the s.e.c. to adopt new rules, to implement the jobs act and it imposes fairly tight timetables and the first of those deadlines expires on july 4th with respect to crowd funding. under recent decisions of the dc circuit court of appeals, the proposed rules that the s.e.c. must adopt shortly, are vulnerable to judicial second guessing. either the dc circuit might find some costs to be overstated, or it might find some benefit to be understated or it might even say that the empirical studies done by others that the s.e.c. is relying on are just not reliable. all this has happened recently in recent decisions. as a result the s.e.c. stands the risk that its rules could be found arbitrary and capricious as this happened on three or four occasions. as a result, virtually everyone affected by s.e.c. rules today under the jobs act has an incentive to sue if they are not happy. they are going to find an attorney, and many are going to go to court this. will result in continuing uncertainty, confusion an

the more regulation the s.e.c. adds, the stronger that regulation, the greater the cost of, number one, understanding what the requirements are and, number two, complying with that regulation, and at some point, if the statute itself hasn't already reached that point, we reach a point where the regulatory costs makes use of the crowd funding exemption infeasible. >> so what are the areas of greatest concern for you, professor bradford in how the law is actually written dealing with crowd funding? what are the number one through -- what are your top-level concerns, you know? number them and tell me the level of importance. >> are you talking about in the way the law is written or in the way the regulations the s.e.c. has to add to it? >> yes. >> oh. >> and i have the rare opportunity, oftentimes before these panels you don't get a chance to answer, but i'm giving you the rare opportunity to school congress, so -- >> my greatest concern is in the disclosure requirements imposed on issuers, particularly some of the acc

the s.e.c. in 2009 for insider trading because the regulators alleged he had publicly pronounced his company healthy while privately arrived at the quality, using words like toxic and poisoned and internal empmails he seemed to understand well the risks his company was taking in the subprime mortgage boom. but publicly, meanwhile, he maintained first class and financially sound. all the while he was selling shares that he had received as compensation while running country wide. in fact, he told 500 million wort of stock over several years time as the subprime crisis was approaching. the s.e.c. said that he sold these shares improperly because he knew the danger that were facing his company. and yet, a year later in 2010, the s.e.c. struck a settlement deal requiring him to pay just $22.5 million to tind case. that's $22.5 million against 500 million in stock sales. that's a pretty good trade. i think most of us would take that. meanwhile, the rest of the fines that were levyeed by the s.e.c., 45.

until the s.e.c. n win back the won if i dense -- and it's going to have to do that through more enforcement, bigger cases, the likes of which it hasn't had in recent years. >> see, there it is, actually. the desire to play up and constant and attention to them, why the enforcement division has twice as much money with all of the other divisions in the s.e.c. what congress ought to be doing is making sure that they are truly doing their job and not just pumping money into the enforcement division. the real problem here, of course, is that the entitlements is damaged and as you were saying in the previous segments, they are eating up everything in the government and we have to keep cutting or at least not increasing payments to all of these organizations, including, for example, nasa. why are they cut? for the same reason that the s.e.c. is cut and the cftc. we don't have the money. we are borrowing a trillion dollars a year. >> where we agree, the s.e.c. does need to spend it on better surveillance. >>

then the s.e.c. comes along and they say investment banks can leverage at twice what commercial banks were, 40 to 1, and that's not counting their off balance sheet things. so the investment banks started to buy up the loans, and buy up the lenders, because now they can put the securities they don't sell right on the balance sheet. this whole stuff about proprietary trading accounts really had nothing to do with that. they were doing what i did in the '80s, '90s, had to park these hard-to-sell assets someplace that retained interest and even the mezzanine. and who determined the price? well, the s.e.c. says well, we'll leave that up to the traders. so the traders could book what i would say were virtually worthless assets and booked them at par and then they booked huge yields on them they haven't earned and then they get multimillion dollar bonuses every year. $10 million a year was not a big deal for a trader. but nobody made any money yet. the commercial banks were doing an on balance sheet and off

because of that i believe the s.e.c. crowd funding regulation should be as light-handed and unobtrusive as possible. in the name of investor protection, the statute already imposes significant regulatory requirements on both crowd funding issuers and on the brokers and funding portals who act as intermediaries in crowd funding offerings. adding additional layers of regulation on top of those requirements would increase the cost of using the exemption without much additional benefit and would also be inconsistent with the thrust of the jobs act, to reduce the regulatory burden on small business capital formation. second, to the extent that any additional regulation is required, it should be imposed on crowd funding intermediaries, brokers and funding portals rather than on the entrepreneurs raising funds. crowd funding intermediaries will be more sophisticateded and more heavily capitalized than the small business issuers engaging in crowd funding. those brokers and funding portals can afford securities council to guide th

., the historical process that s.e.c. issued to foreign issuers. unlike in the case of the foreign private issuers, in the case of emerging growth companies under the jobs act, they are required to provide the original submission plus all amendments that resulted from the s.e.c. process approximately a month before the ipo will price. so all the information ms. buyer was referring to is publicly available in sequence, and investors will have a month to pore over all of that information. >> let me ask you another question there is the presumption that the jobs act has -- proponents would argue that it reduces cost. in fact, estimates i think of 30 to 50% of the costs, i think that's when you were suggesting in your testimony, where are these cost savings come from? investment banking fees you believe would be lowered because there is not the requirement to do these elaborate road shows? is it because information -- where are the savings coming from? >> it's princecally mri from two sources. the data is based on surveys of p

as soon as we get approval from the s.e.c. e components of the accommodation is we get $3 million on the existing poll tea and 10.7, customers get that in immediate cash as soon as we get approval by the s.e.c. >> i want to ask you about this $40 million fund in a moment. but where were you at this point? who is in charge here? you were in california. we saw shots of you at the opening bell with all of the facebook people. you're second in control, he was in philadelphia. this was the biggest ipo in your history. >> certainly people who run the operation day to day were in charge. we have several open lines going. one is an open line to our customers, a separate open line internally to nasdaq and there was rampant communication going on through both lines. that was the way to do it. >> understand, it's important to note, this ipo, we've done it 455 times before quite successfully. the technology people had to make some real decisions and the senior management is not in a position to question the information of that decision, to

the s.e.c., it was shocking how poorly the s.e.c. did its job. >> exactly. and that's exactly my point here, is that you had regulators from the s.e.c. and the ots to the federal reserve, and each one of these institutions were regulators involved with starting from bear stearns on out. the regulators had the authority. they had the information. they had the wherewithal to try to prevent the meltdown in '08 so we would not find ourselves in this situation today. but the regulators failed to do the job. so whereas your testimony likes to point the finger entirely at wall street and the free enterprise system and capitalism for failing and greed over there, i think we can equally point the finger back at the regulators who are sitting in these companies. they failed to do the job. >> the solution isn't to end regulation or to put in people who won't enforce the regulation. >> and i appreciate that. but as you can see from the -- both in this committee and financial services there's not a single republican who has ever said to end regulation. everyone simply sa

she was back in the game. >> narrator: days later, investigators find their smoking gun. >> the s.e.c. lawyers found an i.m. that had roomy khan saying to raj, "do not buy polycom till i get guidance." polycom is a video-conferencing company, and guidance means the direction that their earnings are gonna go -- up or down. it seemed like very specific inside information. it was like the one moment when rajaratnam could not get his source to keep it vague on i.m. that should have been said over the phone, but she was trying to get it to him quickly and she said it on i.m. >> narrator: agents subpoena phone and trading records. they discover calls to a polycom employee, khan's apparent source. >> so, they began to build up this circumstantial case of -- of phone records showing that they were talking, trading records showing that they were trading the same stocks and making a lot of money on them. >> narrator: it's a huge break, but investigators believe the case is still too circumstantial. what they need is one of rajaratnam's informants to flip. >> they have roomy khan. she was going

>> yeah, when you came to the s.e.c. three years ago, the agency's failure to detect the madoff ponzi scheme was this giant cloud that hung over the agency and i'm wondering to what degree do you think the s.e.c. has recovered from that tarnish on its reputation. i think the agency responded in exemplary fashion to both the madoff revelations as well as the financial crisis. i mean, as you would expect and any entity public or private, we took a hard look at ourselves in terms of what we could do better and the result of that was the enforcement division under one of the most significant restructuring in 40 years created specialized units to focus on priority areas, flatten management, create corporation programs to get earlier, better evidence of wrongdoing. created a c.o.o. function to handle in a better and more efficient manner a lot of administrative and other tasks so that -- so that the investigative staff could spend more of their time doing that. a lot of reforms across the board, great deal of talent was availab

i'll give you a briefly a couple of things that the s.e.c. alleges. fraudulently approved $113 million in loansrom his hedge fund. that he advised and manipulated to pay his personal taxes and he and two managers manipulated the price and availability of a series of distressed high yield bonds by engaging in a kind of short squeeze, of those bonds. that's the market manipulation allegation. that he granted, offered and granted favorable redemption status to certain influential clients at the expense of others. that's the allegation that has to do with betrayed clients and engaged in illegal trades in connection with the purchase of common stock in three public offerings after having sold the same securities short during a restricted period. again, mr. falcone contests these allegations. and we'll endeavor to find out more as the afternoon continues. folks, back to you. >> continuing to watch that. thank you very much, tyler. >>> just ahead, weird and wacky etfs. herb's been counting them down all day and joins us next with the weirdest of them all. >>

so what looks as if, and we are talking about the s.e.c., we will go this, some of the s.e.c.ools will not go on the road play anyone or will not schedule a big team like texas and the rebels we could get more big matchups with chances for great failure or great success. >>jonathan: which will improve the ratings and everyone will be happy. that is the point. there are millions and millions of dollars involved. >>shepard: i will let you know where and when the peter funeral will be. >>jonathan: and mine? >>shepard: we are playing texas a&m, and texas and the regular s.e.c. schools. >>jonathan: by good? >>shepard: longhorns only have a budgets bigger than this building. hook 'em horns. why not make lunch more than just lunch? with two times the points on dining in restaurants, you may find yourself asking why not, a lot. chase sapphire preferred. >>shepard: a new plan in the works to legalize marijuana and put the government in charge of selling its. not here. lawmakers in south america company of uruguay are debating the measure which makes their government the first in the wo

so far, what we can see is that the s.e.c. disclose more about the nature and number of its users, also the impact of zinga to facebook's bottom line and the impact of mobile use on customers and the impact of that on facebook's revenue and bottom line, guys. so 589 here to digest, but we're getting a look at exactly what the s.e.c. was asking facebook to disclose in advance of the ipo. and ta gives you a sense of why there were maybe so many amendments to facebook's filing before we did see that ipo, guys. back to you. >> ayman, any read on how far these correspondences go back? >> the earliest one i see here is march 17th, but that is to say -- no, i'm sorry, i have one here, february 28th. so it's the early part of this year and basically it's the ongoing dialogue. this is automatically disclosed 20 business days after a company goes effective. that's a standard thing. and i'm told that basically what we're looking at here is the kind of correspondence that would happen with any ipo, the s.e.c. is very careful to review what

according to the filings, with the s.e.c., the securities and exchange mission. michael, is this going to stick? i ask that question because bain has been an issue. the charges of vulture capitalism in the beltway, you hear people say they didn't play well, yet out in middle america, and in focus groups, i think you get a different reaction. what will be the reaction to this? >> i still think we're at the very beginning of this conversation. mitt romney so far is sticking to his line which is i have experience in the private sector. he doesn't want to go beyond that to discuss specifically what he did at bain. the obama campaign is determined to hit them over and over again all through the summer and they have had some success in these swing states doing this. i think this is just another piece of that. romney's going to have to be able to establish a difference between his experience in the private sector, which is not about creating jobs. i think everybody admits here, it was creating more efficient companies, about increasing profits, and lowering the cost of

he was the s.e.c. pitcher of the year and all-american. he went 11-2, with a 2.38 e.r.a.ouple of local pitchers were first-round picks today. kyle zimmer, number five overall selection by the royals. and mark appel goes number eight to the pirates. mark appel, who a lot of people thought would be the number one pick. but he gets a steal at number eight. >> thanks, scott. ♪ i'd like to thank eating right, whole grain, multigrain cheerios! my bowl, my spoons! mom, are those my jeans? [ female announcer ] people who choose more whole grain tend to weigh less than those who don't. multigrain cheerios has whole grain and 110 delicious calories. looking good never tasted so good. ...more grains. less you! multigrain cheerios >>> we've been following breaking news in oakland all night. a standoff with police is still under way. a hostage situation. cheryl, what do you know now? >> the streets are still blocked off. leading to the location. where the hostage situation is taking place. this started after 8:00 this evening. alameda county sheriffs spotted a stolen car. tried to pul

five investigations into these losses from the federal reserve, the controller of the currency, the s.e.c., department of justice and the commodities futures trading commission. >> susan, thank you so much. >>> there are growing calls for a special council to look into recent national security leaks. attorney general eric holder testified before the senate judiciary committee yesterday. he has pointed two u.s. attorneys to investigate. the leaks concern an al qaeda plot. senator john mccain said the white house leaked it for political gain introduced the resolution calling for a special council. >>> the wife of the man who said he shot florida teen trayvon martin has been charged with percentage. authorities say shelly zimmerman lied to the judge during an april bond hearing for her husband. george zimmerman was freed on $150,000 bail. earlier this month, zimmerman's bond was revoked after the state argued that the couple lied about their finances. take a quick break on a wednesday morning. stalker violence. a bitter rivalry between poland and russia gives way to bloody clashes before the

the s.e.c. reports are due in the middle of the month. if you look at california up until now, it is the number one donor base for him. in addition, these celebrities are really important because they may well become his replacement for the businessman billionaires who are giving to the republicans. so you could easily see, you know, sheldon aidleson, the casino giant, and jork -- george clooney matching him. when you see where are its priorities, the democratic super pac going to get its money? in all likelihood, it's from hollywood. gwen: finally tonight, you may have been reading about it all week, tales of secret plots, cyber-warfare, and frayed relations with old allies, , all contained within the pages of david sanger's new book, "confront and conceal: obama's secret wars and surprising use of american power." because this is washington, the debate quickly turned to the "how" of the story. how did david learn all this stuff? >> it compromises our national security. for this reason, regardless of how politically useful these leaks ma

john is well-known for a distinguished career and his distinguished service as director of the s.e.c.'s division of corporation finance, a disclosure regulator. but earlier in his career, he worked for a state securities commission, a merit regulator. his co-workers proudly refused to approve the shares of an untested, upstart company whose name today everyone in this room would recognize. they had rejected that company's request to sell shares to residents of their state, because the ceo's compensation was too high. what was the ipo price, john asked them? answer, $22 per share. well, john responded to his colleagues, the stock is now trading at $60 per share, so how exactly did we help investors in our state by preventing them from buying at $22? that anecdote sums upper writ regulation, and it highlights the benefits of a disclosure regime that let's investors choose the winners and losers. the third point i want to make is about disclosure, and what information companies must provide to investors in a regime that takes the path of disclosure rather than merit regulation. the tried

probably one of the most important derivatives markets, and we pay a lot of attention to it, as do the s.e.c. and the cftc, who have a lot of the jurisdiction over those swaps. i think it's important to say first on one hand that those numbers that you cite greatly overstate the actual exposures that the people involved in the swap are facing. those are just notional values. it's also true that interest rate swaps are typically among the most straightforward and simple to understand of derivatives so that many of them are vanilla swaps that are pretty easy for regulators and for participants in the market to understand. so in some ways it doesn't pose the risk that the credit fault swaps during the crisis posed, for example. all that being said, you know, i agree with the general thrust, which is that we've seen that over-the-counter derivatives can be dangerous, and following the spirit of financial reform from this congress, we and our fellow regulators are working to put as big a share as possible of swaps on centrally cleared central counterparty-type exchanges and to increase the transp

committee has heard from the occ and the fed, which are the primary regulators by jpmorgan as well as the s.e.c. and fcc and other relevant officials to learn and review these events. several members of the committee have asked to hear from mr. dimon and due diligence conducted by my staff i decided to invite the regulators informed the committee that there was a breakdown in the risk management involved with these trades despite the fact that the trades were reportedly designed to reduce the managed risk as they continue to look into the matter that the firms solvency and stability is not in jeopardy at this time. while this is welcome news, questions remain that must be answered if we want our banks to better manage the risks to maintain financial stability as i believe they do. today marks the two-month anniversary of incumbents where they downplayed concerns for the initial reports of the chief investment office trades. we later learned our out of control trading strategy and i've said before a letter explained we've made an egregious mistake. there's no excuse for it. we know where we are

it's a report up requirement if you're involved with the s.e.c. and their requirement, mandatory requirements. that's the first time the government ever -- and that's across the board. that's every where. not state by state. it trumps the state the. that's the reason that the aba accepts these more rigorous rules in 2003. they are so terrified of the government coming in and regulating the profession. the point being it is our job as lawyers to regulate our profession and we don't at our peril. >> at the suggestion of john edwards. >> john edwards suggested that. >> professor? >> let me go back to one of the consequences of watergate, which was the requirement that law schools train lawyers in professional responsibility. do we have any way of knowing what difference or how much difference that has made in the way that lawyers behave? >> i think every major report on legal education in a sense this requirement has come in has criticized how well we're doing in that area. and certainly i think we're doing a lot of good things in that area but the mo

that's what they were doing the s.e.c. and cftc with mf global while taking money out of customer accounts and not saying anything or raising an alarm and here you are saying you are starting an investigation and i thought that's the reason you had people on location in order to watch what's going on. you have 65 people. you say in your testimony that key risks are what you're monitoring and yet mr. alvarez finds out you didn't call and tell him. he's alarmed with changes. what are we doing here? why do you have people on location? at least we are finally worried about -- seeing recent losses and that's revealing certain risks. the entire nation is aware of those risks. what are we doing if you are supposed to be regulating? you have on-site teams and now we are starting an investigation and the investigation should be that you are talking to your people who are on location to find out if they're doing their job or sitting there with feet on the desk drinking coffee. from this side of the table, we ask you all to do this a

last month i asked the s.e.c. chairman if it was possible and they said with the new information to be reported under dodd/frank we can set up early warning systems to identify the risky positions before they blow up. so my question goes to both you mr. tarullo and any others who care to add their opinions what can and should regulators do to improve their ability to identify potentially risky trading ahead of time. i understand foresight is a gift, but at least at a certain level of money that a bell could go off and maybe it is a perfectly plain vanilla safe trade and maybe it is not, and not ask you to get involved in every single thing that the bank is doing. so first to mr. tarullo and mr. curry and anybody else. >> well, first off, the risk management of the firm overseen by the supervisors and should include things like position limits. that should be a first early warning. secondly, senator, we do already within our supervisory process look at market indicators including aggregated market information to try

their internal processes for preparing -- >> if you are going to make a statement say on behalf of the s.e.c., don't you ask your people is this a fair representation? >> yes, i do. >> so there's a certain amount of duty to do that? >> well, again, the duty under the federal securities law is to speak completely and truthfully. how people arrive at what they decide is a truthful and complete statement is a matter of their internal deliberations and discussions i think. >> thank you. >> thank you, mr. chairman. mr. chairman, first i would like to point out that anybody who is interested in breaking up these large institutions should sign on to hr-1489 which would rei reinstigate the bill which i opposed repealing. the beasts of wall street have come into existence. anyone that wants to or some other idea on how to limit the size, i agree with that concern. to the panel, i would just like to say that the comments for transparency are appropriate but in preparing for this hearing, this is very complicated stuff. very difficult stuff. i try to read as much as i can. the problem is on this partic

increased supervision, and that you are functioning under a budgetary restraint, particularly i think the s.e.c. and cftc. your workload has greatly increased and your budget doesn't reflect this. >> mr. chairman, parliamentary inquiry? are we going to hear the opening statements? >> yes. we'll do that right now. right now would be great. >> you seem to be making -- >> no, no. not at all. i was just introducing the first panel, thanking them for their attendance and -- it's the prerogative of the chair. >> oh, no, mr. chairman. the chairs are under the same time limits as any other member. >> i'm saying if in introducing the panel, you wish to protest -- all right. we'll go forward and remind the witnesses that without objection, your written statements will be made a part of the record and you will each be recognized for a five-minute summary of your testimony. our first panelist is thomas curry, comptroller of the currency, and this is your first appearance before our committee since you were sworn in as comptroller in april. we look forward to a productive working relationship with you, as w

that one was a result that the s.e.c. was simply sitting on its hands and ignoring the obvious evidence that was out there. the enron corporation debacle to me was just outright fraud. that is always illegal. so i don't think regulation's going to solve our problems. >> this is a change of topic. people are paying most of their taxes to the federal government rather than to state or local governments. do you think that's the right balance? should we shift in the long-term toward more taxes going to local governments rather than federal governments? >> you know, for a century now there's been this huge pressure of centralization in united states which i think is really problematic. if you look at total government spending in the united states oot it's 70% federal and 30% state and local which is rather astounding. it should be the other way around, in my view. the federal government should have some basic functions that we all agree with and we ought to leave a lot of stuff like infrastructure and education to the state and

they say as the s.e.c. knows and the court will learn, investors were harmed by any conduct is just irresponsible and also completely unsupported by any evidence. that's the latest that we found out so far. back to you. >> thank you, mandy. >> back to our guests here, peter sorentino, all of this being discussed just plays into the hands of those that want to see greater regulation through dodd frank, do you agree with that? >> the problem with the greater regulation is that the laws get passed but the regulations don't get written for some time, and that cripples the industry, you can't have a health industry with a crippled banks industry. we need to make a decision what banking should look like. get to that point. if we have to go back to the old glass -- where we separate the functions, let's sdo it, but we handicapped the entire industry. so we need to quit this drawn out process here, and get to a final resolution of what authority will rule the banks, how it will be done, and let's get it over with. b

if they're back to their old ways, look to dodd-frank as a way to stop it, look to the s.e.c., the federal reserve. what i did was really a congressional populist revenge on t.a.r.p. bailouts. if we're bailing out these seven companies and only these seven, we ought to fix their pay. so it was a very narrow mandate to begin with. >> but you talk, the book is fascinating. one of the things you talk about is almost the psychology of ceo pay. i will read an excerpt. you write compensation mirrored individual fulfillment, that without generous pay, company officials would view themselves as failures. individual success could be determined only by comparing oneself to the competition and dollars paid would be the deciding factor. by comparison, family, friendship and community respect paled in significance. when something is that deeply ingrained in a culture, you know, katrina, i would love to hear your thoughts on this, how does regulation even compete? >> that's what made it so emotional. it wasn't just about another car or another summer home or sending your kids to private school. it was l

it says if the s.e.c. won't act it will take crossroads to court. no bs, authentic, the real thing. >>now, let's hear yours at the only online forum with a direct line to stephanie miller. >>the only thing that can save america now: current television. >>join the debate now. [ ♪ theme music ♪ ] ♪ katrina and the waves ♪ >> announcer: ladies and gentlemen, it's "the stephanie miller show." ♪ i'm walkin' on sunshine ♪ ♪ i'm walkin' on sunshine ♪ ♪ and it's time to feel good ♪ ♪ hey, all right now ♪ ♪ time to feel good ♪ >> stephanie: it is "the stephanie miller show." welcome to it. six minutes after the hour. 1-800-steph-12 toll free from anywhere. you can e-mail us there, like ted in sunrise california did. steph, so glad the show is on current. we currently is no progressive voices. >> stephanie: because there's no market for that sort of thing except we sold out sexy liberal in no time. i'm on disability and watch along with my dog jazzy a is 7-year-old terrier. i attached a picture of jazzy. jazzy is a good girl. >> myiaz is a boy. >> stephanie: j

a man and a company in the thick of one of the most intensive investigations ever undertaken by the s.e.chat is one of the great bites i've come across. a guy who gives you just what you want to hear. why would you take a big risk? because he was going for the big kill. the american presidency. he said it before, my father taught me to make a lot of money before you run for office. >> having studied mitt romney's career, i think that's absolutely right. you can make some money by nurturing the young companies. make the big killing on pred predation which he was moving from. >> he's not interested in crumbs. >> no. he wanted the big scores and we wanted the money from drexel to help him do it. i think it's utterly consistent with that mitt romney's life long plan was and he wanted the big money. he wanted it for an ultimate reason. which is to do what his dad couldn't do, which is become president. >> beth, back to you again. in terms of bain, what makes this a story that keeps giving? it was your paper that broke that story today. congratulations for the globe, of course. i mean that. "th

the group massachusetts forward was forced to refile with the s.e.c. it originally spelled "massachusetts" with only one "t" and five "s"s. rule number one, make sure your own name is right on the paperwork. >>> our top story, jay carney is vigorously defending president obama invoking executive privilege regarding some documents in "fast and furious" probe. house speaker john boehner vowed to push the full house to hold attorney general eric holder in contempt of congress next week. chief washington correspondent james rosen looks at how this president's use of executive privilege compares with another much more famous case. >> on capitol hill -- >> there is no coverup here >>> there is no 20 minutes of a tape that has been wiped out. >> and at the white house -- >> do you think that didn't know -- there is no known coverup? >> absolutely. >> debate over president obama's assertion of exective privilege in "fast and furious" carries echoes of watergate, when republican president nixon clashed with the democrat controlled congress. nixon invokeed execut

the campaign is rifled through donors' divorce records, they the i.r.s., the s.e.c. other agencies going after contributors. trying to frighten people, intimidate them out of exercising their rights to participate in the american political discourse. which is being done these days by a lot of different groups and no longer are they all on the political left. now there is more balance to it. of course, the temptation of anybody in power is to try to silence your critics. one time point on this, the president political advisor david axelrod said the president even wanted to amend the first amendment. for first time in history to make it possible for the government to determine who gets to speak and who doesn't. >> chris: wait, wait, wait. when you say amendment the first amendment, i think he was talking about trying to find some response to the citizens united act, right? >> precisely. >> chris: they wouldn't actually literally amend -- >> yes, it would. it would carve a niche out of the first amendment saying that it's possible now for the government to control politi

how about the s.e.c.? all legal. either way, greed on the part of facebook or stupidity on the part of morgan stanley, the individual investor, you would be the loser. and you stay the biggest loser. maybe the 13-year-old and under crowd will help amelorate the downturn but it's too little, too late to help the individual investor, who is supposed to be the lifeblood of our market. just a shameful exercise all the way around, including morgan stanley's admonishing of the buyers who believe the bankers had it right when they most certainly had it wrong. >> coming up, bottoms up. could this market have finally found a floor? or is there a trap door still lurking? cramer's putting the technicals to the test when he goes off the charts. >>> and later, good medicine? medical innovations are helping us fight chronic diseases and live longer lives. could seattle genetics product pipeline of tumor terminating technology help curb cancer? cramer gets the details from its ceo. all coming up on "mad money." [ whirring ] [ creaki

unfortunately, they are probably going to get that downgrade and they've already said in their filings with the s.e.c. that their collateral would have to go from 160 million to almost as much as 2.4 billion. >> you know what, though? broadly speaking, though, what's the business model here in terms of these businesses? most people will tell you that the equity businesses that most of these banks are losing money. so what's the catalyst to turn this around? volume is deadly. volatility is deadly. retail investor, dead in the water. how is this going to reverse? >> i don't think that there's much good going on. obviously they got careened on that facebook deal. the only group that i hear are the financials gearing up and, who knows, they may be dropping those pretty soon. >> fred, do you find it at all troubling that gorman himself says it's going to be a two notch but yet the way you speak, it's going to be a foregone con cushion that it's going to be three. >> after the moody's reports, all of the large banks will get the maximum downgrade. he made good points about the liquidity. at the end of the