One more of a Market Structure issue. Thank you, very much. The time of the gentleman has concluded. The next two questioners, i believe are both voting, and at the suggestion of that we are going to take a ten minute recess and then we will reconvene. When epidemic first hit, my district in new jersey was in the eye of the storm. The second highest rate of cases in the country, and supply and protective gear was uncertain. Health care providers and the supplies went out of in a matter of days. I call in this administration to use the defensive protection act, americas 90 factor in the past equipment it is ready to keep fighting the pandemic. Using the da is crucial and fighting against covid, i was just surprised as many of us when the International Development finance corporation, the fc, announced that they would issue their first to be a long board, what 755 million to kodiak, who is not even a pharmaceutical component. The dpa finally you utilize for something that has left bankruptcy, with a success in pharmaceuticals. I dont trust him with such an important task. Frankly, its a joke. Still we know who was not surprise, coated cbo who purchased shares of the company leading to the announcement. And receive 1. 5 millions and stop actions from the coated board they before the announcement was made. These top options may have been worth as much as 50 million, just a few days later. I hope this letter to the committee and the sec will urgency transactions in the market movements, and i will hear the sec is open investigation as the investigation of the origin of the loan. Knowing the circumstances around alone, and working with a clyburn insiders, and the early lead of the announcement, which is say there is a potential here for unlawful Insider Trading . I would go beyond that. I think in terms of were talking potentials of violations, i think there is a potential that the sec could find a range of Violations Including in the disclosure reena, in terms of trading, in terms of possibly even individuals involved in manipulation. We dont know. And i think the fundamental issue from my perspective its that we have to get the difference to the sec, to allow it to conduct its investigation. I also think that we have one of the things that we have to do, we talked about the specific security laws violations. If we go back to Insider Trading enforcement, in the 19 seventies, 19 eighties, through the 1990s, those cases primarily were allowed by the Southern District of new york. Charging that is wire fraud, male fraud. So there is also a broad range of federal criminal statues that could potentially apply even if there may not be a specific sec Law Regulation that could fall into the scope of violation. So, in terms of the potential scope of the investigation, i think its real, i think as i mentioned earlier, if you look at the questions that are posed by the internal investigation, by outside counsel, they are very narrowly framed. So i think that the committee, good point, there is still plenty for the sec to look at. And there is a potential for the commission here for the Endorsement Division to find and recommend enforcement action, but only time will tell. Thank, you sir. Thank you, i appreciate that response. Which you discuss a little more dont this causes shareholders and potential harm here, shareholders and Capital Markets, and the taxpayers . If you direct that to me, yes. The issue is credibility. I actually have to go back to the language of the 33 act. If you look at the preamble of the 33 act its an folders closure, the character security sold the interesting for congress to the males to prevent fraud in the sale. Anything this committee is doing in a bipartisan level very much directed towards and i supported fully, its directed towards enhancing disclosures to ensure that there is a level the ability for the public for participants to have confidence in their markets. And i think that continues to be really the core issue, credibility, transparency, and confidence. Thank you. Our country, clearly on the cusp fear of many questions that we need to get answered to. Where i live, we are home to so many live Science Companies who have decades of experience of success, now its not the time clearly to place bets during a Public Health crisis. On unproven entities and the nations in this pandemic. And i strongly agree that corporate should not profit from the allocation of resources. So i look forward to our continued oversight. I thank you very much for being here sir. Thank you. I now recognize the gentleman who brings extensive security law experience to the service on this committee. Mr. Casten, youre recognized for five minutes. I apologize mister chairman, i did not recognize that i had all of that expensive security, i didnt realize you are talking about myself. I thank you so much, mister chairman, and i thank you the witnesses for being here. I want to start just by making three statements that i think are just factual and should be fairly non objectionable. Capital markets are not moral, Capital Markets are not immoral, Capital Markets are a moral. They aim morally, rationally, alec gabbard on where the things they will be future cash marks. Number two, statement of fact, crushing the vaccine to market too early is massively dangerous to Public Health. Its not just about populations that are healthy if they take the vaccine, and just about the vaccine, there is future certainty about the use of all vaccines. And number three statement of fact, operation warp speed has distributed, i think, about nine billion dollars to developers of vaccines and the president of the United States is openly telling that there will be a vaccine available by election day. Those are facts. Youve given that a morality, questions for you mr. Claypool, is it rational too soon that a company receiving cash from operation warp speed when the president of the United States has said there would be a vaccine by election, is it rational for an aim morally rational investment, to assume that that Company Might have an increase in the return cash flows . I think its perfectly rational to think that as a result of good news, and the companys value is going to go up. There is not a place for, you know, in the greatest context of this crisis, in the idea that, i guess, one could also argue that its irrational for an insider to exploit an insider information, if they believe they can get away with it. Im not trying to ask you how you feel about the question, im glad that you feel about this question. This is also rational to sound, and if the company did see a surge in cash flows from that good news and a surgeon or equity values, the vaccine was subsequently proven to be dangerous, that Company Might face longer term liabilities. Legal or otherwise. From bringing it out to the market too soon. Okay, so. Is it then, not rational for uninformed it moral insider, looking at that information, to say it is in my amoral interest, to participate in those markets, by now, and cash out quickly before the future liability comes to play . I could see that there is a logic to that sort of hedge. It certainly works in a more cynical way, that we hope the companies are relying on to develop the vaccines for all of us. As you are acting in this crisis. I think we expect good Faith Development from the work that is the core business purpose. Yeah, and im in no way i dont mean to question the morality of the companies, i just want to a certain of market. They are not a moral, but they are not moral either, they are just making judgments. And you know, i have concerns about rushing the vaccine in the market. When we have insiders trading on this information and we should take it out on the roof isfree brushes too soon. What concerns do you have about the trust in our Capital Market . I think its very dangerous. And i also would have to add to the concern of spring loading, and those kind of issues, but its also worth being concerned that good news could be withheld until after those Stock Options are issued in a way that executives are most able to exploit. Well, thank you. I dont know what we do with this other than back in the days when i was a ceo of a company, i had a professor in broad school who said the most dangerous type of leadership is leadership based on knowledge. Because a preservation of knowledge depends on limiting people around you to access of information. And that used to find when i raise money on wall street, as a chairman was saying before, wall street is a place where information is power. Sadly its also true that the current job i have. But we always need to keep our vigilance up. In Industries Like that, were withholding information from other people, is a winning ballot. Thank, you and i yield back. Thank you. The gentlelady from new york, miss ocasiocortez, is recognized for five minutes. Thank you, mister chair, and thank you for hosting this incredibly important hearing. I had a quick question, so much of what we are discussing today has to deal with prospects of Insider Trading, and also time ceo compensation to stop. Didnt, my question for mr. Claypool, is, when ceos incorporate ceos, pharmaceuticals, and otherwise are compensating the stock package, and the packages that are an enormous amount of money, that they are being compensated in Stock Options, how is that a potentially influencing in the decisionmaking for when it comes to the Long Term Health of a company, or long term decisions for pharmaceuticals . Thank, you congresswoman. You know, thats really interesting question, because so often the idea that you put promise of issuing Stock Options as a way of being executives its intended to align the interests of a company with the interests of shareholders, and what were seeing in instances such as we are hearing here. Which is where this intense shortterm encourages ways for companies to look for ways to quickly racist outcries, or take advantage of circumstances in pursuit of short term gain. There had been a variety of reforms that have been self and acted, most companies in the aftermath of the scandal where companies were backdating to pay, which is kind of the opposite the price of the stock would go up so they would shift the date of the award backwards in time. I was at Many Companies picked, most companies pig, a pseudoselect to award those top options. That was a positive development however, as we are now showing some companies are trying to find ways to say time, bad news, or at least beforehand, before the announcement, or citing the good news for after the set date in which Stock Options are made out. Every individual instance of this may have a very plausible explanation for why they have announced a new z did when they did at the time of the options, but recent study shows that its over 1200 companies that have this sort of dshaped pattern, and how theyre paid. And the pattern is greater for companies who pay above average amount of Stock Options and for companies that are the hard value, because like these pharmaceutical companies their destinies are based on the success or failure of a single drug being developed. Its a circumstance that invites shenanigans what i am happy that is looking into. One and its a place to sort. Wait thank you,. Congresswoman can i just weigh in on that . , yes of course. Sorry to interrupt. We identified concerns about short term isnt in trading opportunities, but i think the academic literature reveals a bigger problem with options based compensation. And that is it makes an operational decision too risky. And i think that relates to congressman casten, concern, and the scientific developments with the development of vaccines. If you have Stock Options, thats a real high power incentive to take risks so yours dock prices balloon. And i think in this environment, right, thats an extra caution that we really have to worry about. Absolutely. So would you say its fair to say that having these kind of Stock Options could incentivize riskier behavior and when it comes to an industry Like Pharmaceuticals that could carry an elevated risk with it . Absolutely. And i think where we see particular concern is in some of these companies that historically have not been profitable. Where the stock prices very low to begin with and therefore the potential downside is very limited. But the potential upside is enormous. Thank you. Thank you very much. And have one last question for mr. Frenkel, youve been a prosecutor, and Insider Trading is perhaps activities that mirror or appear like Insider Trading. They are not exclusive to the private sector, and we have seen some questionable activity right here in congress. And i am really interested in your thoughts on the 2012 stock act, how we fall short, and what are some of the concerns that you think there are with respect to congress and members of Congress Engaging in behaviors that could be seen as or interpreted as uncertainty. I will ask you to answer in a couple of seconds because a time of the gentlelady is expired. Thank you mister chairman, thank you congresswoman. I think its easy to answer that question succinctly, we look to both the sec and the department of justice through bringing the cases to have a deterrent effect on certain behavior. So absence of being such cases, there is always a perception that the law may not be sufficient. In fact, at this point we have to defer to the investigations and see if they are result in the enforcement actions, we will send a message about the level of commitment to enforcement of such laws. Thank. You thank you very much. I see no other members who have not been recognized. I was informed that all members of the subcommittee who wish to participate have been able to asked. Is there any other indication of that . Is there a member of the subcommittee that has not asked questions. No mister chairman, but i do have ive been trying to get your attention so that i can submit an article for the record. The gentleman is recognized. Thank you. And it actually fits perfectly with what my colleague from new york was talking about, as well as mr. Frenkel. This is a november of 2019 riders article, the headline is u. S. Sec enforcement activity, its highest second highest level ever into size in 19. And the article goes on to explain what the sec has been doing online forsman. So i would like to put that for the record. The issue will be made part of the. Record thank you. Again again seeing that no other members have not been recognized, i would like to thank our witnesses for their testimony without objectional to apply five legislative days to submit further questions for the witnesses. You summit those through the, charitable be forwarded to the witnesses for their response. I ask witnesses to please respond promptly to any such written questions. I think today we have learned that, especially during an area of covid, we need to make sure that insiders dont deal unfairly with the investing problems, and that they profit from not yet disclosed material information. I look forward to working with my colleagues to achieve those objectives, and i hope the sec will not only continue the enforcement accent but the efforts that we have pointed out. We will look at celebrations brought up by this hearing. The areas that arent all but legal. Without objection, all members have five days to send it extraneous materials, and i remind members to submit written questions materials to the record by the email address provided to your staff. This hearing is adjourned. Weeknights this month refugee American History tv programs as a preview of what is available every weekend on cspan three. Tonight, a look at a world war ii. 75 years ago on september 2nd, 1945, government and military officials from the empire of japan signed surrender documents. In a ceremony aboard the uss missouri in tokyo bay, formerly bringing the pacific war in the hostilities of world war ii to a close. The 75th World War Ii Commemoration Committee marked the anniversary aboard the uss missouri, now a memorial and museum docked at pearl harbor in honolulu, hawaii. Watch tonight, beginning at 8 00 eastern. Enjoy American History tv, this week and every weekend on cspan three. On september 2nd, 1945, government and military officials from the empire of japan signed surrender documents in a ceremony aboard the uss missouri in tokyo bay. Formerly bringing the pacific war in the hostilities of world war ii to a close. Japanese empire he right to head announce japans Unconditional Surrender 18 days earlier on august 15th, 1945. To mark the 75th anniversary, the friends of the world war ii memorial hosted an online, commemorative program, including remarks by joint chiefs of staff chair general mark milley. And former nbc news anchor and author, tom broker. Veterans, other distinguished guests, ladies and gentlemen