there are still so many an answer questions now one of the firms of regulators the chairman of the c f.t.c. its name is gary gensler he's on the hill this week asking for funding before appropriations subcommittee but what about the job regulators have done with. global that's what we want to hear about to answer some of our most pressing questions we have bill black william black associate professor of economics and law at the university of missouri kansas city he is a former regulator and he was director of litigation during the s. and l. crisis do you know that. means that means on his watch bankers were prosecuted and locked up so he is going to help us break down these unanswered questions we have and light of this person professor black thank you so much for being on the show and you yeah absolutely so i want to start i want to talk about the regulator one of them at least and the way this bankruptcy has been handled professor black first i want to play the justification gary gensler the chairman of the c f.t.c. gave for the way this bankruptcy has been handled let's play that. my kn

handled professor black first i want to play the justification they carry guns or the chairman of the c f.t.c. gave for the way this bankruptcy has been handled let's lay that. my knowledge of this from. once it's a choice broker to their futures commission merchant and there are securities customers at risk the way to go all interaction is. the securities commission and ship can put it into a separate trust. ok now that sounds like a bunch of gobbledygook but basically reportedly gary gensler the chairman is the f.t.c. one along with the way to see if the f.t.c. excuse me wanted to have this treated as a chapter eleven bankruptcy versus a chapter seven with what's known as a simple liquidation which he mentioned for the brokerage part of the business now i am not a lawyer but the takeaway for us about this is that what this did is this allows creditors and customers to be on equal footing or it's unclear versus prioritizing customers to get their money back now my question for you and a case where so many months customers with money in segregated accounts saw their money go missing and gary

and the c f.t.c. for a few years each time for various issues that he settled over one of the things that really stuck out to me is and in those situations he never had to admit wrongdoing he didn't have to admit guilt or deny and then he's back to practicing in the financial industry not something that we've seen again and again and again so i'm wondering from you who has been covering this industry for years and really you know seen this all firsthand are the same practices going on when people don't have to admit or deny guilt they just go back to business as usual. i think they are fortunately you know in this situation you can just go and start another business overseas the u.s. regulators can stop you but maybe other regulators can't so i mean i personally believe it's going to have to be the market is going to have to police itself. i don't have a lot of faith in the c.f. t.c. or the f.c.c. or sometimes even the deal j. right now to stop to put bankers in jail yet when they've clearly committed

the customers that you are working to help in sending questions to ask gary gensler the head of the c f.t.c. that you get your wish list that sort of thing my question to you what is your sense of how much members of congress and lawmakers get this really understand what's going on and care you know well it is a complicated area there aren't that many people mostly come from. our cultural background who have worked in this specific corner of the financial industry the know much about the futures market and kind of the other side so to speak has been a pretty good job through their lawyers and leaking information etc but this is all just a confusion possibly an accident no criminality and so i think many congressmen have kind of avoided it for that reason why i do want to thank chairman oga bauer and the members of this specific committee the house financial services committee the oversight subcommittee in particular has been the only place in congress and i would say in my opinion the only place in the whole u.s. government that seems to care about this situation about justice for customers

treasury secretary of the bush henry paulson where was it from goldman sachs who's the head of the c f.t.c. gary gensler is he from goldman sachs who knows obama's chief of staff told a little while ago oh that was the daily wizzy from j.p. morgan chase who's the treasury head over there in canada oh he's from goldman sachs who's the head of the european central bank now drug you guys chairman of the european division of goldman sachs yeah i mean what is it take a six year old to figure this out the merger of state and corporate powers is clear fascism and it's right in front of you norman sacks us says there you go and gerald you know the ball workers well people whose money has been frozen disappeared been stalling and don't know if rand are going to get it back you have people that are betting on this and they're investing on the carcass of m.f. global in fact it was the third most traded bankruptcy case in february after lehman and lehman former brokerage so investors think they're going to make big money on this a. yes some of our i get all these mailings from these different firms th

the volcker rule in particular is a number of different agencies the fed if the i c c c c c c f.t.c. every letter of all of those except the fed if the president said do it it would get credit for it so why isn't it getting it's not getting done because. because there are a lot of pressures that are that are effectively brought to bear primarily via congress on these agencies for instance to see if he sees budget. their their their jurisdiction. triple quadruple. their creditors try to and they take care of derivatives right which is this three hundred just really want to start out exactly so you think maybe people that you did invest a couple bucks in in fact what's happened is congress has has squeezed them hard on their budget so there's this dynamic that goes on and it continues to go on which is a fight between the regulators in congress how do we get the american people to be the wind behind the back of the president and others who would like to resolve this problem when the even just you know. alphabet soup of acronyms. how do you reduce this to a bumper stickers of something

six days later she resigned her position as head of the c f.t.c. and five weeks later became a member of the board of directors of enron making millions ken lay's enron men set up over two thousand subsidiary corporations over eight hundred of them offshore and evans and begin jacking up the price of electricity especially in california ken lay had a secret meeting with movie actor arnold schwarzenegger and shortly thereafter california was in huge trouble as was its governor gray davis we all know how that played out meanwhile wendy's husband u.s. senator republican senator phil gramm got over a million dollars for his senatorial campaign from enron push legislation in congress to do regulate derivatives so that enron and other bankers like goldman sachs could make billions with a b. in profits within one year after graeme's bill passed in two thousand enron's wholesale revenue quadrupled to over four forty billion dollars and other banks are starting to get into the game and runs bets took them down there was no government bailout for enron when

f.t.c. is expanding its m.f. global inquiry and it's got what looks like its first victim popular contributor to c n b c r fisher.but the legend around all these unless you know show this he knows he's a legend they say you're a legend when you go and i'm only fifty god like seven years ago when you saw the tree when you were like thirteen so there it was on c. and d. c. ok fisher's m.d.f. clearing corps has allegedly been performing the same activity m.f. global engaged in is being sued by the c f t c and there is a saying that he didn't segregate customer money from his own accounts but apparently this just came out as we've had a chance to look at it but apparently he pulled money and put it into j.p. morgan during during during and after the financial crisis for about two years and he didn't take care to make sure that those accounts were segregated were taken morgan would have been able to use that money for their own positions or whatever it is so i think this is this is really interesting this week are getting more of these probes and i think it also speaks to the whole thing about the mainstream media who