investor Protection with a bunch of things but its too choppy where it is now. And i commend the work that you focused here. It has been doing for decades and i think that was some of the poor implementation that you could remedy and make clear the intention of the congress here. To highlight also, the head of the sustainability said that there was, quote, and over abundance of data into Strong Majority isnt connected to the materiality so which is a fundamental foundation of the disclosure framework so given the vast amounts of data for at least some if not most, do you think that it would be appropriate to dictate a single scoring system from the Company Using that data . Thats coming at it one way. A different wayclear that a single metric doesnt make a lot of sense. When you take the qualitative metrics that have a degree of subjectivity and personal preference, just one of those has a fair amount of ambiguity and then you combine them together to come up with one score, i love the economist won the nobel prize for shoving when you try to rank them like that, it doesnt work out very well. Lengthwise, with the coronavirus, do you think that there is an appropriate onesizefitsall disclosure requirement . Ive got to commend our staff because we have gone out to give us much guidance as they can to disclose the effects of the response and it is different from company to company. Some have an affected in some ne ways and others are completely shut down. Others have liquidity problems and others dont. Our principlebased system has proven itself through this response and just the Second Quarter it is going to be the same way. Thank you for your work. I will yield back. I recognized the gentle lady from new york for five minutes. Thank you for being here today. I want to address the issue that is on everyones mind this scandal in the Southern District of new york which is in my home district. There is also several open investigations on President Trump, his company and Close Associates including rudy giuliani. Thereve been press reports that he was very unhappy about the decision to investigate and then on friday night, the attorney general released a statement falsely claiming to attorney in the Southern District had stepped down and announced the president intended to nominate you as his replacement. Of course we now know the attorney general was lying. He had not agreed to step down and when they refused to step down, the president hired him. This episode was extremely troubling to many of us. To suggest he fired u. S. Attorney foattorney for refusinw his directions from criminal prosecution, that would be a blatant abuse of power and should be unacceptable to everyone. Now you and i have to have a really productive relationship even though we do not always agree. But i have to ask you some questions about this episode into involvement. First, when did you first discuss this job with the president or the Trump Administration and who did you discuss it with, attorney general barr . Line here is the true man of the fcc to discuss the work of the scc. What i can say as i said in my Opening Statement is i need to go back to new york, we are both from new york. I was asking for a timeline. Give the approximate date and time line. This is something ive been talking about for a while and consulting with people whether it would make sense for me to continue. It was first raised to the attorney general last weekend and something ive wanted to do. And they first became aware of this last weekend. Thank you. And did you knoyou did you knowt want to leave his job in the Southern District when you agreed to accept the nomination or in other words did you know that he was going to make words beneath the ring for you instead or the job . I am not going to get into that. If you are confirmed by the senate for this job, would you commit to reducing your self from the current investigations . About is a process that is way down the road. In any position i take i commit to doing it independently without fear or favor and in the pursuit of justice. And there is nothing that isnt what i was asking. To recuse yourself should you be appointed for the investigation involving the president or the associates as i have to say the circumstances of the firing was very sufficient antifreeze is a lot of questions about whether the president is interfering in the criminal investigations. So, i personally think the American Public for a clear answer whether you will recuse yourself on these very sensitive investigations. Im asking a very simple question will you commit to refusing your self from these investigations . That process is something that doesnt need my attention. What i will commit to do in my current job is to approach the job of independence and to follow all ethical rules. I understand you do not want to talk about this right now. But i think its important that the American People right now know these answers because if you are not going to be independent, the way to be independent is to recuse herself. If youre not going to be independent, then we need to know so that someone else may be nominated. Understood and i commit to that independence. I recognized the gentle lady i think that chair and i thank you for joining us today in person, chairman, to discuss the Capital Market during the pandemic. And i just want to say for the record ive always worked closely with you and your office and found it to be to be a high character of ethics so i want to thank you for that and im sure you will continue to in such a way. I have great confidence in you. General clayton, despite the challenges of the coronavirus, i am pleased to see that the commission is hard at work looking to improve our markets. Can you please describe the recent proposed changes to your equity markets, structure and where you think improvements will be most valuable for the investing public, specifically the main Street Investors i have fought for. Thank you. Our equity Market Structure has become incredibly complex. Just at the levels of trading is electronic and its done in nanoseconds. Ultimately it falters him to the longterm investors and we are looking at both infrastructure and governance data plans in the way that its distributed to those that trade in the market and try to make sure that that aspect derives fair and reasonable pricing. Thank you. I am also worried about the risks of fraud stemming from the coronavirus wease we saw from t8 financial crisis arrived in the investment scams that take advantage of the volatility, and im deeply concerned about the seniors in my district and those that are saving for their retirement and im concerned about the scammers that are out there. Can you confirm what they are seeing in terms of the coronavirus related fraud and what they are doing in its examination and enforcement efforts to reduce this . Unfortunately we are seeing people with testing they say they have and try to get the value of the stock or private placements we are seeing some of those. And our enforcement staff is extremely productive. With fraud and misconduct bringing the trade suspensions and eventually actions. What i can say to investors is deal with professionals. Lets deal with the brokerdealer investors and if you are at all doubtful about any of these suppose youve worked with before because it is something of deep concern to me especially into those that could lose everything if they put their lives into it. So, it is a grave concern to me. I am encouraged everyone to see that they remain committed to the regulatory pandemic. The fcc is under your leadership and they have made great progress on a number of proposals that would remove the unnecessary and regulatory burdens on this flow of capital we need to stimulate economic recovery. I know you are going to give me some updates on what youve got here. I am pleased to see that the folder rule is finalized today and any other brief updates on the progress of the commissions efforts and especially on things like harmonizing the Event Security framework and the proposal to modernize the framework for the funding evaluation practices and such i think. Com and period ends on july 21 with something. Anything but an update would be great. Im optimistic we would be able to conclude if not all items, virtually all items including what i was going to see is the harmonization of that and bringing transparency to a number of places. Im excited for you to work posture responding to all of these events that theyve been able to continue with our defined agenda to do so in a professional way, and i cant say enough. Thank you very much and i will yield back, mr. Chair. Mr. Hines is recognized. Your integrity or independence and reputation. We have known each other for some three decades and has worked on a lot of things together. If i were contemplating, i would do my job looking at the qualifications in history and philosophy, that i would have no questions whatsoever about the reputations and independence and integrity. I am speaking of integrity i was delighted to see your statement that the antitrust historic and those you thank you very much for your comments. I dont want to imply what we have been doing and ive greatly appreciated our friends we have been working together. They have people with great expertise and we oversee these complex markets to help us with some of these issues and we were able to help them in the expertise and how the markets will pervade. Vno eq formalizes that relationship. No secret i expect at the end of the term and we have the powerful relationship. No particular areas have been contemplated. We dont talk about the pending investigations. I dont want people to think that this is anything more than continuing the cooperation that weve had across the divisions. Weve had this conversation a couple of times. This blue bar shows almost perfect pass, 7 for those in the middle market. Weve talked about those two make that a part of the record and again it is showing they are priced at 7 from new york to la and the price of an apartment moves around a lot because it is a competitive market. So one is legal and one is illegal so what is the difference between me paying a corporate insider for more robust information of a corporation and a trading entity to pay in exchange for nonpublic information . It doesnt require trading to see whats going on and if it is fair and reasonable. Here is a publicly available data and we start here with robust and widely available data what we have is an increase like this. That gap, we have to look at and decide if it continues to be fair to trade under those circumstances and the people can comply. There is a gap you would judge to be unfair which you pay for and what you get publicly . Thats a very good question. Yes. [laughter] thank you mr. Chairman i appreciate you holding this hearing. Thank you for being here good luck in your future stuff but im excited what you have been doing at the sec. Thank you for the work you have done to make rules that make sense to give investors more information. I do want to follow up the fees and expenses rule. Obviously it was built for mutual funds not for companies to have operating expenses so those make it look like they eat things up with these bitterly operating expenses so with the equity you dont have them talk about their operating expenses they deal with investors. So i am hopeful and we have a bill and will pass it if we have to i know you can fix this. You are already working on it and i hope you fix it and we dont have to pass our bill because i think its really important it ultimately impacts Small Business companies in my district and all over the country because they have less access to capital as a result of a rule built for mutual funds and now applied to a company that now has operating expenses in those have to be disclosed to make it look like there is too many fees. Please take care of it but if you dont we well. That was the first thing i wanted to bring up. The other thing i wanted to chat about is the statistical in a number of Committee Members have expressed concern and to choose winners and losers thats a real concern to make sure everybody has access to these new facilities coming up you are the primary regulator has the ftc been consulted on this subject . And if not have you offered any information that can help them understand how they can decide to choose rating agencies not designed on an arbitrary decision that doesnt actually look at the health and quality . The short answer is yes in a dialogue with the Federal Reserve and the rating agencies and using the data we have to help them make the judgment and which are appropriate for which programs. You have championed issues to protect investors while giving them access to choice the colleague from minnesota has a bill we have introduced to direct the ftc to do more tailoring for the rules for those index link annuities to give investors access to upside while giving capital protection but a lot of the forms they have to fill out our bill for Equity Companies that have a lot of information not necessarily relevant and just hard to navigate you could actually fix this yourself i just highlight this for your attention i hope you Pay Attention and fix that yourself. Thank you. Thank you for your great work at the sec you have Unfinished Business we know youre focused on the and will stay focused on that through the end of the year good luck whatever the future holds for you thank you for what youre doing for investors every day. Mr. Chairman i yield back. This seems to be bipartisan support for that position. Thank you mr. Chair for being here. I appreciate the work you and your staff have done to be proactive about looking out for scams and fraud. Equally important in terms of market capitalization of share price manipulation as all of thes ongoing Clinical Trials report out you seen situations where the results are released with a massive swaying in share price and questioning the timing of the scientific point of view. Are you doing in one anything in that way to look at possible share price . I will tell you in the most appropriate way we dont talk about any investigations. We dont do it. Do we look for patterns of activity generally to create suspicion in anybodys mind timing of announcements, buy, sell,. Have you added extra capacity with covid related pharmaceuticals . Then we do that in the context of the current day just as we look at covid related anything that would be market moving in the context of what pharmaceuticals and other things youre talking about. Let me be clear we have encourage companies to get out there with information as quickly and as transparently as possible because nonpublic information becomes incredibly valuable and it is a place where it can be grave misconduct we Want Companies to be as transparent as possible when they are not disclosing information keep it as confidential as possible. That makes them a huge target for cyberespionage. I encourage you to keep your eyes focused on the sector there will be important medical trials reporting and the eyes of the world will be watching and investors will be involved. I appreciate all the efforts you have made to be effective at your job as you are leaving the new york office i appreciate that and your discussions with attorney general bar anybody in that chain should remain confidential but separate from that are there any discussions anyone speaking for the Trump Organization, President Trumps private lawyers or anyone outside the command chain . I want to go down the road of getting into all of these things but i have not talked to anybody about any pending matters. The considerations involving your appointment was it can find to the appropriate command line and the outside of the command chain which and to be completely comfortable whoever this was talked about. And then to consolidate on the trial one on the trail. And then the progress that you made and then to have personal identifiers to be portrayed in those venues. I think we have made substantial progress. We started from a bad spot. In terms of security, architecture, and we have made substantial progress. I believe we will have a completed as intended and then to get access to the and identities and because of the administration that isnt enthusiastic and we are making progress. Thank you chairman and clayton for the commissions leadership through the pandemic crisis of march where you tip your head about the fellow commissioners did. And to bring the markets open for the benefit of the constituents to know the value of the account to consult with the investment professionals. I commend the work of the fed and treasury for the quick work and liquidity. And then to get them functioning again. And thank you for your support then to put some strong attention on that we have a new securities commissioner. And then to introduce you personally as he takes up his new responsibilities at the security department. And as we mentioned on the call the other day but that primary corporate facility of the bed and of the cares act and to take that comment from you in the but the fed and the treasury confirmed any bond purchased is in compliance with the cares act. If you will yield i have little doubt everything that is being done is legal. I cannot yield you right now because im busy talking to our good sec chair valley back in touch later. And with that pandemic and then with that comment. Of february. I dont really believe and i have expressed that to you to make the changes in the municipal market. And with the commission and with those administrative procedures act. Whether we have to follow it or not we are confident it is temporary and is my expectation if its done anything on a permanent basis or any broader scope there would be opportunity for those. I do recognize since it was originally proposed you attempt to me the questions in the comments and found the msr be and that temporary relief is dated june 16 and look at the municipal Securities Market it is functioning quite well there is no lack of access and all the month of june is capital inflow as an emergency situation thats all wolf in sheeps clothing to justify the rationale. And with that any direct placement. We will get that information. And that to make it public. And i would expect that activity. Would be considered there any open notice and rulemaking. And it is limited in size and its extremely limited with the distribution. The next question is heads and shoulders above the average member of congress that 15 feet above us in your recognized for five minutes most people actually its a little less important with the security as the protection about this committee. With the Financial Capital of the world. And andy van more important thats the rule of law. Millions of americans have taken to the streets that no person is above the law even at 1600 pennsylvania avenue your tenure with corruption and scandal or anything of that nature and then to take steps and that things will go awry that is considered for. That we have justice for all as we move forward. So my first question is and then in the financial markets. And that is a game changer. And then with that program that has proven to be so defective. And to talk about the whistleblower and let me say this it is extremely successful and im extremely supportive of it. And we can see from the recent awards we have not slow down we have set up the timing to get them up to whistleblowers what we are doing is making this as transparent and efficient as possible and hoping to move forward not decreasing but actually increasing the incentives. And all the things that are taking place. And those Record Number of day trades jim cramer so how does the sec react with the day trading do they address this issue . I dont know if we need additional tools but i do see no doubt about this there has been an increase shortterm participation in the markets and when i see that it concerns me that people do not know the risks they are taking particularly and leveraged products and to create a margin and all the Retail Investors. These are products and then to trade it on leverage and options im sorry my time is up. Thank you so much for coming and chairman clayton after your appearance for the full committee with the full download of the consolidated system thank you for your response to the questions and in your response you highlighted the work the sec has taken to limit those types of Data Collected and with that staff to provide recommendations to help enhance the consolidated cybersecurity thank you for that. As you know this is the largest database seen by a Regulatory Agency and contains extremely Sensitive Information everyone supplying the data is very proprietary trade secrets of keys to the kingdom. And as i understand it and the sec what concerns do you have in mind and then to pose the questions to the sec staff and that they those risk controls and then once it is downloaded and are you evaluating those controls. And that type of risk that you identified that causes me to ask those questions and if you allow me to speak generally and know this is a complicated problem i look at it this way. The sro is a lot and then to peel back a little bit that the sec gets all the data what others need to do their job starting with everybody to peel back i dont think thats right perspective with the idea that the sec with the across market obligations i have access to all the data. And scope the data and the obligations that they have. And first and foremost and the data that could and as good measure desegregating the data personally identifiable. So while i understand that all the sec staff recommendations may be made public would you be willing to share with members of this body how we can collaborate in this effort . We are doing a good job collaborating already and that philosophy that i just described what data do you need to do your job heres the data thats the right way to approach this. But frankly mentioning cryptocurrencies most dont aspire to be actual currencies and truly that bipartisan bill and that to be attributable to those assets. And lastly more than 100 colleagues to us expressed concerns with that mortgagebacked Securities Market. And we are concerned in the commercial spaces immediately disrupted it so highly liquid and sensitive and even with Municipal Bonds and this death spiral for all sorts of things in march the fed provided stability for most things but not much and many firms have already gone bankrupt in that space. It is in bankruptcy because of lack of collateral that liquidity. Now we look at a similar challenge where people are not facing challenges because they lack sufficient collateral for the Market Structure that can deal with it. Are you working with this . We are. My time is expired. I didnt hear all your testimony but i do want to ask you have you ever been a prosecutor . At the sec . I oversee 1300 enforcement attorneys bringing 2000 cases in the time ive been there. We have collected over 10 billion. And has been returned of 3 billion. And those under the oversight the former prosecutors i hope that gives you comfort in your question. I havent known you and colleagues you say sterling things about you today all i have heard about you in the past and the Corporate Governance issues i want to ask you about the my understanding is you have a reputation for great integrity. I refer you to the generals of great reputations and what they were called by this administration certainly has left their reputation in tatters ill just refer you to them. I want to ask you about the disclosures the Advisors Committee recommended with social governance disclosure standards to incorporate disclosures and the regime of the sec registered issue or some believe that Asset Management echoes the calls with that standardization as you may or may not know september 2019 to pass my bill and that simplification act this requires Public Companies to have different efg metrics to establish a rule so what are the commissions next steps how does the Commission Plan to bring the clarity into that reporting framework . I think this terrible covariate 19 must be a precursor for Climate Change. I have been very transparent on my views and on tuesday and how to get more meaningful disclosures. And there are topics and there are they a tremendous amount of disclosure. And with that compensation and the like. And then trying to get and on a sector by sector basis it with property and casualty and thats important to investors. And with that manufacturing facility in the midwest. Its a completely different scenario companies can ingest but i do believe to work collaboratively we dont just use one metric. But i was going to ask you about Corporate Governance but also diversity. Both in Financial Service industry at the height level on the few seconds civic this is a focus of mine since arriving at the sec. We need to make more progress we rot diversity and inclusion and opportunity. Not just as something in an officer Training Program but i believe into the fabric of the sec we are integrating the office of minority and women inclusion into the hiring process and holding a special roundtable. This is something im committed to. Thank you for your service. Mr. Chairman first and foremost with regard to esc i appreciate what you have done in language that is clear to help investors muddy the waters. And thank you for the recent work on and then you have done great work on this and the Many Companies that will benefit from that to poorer more dollars into research and development to unnecessary compliance. Thank you for that secondarily i have recently written a letter how you can reduce the barriers to modernize and i went to follow up with you just to say this continues to be important and ever more important with the dynamics going on and shed time allow to get the ball moving forward. And bipartisan to find a solution. And to abstract topics everybody saw the markets go down everybody assume something could be wrong. Can you clarify briefly markets going down even significantly in a single day or month is not this positive for inclusive that something is wrong or not functioning in the markets. What i can say this is the greatest period of uncertainty and the real economy. When i want to do any victory lap spent the markets performed incredibly well it is action by the fed and the treasury that credit and capital continue to flow throughout the system. Thats exactly what you want. To crystallize the very point has you articulated circumstances also there are reasons to believe this are signs of market working not signs of them not working. And then those several bills that are considered right now that i believe may be redundant that Companies Need to disclose and that workforce that i understand that there i am no sec lawyer but those things that are material to their business with a positive or negative impact need to be disclosed already. With that principle disclosures system and things you should consider what is your Liquidity Position with the health and safety of your workers and look i want to great people but disclosure is extremely strong. It gives investors confidence. And then to expect companies to be as forthcoming as comprehensive as possible and doing something how they are looking at the business and its prospects. I rather have bad news and no news. Will use yield . And then to be a prosecutor some of us want to ask how many have been bankers or Insurance Agents and precious few i might note. The time has expired. And now also participating by webex. Hello chairman clayton and that investor advisor experience those that are provided we are more than happy to engage to have perspective to include theirs with the Financial Services its important to impact to the entire country not those that have the specialty or expertise. Person want to recognize my colleague, mr. Chairman weeks that is a concern of overexposure of Retail Investor investors. We have seen new Market Participants there has been a much larger increase in the absence of Retail Investors those derivative options to purchase these kinds of assets and so before i going to my question then to make your statement on the risks with respect. Thank you for the opportunity when we have times of volatility people making a great deal of money as a result of buying low and selling high. And our kind of investor there are significant risks. And until i understand that ris risk. So with individual investors and traders have their own responsibilities and that leverage they expose themselves to the platform that make those trades to the investors and traders they also have a responsibility to ensure the suitability of those individuals making those trades so if the ftc given the increase of investor activity has enhanced of the Trading Platform to do Due Diligence im not proper suitability test for access to daytrading and market access. There are selfdirected accounts for you are not dealing and that new obligation at the end of the month and which i believe will i making this clear to brokers right now to make sure that investors do understand those risks as appropriate we are looking at the softer rest on directed aspects in the access to those and appropriate. And its important for the ftc to circle back on this with those selfdirected accounts. And more importantly its done in a way where the investor fully understands the risk with the individual investor there comes a time is not careful the counterparty risk. In the whole group of individual investors and then to began impacting the ability for the markets to function and then to present itself thats exactly the same kind of mentality with the subprime crisis and that risk was good enough so i just ask you keep a close eye on this not only to protect the regional investors. Thank you. I yield back. Thank you. The witness should know we have between eight and ten additional speakers. We do not intend to have a second round i recognize the gentle man from ohio. Thank you for holding this hearing today and chairman clayton for all your work at the sec thank you for working with the others i wrote a letter this past december and then to spur investments with the additional need for startup capital. And thank you for your recent response and then the private markets we talk about this privately. And those going down significantly and in the private markets before going public. And to those opportunities and in response and then to have main Street Investors can you discuss more and provide the current roadblocks . Sure. For those Retail Investors to have access to Investment Opportunities in line with individuals. Retail sits right beside institutional and they get the beneficial of that interest you want to make sure and that those are one option to do that. You have to do that interest and low cost reasonable cost of access and to explore ways to do that and we are making progress. And then to access the private market with that that prohibits funds investing more than 15 percent of assets in private funds elicits to accredited investors . As part of overall looking at it we have to have that appropriate amount. Shifting to china for a second to reiterate support which i have joined to have them play by the same rules that the Stock Exchange. And building off the need to protect us investors from china i just yesterday the Financial Times and 20 Chinese Companies that have ties to chinese military. And those that are listed on the new york Stock Exchange. How do you make sure investors have this information. This is a disclosure and it works. If you dont disclose appropriately and one of the things Retail Investors and with that perspective. And we have to take that into account and you take that into account. How much can disclosure do . And with that information is material for us investors . And if you are considering and the fact you may be subject to significant and with my last question. And as we navigate and recently we have been named for the Southern District Us Attorneys Office political for 200 years do you agree its important for those investigations undertaken by the Us Attorneys Office in a nonpartisan manner . Im here is a chairman of the sec. And the work in the Enforcement Division in the independent nonpartisan manner. And to spearhead numerous real changes was that a nonpartisan proposal . Yes or no. And from my perspective im not sure what you mean by nonpartisan. Do you recognize the rule change pass the sec with bipartisan support . I think youre struggling towards no. No im just making sure. No it did not. Was there bipartisan support . No we did not. With a shareholder proposal . As a proposal it did not. And that to expand private markets . For harmonization . I assume you are right. So to call yourself nonpartisan doesnt make it true your leadership at the sec and to be consistent with nonpartisan. And in that approach from the sec so do you agree that independence is necessary and dependent. Going back to partisan a nonpartisan look at the voting record there are many times when i have voted with the democratic commissioners not republican commissioners and vice versa. I vote the way i think i should thats what i would do in any job. And to agency independents i interact with you people independence does not mean isolated but what you think is right based on your experience. Is it possible if you are golfing buddies . I absolutely do. I do my job every day without fear or favor. And i think if you look at the record of the sec. Times have you President Trump golf together . I will not get into specifics. A large number and you have trouble recalling . No. No. Work i have played golf with the president a handful of time. What did you talk about . Those are private conversations. Are you willing to affirm you did not discuss any sec business . There are no conversations that i have had in any way, in any way uncomfortable before you golf with the president did you ask the sec ethics counsel to advise on that decision . Yes. Did they issue a written opinio opinion . Yes i did is the answer. Talk about the prior work at the law firm did you ever look at any securities or other matters . And then to defend organizations like Goldman Sachs . The witness should not be compelled to answer at all the time is expired. And welcome to the information hearing. Actually you cut me off a few seconds early. Correct. May i be recognized. Not anymore. Your time is expired. I would like to offer to allow mr. Clayton to respond in writing if that would be acceptable to him. My question is just to state that again. Mr. Chairman,. The offer is consistent with Committee Rules the hearing record will be kept open usual number of days to submit questions in writing and that would be a question in writing we would expect are relatively prompt response to those that are presented after the hearing that so we do it every hearing. Now we move on. We look forward to reading your answer. This is not a confirmation hearing. We are not the senate. This is the house and to be the role of the senate and somebody would like to participate in that they are more than welcome to run for the senate and participate in the confirmation hearing. The topic we are here for today is Monetary Policy the state of the economy and how we keep the Capital Markets strong during the challenging times we have seen here in a long time. And to recognize and with those proxy advisors and then to get that issue right the sec commissioners made some Public Comments that i believe is evidence it is softening the approach and among other things to suggest it could include a speedbump to eliminate the ability to set it and forget it with those electronic ballots and with this peer review process outlined previously can you comment how the sec but the opportunity to correct erroneous or misleading recommendations that are peerreviewed with a speedbump process and if one approaches more favorable than the other . The issue you are trying to address and then have the best Information Available to you in a timely manner. The process we have now has improved. Thats clear and to create the least friction that the people to vote should have a robust amount of information and to the extent practical it should be accurate. We want to make sure that the system produces that type of information. But thats where im driving is transparency and good information and when will this be finalized . To put it on the agenda so the current agenda is not been completed by the end of the fiscal year i continue to expect it will be completed by the end of the year. Chairman, emerging Growth Companies the construct is a very valuable tool to help start up job creation and innovation they are especially important to deal with the ongoing coronavirus pandemic. Balance sheets as you go further down the spectrum in these companies they almost always have a bit of a hard time. I think by and large each has been able to get financing as well but it is an area that we need to watch because its much easier to allocate capital into the Large Company van to the whole bunch of smaller companies. Thats something with respect to my time, i yield back. The chair notes that i care about the health of my colleagues or at least most of them therefore i urge them all to wear a mask at all times i appreciate it. One thing i hear from companies is that their greatest asset of course is their people coming and i couldnt agree more. Chair man clay ten, i was hoping you could spring why you think understanding the work force is crucial to evaluate the company. Is a personal belief through my professional experience however it is structured in the best way. So yes it is important we have the pending rulemaking ive spent my career working in that arena as well myself along with senator warner sent you a letter last month urging some action to get more disclosure on this. I didnt get a response to i have a little bit of concern i know i appreciate your intense that some of the concerns on the principlesbased approach i believe which didnt require specific metrics. Somebody but spent my career working in the development, i know the companies are obviously already measuring these metrics and the turnover rate for examples is something that is very meaningful. If they give Management Discretion in these disclosures, are you worried that it will result in some unclear information and the numbers necessary for the company to Company Comparison of the company over previous years . This is a good discussion because we are not saying dont disclose the metrics. Disclose those that you use and if the company use is at the turnover calculated in a certain way, presumably they do it because that is how they are managing their business and that is what the investor would want to know. What i dont want to do is adopt a standard across a bunch of industries. It may be right how one is using its not right for others. But i dont want to do is get a compatibility, give up meaningful in this. In terms of establishing the metrics we very much encouraged companies to share the metrics they use but take the pharmaceutical industry and turnover very different from the tech sector and the Transportation Industry and how they look at it. I think that theres an opportunity to work through some of those issues. We are looking at the risk and i would advise you to take a look at the letter i sent to my workforce investment that lays out very specific disclosures that can be required Workplace Safety violations, for example, can talk a lot about how many of the companies are going to get back online or quickly. Moving on, we are running out of time and i quickly wanted to tax disclosures. As we all know they are only paying about half the statutory rate is. I am wondering if you can tell me if you think there is an opportunity to be looking at a country by country disclosures. You actually raise an excellent point. It goes to both points on tax and operational and safety issues. When you have these kind of Multinational Companies trying to give investors a flavor of what happens across the various restrictions its important. Its becoming an increasing part of how sophisticated they look at these companies. I appreciate that and i know we are out of time. Thank you for being here today. In the current Racial Justice issues 50. 442000 billion every day they found day of credit reports and one and 20 errors another 10 million of the errors would be life altering it would create a free unlimited access to their credit reports and schools and ability to use it to compute errors and fraud and secure and track the credit data to increase transparency and help americans boost their credit and Financial Security through the decline and beyond. Are you concerned during the pandemic about the credit issues to have transparency to the credit . It isnt within our authority. I do talk about it a lot because they only sa see two people befe you get caught in investing, understand your credit and get it under control. That is the best thing you can do for your self. With respect to the question about access to credit, we have a consumer driven economy to a large extent. I believe the swift action taken by congress and the fed and the treasury continues to flow and damaged the negative effects of the response. So yes, Consumer Credit is appropriately priced and transparent and importance to the economy. To that point, do you think we should make it easier to get their Credit Information and i know as you pointed out how important the Credit Information is. I would say with a particular policy rationale, legislation and the like, that is not our area. I dont want to tread on other peoples area, but i affirmatively believe that having access in a transparent way is important. Thank you. Our legislation does just that for the Credit Bureau to give people more information and the ability to perceive that. Separately, the network reported that theres been a steep increase in the scams targeting the elderly and other vulnerable communities. That issue has been driven by the pandemic both domestic and international and preying on peoples states during the uncertain times. Millions across the country have been the victims of financial scams. As i believe we should be doing Everything Possible to prevent them from being subject to fraud, particularly financial fraud. Thank you. Other research they did go seniors act a bipartisan bill introduced to my good friend specifically designed to stop them from scamming seniors out of their savings and would you support legislation moving through the senate . Im not going to support a specific piece of legislation here. As you describedit, we are doing this already. We are happy to work with you and follow the legislation of Course Congress tells us to do more we will. But if we are already focused on seniors and making sure they are having access to products that are appropriate and its about the victims of fraud. I think i that is a part of e Retail Strategy Task force. We also have people that are specifically focused on making sure that we have a senior focus. What they try to say this in a way that its important to understand when you look across the accounts into surveillance and the like which is one of the reasons why the year of birth data is important to the oversight. Thank you very much mr. Chairman. Thank you for your time, chairman clayton. If it were up to me, we are nearing the end. A College Student in illinois in my district recently took his life, trading during the lockdown when they saw there was a negative balance of 70,000. He didnt know the whole amount i want to review most of his suicide note that his brother found. If you are reading this, i. E. Embedded. I am dead. A 20yearold with no income able to get a signed almost a Million Dollars worth of leverage. It should have canceled out. I had no clue what i was doing in hindsight. There was no tension to take this much risk. He added 3 million in 2020. Now it is my understanding that they have made some changes to the platform. We spoke about protecting Retail Investors and i certainly share your view that shouldnt take risks that they cannot afford. What are they doing affirmatively to ensure people cannot get exposed like that again . We are looking at this kind of disclosure and a terrible. We need to do something to make sure these kind of things do not happen. I understand as you said you are a disclosure driven entity. I agree 100 . That is what i was saying before. It is only good if people understand. And youve got to be able to make an assessment on whether somebody can understand. If people cant understand in plain english, then we havent done our Market Research venus. I want to turn to what some of my coffee as were racing. A lot less disclosure to the public markets. I spent most of my career running the private equity, complicated structures, very sophisticated people, evil thing. It was hard for me to type and i was the ceo of the company. They are proposing the rules to expand offerings in the private market and given the issues and a lack of understanding can you tell me why we are protecting investors if they are allowing this by people who wouldnt pass the standard of sophisticated investor . I think that they are looking at this in exactly the appropriate way. Right now we have a wealth test or income test to ascertain whether somebody is sophisticated or not. I have long believed that that is not the right test. It is a test we have had is integrated into the ecosystem. Are there better ways to test whether somebody should qualify as a credit investor. Our proposals is one of the ways to think about it is pass the exam. Were you able to sit down and pass the kinpost the kind of exf somebody selling security, you understand things like exposure from options and the like. I believe that that kind of component of the accredited investor test is important. I agree in principle. Let me shift to an area totally outside of your jurisdiction. [laughter] the department of labor issued an information letter to allow the Plan Sponsors to have a component of diversified occasional funds. Is it your view and investor in a plan with allow them to participate in ways that wasnt a straight section 506 and as it is currently written to make that change without you making the corresponding change . The way that that was structured is not directly investing in private equity. I thought that it was structured very well because the fiduciary could pick the fund has a fiduciary with a fund has limited exposure to the private equity. Some of the direct investment by the beneficiary. Im out of time but i would follow up because i think that there is a concern we would have to put in a lot of money in places that were hard for me and the company to understand. I dont want that to happen. Mr. Rudd is recognized virtually. Thank you mr. Chairman. Chairman clayton, appreciate you being here today. Theres been a lot of exciting news around here lately, but i want to talk about the u. S. Accounting standards as a critical component the deepest and most liquid market in the world to operate efficiently and effectively the u. S. Must maintain the standards for the highest quality. This is particularly true in times of instability similar to what we are experiencing during the covid19 pandemic. The standard developed and implemented as an entity which they have direct supervision over. There were already serious concerns before the start of the pandemic and the crisis has only highlighted those further. How do they validate the accounting standards are the significant provisions in existing standards have been subjected to the comprehensive field testing or Economic Impact assessments . So just wondering if i could get your take on that. We should be looking at a performance during this time. A there are two perspectives people have been looking how it operates. One is a regulatory capital perspective and what impact that would have, so i will put that aside. Weve had some significant swings whether different models by the comparable institutions regarded significantly different results. If you are having to financial issuers with the same Balance Sheet or a similar Balance Sheet coming up with different results, why is that happening, and we need to make adjustments. A twotier model versus a oneyear model if somebody is waiting for unemployment in a time like this when unemployment is at a level that no one really thought it would be. So, that is a longwinded way of saying we should look at how it is performing in this time of stress and whether guidance, etc. , needs to be made that its something that we need to look at. Thank you. Does the fcc have any independent assessment of the relations to do or significantly modify the standards before they are finalized for the issue and if so, why or why not . One you are getting at is the relationship with the fact of their independence. We do engage with them. I do believe their independence is important. I think we have a very Good Relationship and we will continue to work with them on evaluating how its been working. Thank you. Would they be open to formalizing through the review process or accounting standards . I think the process as it works today is a good process. I know people are looking at this back and forth and continue to look at it with questions but overall, the process we are happy to continue to discuss that with you. I would like to do that. I would like to continue the discussion. Thank you. Did they conduct investor outreach to validate the standards by decree issued in spaces and if not, would they be open to such a process . This is something that was important to me and asked me book at a desk, ive made it a point to make sure we have the e investor perspective is brought to bear on the rulemaking and they should be channeled to people who are not just the preparers of the users of the financial statements. Very good. Thank you for being here today and i will yield back my time. Thank you mr. Chair for allowing me to be a part of this important hearing and thank you for your service during this crisis and terribly difficult time for the entire country. Mr. Chairman, i also would like to discuss the rate agencies. Thethey came before the committe acknowledged that not all have equal access to emergency funding facilities. As the Credit Rating Agency Reform act of 2006 confirm the Supervisory Authority of the Credit Rating agencies . I want to raise this issue with you today because these facilities do not treat all nine of the rating agencies equally or uniformly. I would like more insight on how the Federal Reserve came up with these standards for the rating agencies and in the testimony theres been some conversation between the fed and the fcc on the subject. Could you lay out a little bit more about that conversation is like and what if any recommendations were made to the fed . I havent been directly involved in those conversations before they give you my understanding of them. I have a high level of conversation with my counterparts. What we have done is if you look across the nine some of them participate in a wide variety of markets, corporate products and the like and insurance, etc. Some only participate in the narrow aspects of the market but have omitted participation in the market. Im going to make up these numbers but they are correct, they thercorrectdeleted or maybe injured were two or three to 90 of the Insurance Industry to do just a few companies we provide that data to the fed and whether they have sufficient experience to participate in the various facilities. Im not actually thinking about the market or where they participate because as i understand, they must satisfy the same criteria. Im wondering what is the internal distinction being made by the senate and is a your opinion but after they register that they should be treated uniformly . This is a really good question, but because it highlights the issue, our registration doesnt qualify them for a particular asset class. Its just a general registration. There could be somebody registered a has no expertise. It isnt a merit analysis. I dont want to speak for the fed because they did a good job at this looking at the portfolio and the rating to assess whether they are appropriate for the facilities. I appreciate that. You may know my bill would have achieved begin a formal treatment. Let me move on to pick up on the conversations that youve begun with the very chilling firing of the u. S. Attorney for the Southern District of new york you said you began the conversation with the administration over the last weekend is that correct . The weekend of the 12th was the conversation. The weekend before the firing of. That would be the weekend before the firing. The question was inaudible. I think we just need to let please repeat the question. That would have been the weekend before the firing of mr. Berman. Yes, the weekend of the 12th. And you said you have had these conversations with others others the first time that was raised was the week of the 12th and im going to leave it at that. Let me be clear on this issue it was a entirely my idea and something that ive been thinking about for several months as a possible continuation of the Public Service after my time. I extended the time for the technical problem of the Ranking Member that is pointed out. I apologize. I didnt have the time are visible to me so i apologize. Thank you, mr. Chairman. Thank you. I will yield back. And now its our last questioner, the very distinguished gentleman from texas ms. Garcia. Thank you mr. Chairman. And as a member of the Financial Service committee and the judiciary committee, who approached you . You said that it was the weekend of the 12th. Who approached you about it or did you approach the administration, i just want to be clear on that. This is not a confirmation hearing. I want to be clear about how this came about. It is entirely my idea and something that ive been in and about and talking with others about whether i could go back to new york which i committed to do and i intend to do when i finish my time here to continue in Public Service. This was a position that was very attractive to me based on my work with the Southern District and my extensive work with the people that were alumni is. It is an Incredible Group of people and they are dedicated to Justice Without fear of favor. This was of interest to me. It came up the weekend of the 12th and thats the genesis for this. Im going to leave it at that. I think that you understand, i understand and you understand this isnt a confirmation hearing, the reality is yo they were before congress and before they can and anytime anybody comes to testify before the congress, they know that they are subject to just about any question and anything and until you run to be a member of congress, i get to ask the questions. Is this line of questioning even relevant to the title or the subject of what the hearing is supposed to be about . The gentle lady from texas is correct. You are a member of congress and it is your time. If i start editing the questions and comparing it to the title and crafting the titles to exclude questions that i dont want to hear, im not sure you will be happy with the result. Mr. Chairman, in the parliamentary inquiry that has been responded to. And if you have an alternative that you want to write s is it going to be the common practice to have discussion on issues outside . It is my practice here to recognize the members and recognized a member of congress who can ask the questions they want and protect their time from interruptions. I will ask the staff to restore about half equivalent of the inquiry they stop oclock when my inquiry started so there is no need to andsign. The train of thought was certainly interrupted so people keep that in mind as we go forward. Im sorry, ms. Garcia and hopefully there will be no further inquiries. You are recognized for the remainder of your time. Well, mr. Chairman, its regrettable hes refusing to answer questions from members of congress and the American People deserve to know some of these questions because yes, he did state earlier that this process didnt require the the reality is when you are a potential nominee or you are a nominee, it is all fair game and the American People have the right to know. This disgruntled employee at the department of justice and those that have testified in the person cases based on the residents personal and political ground and not based on the rule of law for example mr. Zelensky and investigation testified he was told the department wanted [inaudible] because he was afraid of the president and it wasnt based on any other person. Mr. Clayton, should they be treated differently . Let me tell you how we approach matters and how i would approach matters anywhere. It does not matter who the subjects are. You pursue it without fear or favor and do justice and that is the way the people that have worked with me and those of the fcc have performed and that is the right way to go forward with it. I agree with you. Certainly principle involved here, but what if you give an order, do you believe that the president has the right to tell you to ignore the recommendation were dropped charges are or a political ally . Im going to talk about what we do is approach this through our enforcement directors and staff. They are empowered to do what they think is right. If you want to be the attorney general, you said you had oversight and prosecutors. Can you connect to us today to report any political influence or any kind of undue influence coming from the white house or the president or agents to you or your office as attorney general if anything like that occurred the reported to congress . I can commit to continuing to do my job as i have and any other job like it as i have, which is without fear or favor and independence and without inappropriate influence. I think in response to the question, she said you cannot have any discussion or kind of influence is that right . Ive conducted myself and my child in a way that ive not had any improper influence on any enforcement matter, completely confident in saying that. The time of the gentle lady is expired. I wish that i could continue to allocate more time, but the Ranking Member is being asserted here. Questions for the record will be submitted in the requisite number of days which i believe is five legislative days, and we hope that you can get us an answer within a few weeks. Very few weeks to those questions. Mr. Chairman, i ask unanimous consent to enter into the record a june 24 letter from the chamber of commerce from your salty and myself are providing comments to display the text attached to this hearing. Apparently to make this a confirmation hearing that it is on the text of this attached hearing. Without objection the document will be entered. Id like to thank mr. Clayton for his testimony. All members of five legislative days to submit additional questions for mr. Clayton. To the chair which will be forwarded to the witness for the response i ask mr. Clayton to please respond promptly. Without objection all members of five legislative days in which to submit extraneous materials to the chair for inclusion of the record. I remind members to submit your questions and materials for the record to the email address provided to tour staff and now according to the notes, we are adjourned. [inaudible conversations] [inaudible conversations] the opresident ial candidate joe biden met with families in lancaster pennsylvania to talk about health care and the Affordable Care act. Due to technical difficulties, this portion of the event is 20 minutes. The drawback is i can never tell the press reaction completely. Anyway, thank you all for taking the time. Do you mind if i take my coat off