00:00But let's get deeper into this valuation gray zone for just a minute.
00:04Where are the red flags that, where do you think are the red flags?
00:08No, but where you look is when you have a market where there's a bunch of participants
00:14and a large portion of them have it marked at, say, 75, and one or two have it marked at
00:2195.
00:22Like, that's a place where you say, okay, I need to ask some questions about the folks who are marking
00:26it at 95,
00:26particularly if they're making fees off it.
00:29And is that a big area of focus?
00:31I'm asking the question.
00:33To be clear, I'm asking my people to look at that question across the marketplace.
00:40We spoke about this.
00:42Shouldn't I?
00:46We spoke about this a little bit, but there is this idea, at least in the defense bar,
00:51that anytime someone in your seat in your department talks about concepts like marks and bad marks
00:57and valuations, they feel it's more saber-rattling than real action.
01:02They say it's extremely hard to bring any sort of valuation cases, so they wouldn't pay much heat to that.
01:07How do you respond to that?
01:08Well, since I've been at the SDNY, in the pre-IPO space, we've brought a number of cases where the
01:17question of,
01:17you know, how are things being marked, and are they being marked, you know, as a, one place one way,
01:24one place another,
01:25is at the center of those cases.
01:27So we're doing it.
01:29You don't accept that criticism that it's going to be hard?
01:32No, and if you look at, I mean, these are pending cases, but if you look at the cases in
01:35the credit space that are pending,
01:37I'll just mention them by name and then take a step back, but Trichlor, 777, First Brands, you know,
01:43those are cases where they have traditional elements to them, but valuations are at the center of those cases.
01:50When you say traditional element, you mean just accusations of obvious fraud, double pledging, where it's clear as day?
01:57Yeah, I mean, you're familiar with those indictments.
02:00They have hallmarks of the past and some of the present.
02:04You also seem to have a fairly open channel with folks in the industry,
02:07and when you talk about issues with marks or where there might be some problems,
02:14is the reaction that you get, are the leaders in the private credit space, credit space,
02:19trying to steer you away from it, or do they see that as a good thing for you to focus
02:23on?
02:24I'm going to say this.
02:26In all my time at the SEC and in my time in this job,
02:32I would say at the large, well-regulated, you know, they also have the Fed and OCC.
02:39The leadership, the leadership wants markets to be fair and to function well.
02:46They don't want any, they don't want shenanigans.
02:49I mean, that's just, that's just not part of the, you don't last if that's what you have.
02:55So I get, I think I get great support from the large financial institutions.
02:59do as we all get into their baoimiahs.
02:59So we're going to show that we're going to be here to talk about these things right now.
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