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CNBC Exclusive: CNBC Transcript: Securities and Exchange Commission Chairman Mary Jo White on CNBC's "Closing Bell" Today

When: Today, Tuesday, July 16th at 3:30PM ET

Where: CNBC's "Closing Bell"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Securities and Exchange Commission Chairman Mary Jo White today on CNBC's "Closing Bell." Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?play=1&video=3000183468

All references must be sourced to CNBC.

MARIA BARTIROMO: NEW SECURITIES AND EXCHANGE COMMISSION CHAIRMAN MARY JO WHITE, ALSO A FORMER FEDERAL PROSECUTOR, SHE GOT APPOINTED TO THE ROLE OF S.E.C. CHAIRMAN BACK IN APRIL. SHE HAS ALREADY SERVED NOTICE TO FINANCIAL INSTITUTIONS SAYING DEFENDANTS AND FIRMS IN SOME CASES MUST ADMIT WRONGDOING TO SETTLE A CASE WITHOUT A TRIAL. SHE JOINS ME NOW IN A CNBC EXCLUSIVE TO TALK ABOUT THAT AND A LOT MORE. MS. CHAIRMAN, GOOD TO HAVE YOU ON THE PROGRAM.

MARY JO WHITE: GREAT TO BE HERE. GOOD TO SEE YOU, MARIA.

BARTIROMO: THANKS SO MUCH FOR JOINING US. YOU'VE BEEN IN THE JOB THREE MONTHS. FIRST, TELL US WHAT YOUR HEADLINES ARE. WHAT HAVE YOU BEEN WORKING ON? WHAT'S FRONT AND CENTER FOR MARY JO WHITE RIGHT NOW AND THE SEC?

WHITE: FRONT AND CENTER, LOTS OF THINGS ARE FRONT AND CENTER. CLEARLY COMPLETING THE MANDATED RULE MAKINGS UNDER DODD-FRANK AND THE JOBS ACT, STRENGTHENING ENFORCEMENT. YOU ALLUDED TO ONE CHANGE WE'VE MADE SINCE I'VE BEEN THERE ALREADY. VERY FOCUSED ON THE VARIOUS MARKET STRUCTURE ISSUES AS WELL. IT'S A MASSIVE SET OF RESPONSIBILITIES, YOU KNOW, THAT IS VERY EXCITING, BEEN VERY CHALLENGING AT THE SAME TIME.

BARTIROMO: IT'S A MASSIVE SET OF RESPONSIBILITY THAT HAS INCREASED WITH JOBS ACT, INCREASED WITH DODD-FRANK.DO YOU HAVE THE RESOURCES YOU NEED TO TAKE ON AS MUCH AS YOU ARE?

WHITE: WE NEED MORE RESOURCES.

BARTIROMO: YOU NEED MORE MONEY.

WHITE: WE NEED MORE MONEY. WE NEED MORE MONEY TO COVER THOSE RESPONSIBILITIES. WE'RE IN THE CURRENT BUDGET PROCESS NOW. UNDER THE PRESIDENT'S REQUEST, WE WOULD BE ABLE TO ADD 600-PLUS NEW POSITIONS. THAT WOULD HELP. BUT WE DEFINITELY NEED IT FOR I.T., WE NEED IT FOR ENFORCEMENT, WE NEED IT FOR EXAMINATION. IF WE'RE GOING TO DO THE JOB RIGHT, WE'VE GOT TO HAVE THE MONEY.

BARTIROMO: EXACTLY. AND A LOT OF PEOPLE WONDER IF, IN FACT, THE PEOPLE THAT ARE ON THE JOB, OR THAT YOU WILL HIRE, HAVE THE SKILL SET REQUIRED. I REMEMBER BACK IN 2008, SOME OF THE GUYS WHO WE THOUGHT KNEW WHAT THEY WERE DOING – SO WHAT IS A CDS?

WHITE: WELL, ONE OF THE THINGS THAT THE AGENCY HAS DONE PRIOR TO MY ARRIVAL AND CERTAINLY AFTER AS WELL, IS TO ADD MARKET EXPERTISE TO THE STAFF. OBVIOUSLY WE ARE A LAW ENFORCEMENT AGENCY. WE HAVE A LOT OF LAWYERS, A LOT OF ACCOUNTANTS, NEEDLESS TO SAY A LOT OF FINANCIAL STATEMENTS. BUT YOU NEED THAT MARKET EXPERTISE. A LOT HAVE BEEN ADDED. A LOT MORE ARE NEEDED.

BARTIROMO: LET ME ASK YOU ABOUT ONE OF THE RULE MAKING CHANGES. AND I THINK ACTUALLY THIS IS A REAL CREDIT TO YOU AND EXTRAORDINARY THAT YOU'VE ACTUALLY MADE SUCH A CHANGE IN SUCH A SHORT PERIOD OF TIME AS SOON AS YOU GOT THERE. YOU HAVE SAID SOME DEFENDANTS WOULD NO LONGER BE ALLOWED TO SETTLE SOME CASES WHILE NEITHER ADMITTING NOR DENYING WRONGDOING. I MEAN THAT'S ALWAYS BEEN SORT OF A JOKE. WELL, YOU KNOW,WITHOUT ADMITTING NOR DENYING WRONGDOING, WE'RE GOING TO PAY UP AND WE'RE GOING TO SETTLE ON THIS CASE. SOME PEOPLE ARE SAYING THOUGH, THAT OPENS UP THE DEFENDANTS TO HUGE SUMS OF CIVIL LITIGATION. IS THAT FAIR?

WHITE: THE FOCUS HAS TO BE –THIS IS ONE OF THE MANY THINGS THAT I'VE REVIEWED. LET ME JUST SAY THE NO-ADMIT, NO-DENIED POLICY USED BY LOTS OF CIVIL AGENCIES INCLUDING THE S.E.C.,HAVE YIELDED GREAT RESULTS FOR INVESTORS. MOST CASES WILL STILL BE RESOLVED THAT WAY AND SHOULD BE. BUT I DID THINK THERE WAS A NEED FOR GREATER ACCOUNTABILITY IN SOME CASES. SO THE FOCUS ON THOSE CASES WERE, I THINK,ADMISSIONS ARE NECESSARY TO HAVE THAT PUBLIC ACCOUNTABILITY WHERE THE FRAUDS ARE PARTICULARLY EGREGIOUS, THE HARM IS PARTICULARLY WIDESPREAD, AND THE FOCUS ISN'T ON WHAT THE CONSEQUENCES THEN OF THOSE ADMISSIONS MAY BE IN OTHER PROCEEDINGS.

BARTIROMO: BUT DOES THAT ADMISSION OF WRONGDOING ACTUALLY – I MEAN, COULD THAT WORK AGAINST THE S.E.C.IN TERMS OF LESS SETTLEMENT LEVERAGE?

WHITE: I DON'T THINK IT SHOULD. BUT WE HAVE TO BE PREPARED TO LITIGATE IN APPROPRIATE CASES. AGAIN,MOST CASES WILL BE RESOLVED UNDER THE PRIOR PROTOCOL, THE EXISTING PROTOCOL OF NO-ADMIT, NO-DENY. YOU GET FASTER RESOLUTIONS. YOU GET QUICKER RETURNS OF MONEY TO INVESTORS. SO THAT'S A VERY IMPORTANT, CRITICAL WEAPON IN THE ARSENAL THAT WILL CONTINUE TO BE USED A LOT. BUT PUBLIC ACCOUNTABILITY IS ALSO VERY IMPORTANT IN SOME CASES, AND WE'RE GOING TO USE IT. AND IF THAT MEANS WE HAVE TO LITIGATE AND GO TO TRIAL, YOU KNOW, WE'LL DO THAT. WE'LL OBVIOUSLY KEEP AVERY CLOSE EYE ON, YOU KNOW, THE RESOURCES TO DO THAT AND ONE OF THE AREAS WE WANT TO ENHANCE IS OUR TRIAL UNIT, WHICH IS EXCELLENT AS IT IS, BUT A PLACE FOR MORE RESOURCES AS WELL.

BARTIROMO: YOU KNOW, I THINK MOST PEOPLE WOULD AGREE THAT THE S.E.C. HAS HAD AN UNEVEN TRACK RECORD IN TERMS OF TAKING A CASE TO TRIAL. HOW IMPORTANT IS THIS FABRICE TOURRE CASE TO YOU AND YOUR AGENCY RIGHT NOW?

WHITE: I CAN'T TALK ABOUT THE SPECIFIC CASES –

BARTIROMO: I KNOW YOU CAN'T TALK ABOUT A SPECIFIC CASE –

WHITE: ALL OF OUR CASES ARE VERY IMPORTANT. I'M PROUD OF THE AGENCY'S RECORD. THEY HAVE PREVAILED OVER --NEARLY OVER 80% OF THE DEFENDANTS, YOU KNOW, HAVE BEEN FOUND GUILTY OF WHAT THEY'VE BEEN CHARGED WITH. THAT'S VERY IMPORTANT TO DO. BUT EVERY CASE IS VERY IMPORTANT.

BARTIROMO: I GUESS WHAT I'M GETTING AT, IS YOU KNOW, PEOPLE AFTER THE COLLAPSE THAT WE ALL EXPERIENCED,LIMPED THROUGH, COVERED IN 2008, ANDREW CUOMO ONCE SAID TO ME PEOPLE GO BACK IN THE WATER WHEN THEY KNOW THE SHARK IS DEAD. WE HAVEN'T REALLY SEEN MAJOR COMEDOWNS IN TERMS OF WHO'S TO BLAME, AND YET WE HAVE THIS YOUNG FRENCH GUY GOING TO TRIAL, AND PEOPLE SAY MAYBE HE WAS STUPID BY SENDING THESE IDIOTIC E-MAILS, BUT IS HE REALLY THE GUY WE SHOULD BE TARGETING?

WHITE: WELL, IT'S IMPORTANT I THINK, YOU KNOW, TO TARGET THOSE WHO VIOLATE THE LAW. WHATEVER LEVEL THEY MAYBE. I MEAN CLEARLY, YOU WANT TO TAKE THE EVIDENCE AS FAR UP IN THE CHAIN AS IT GOES IN TERMS OF SENIOR EXECUTIVES, BUT IF YOU ACTUALLY LOOK AT THE S.E.C.'S FINANCIAL CRISIS CASES, THEY HAVE CHARGED OVER 60 – EITHER CEOs, CFOs OR OTHER SENIOR EXECUTIVES. SO THAT'S A VERY IMPRESSIVE TRACK RECORD. I THINK IT GETS LOST IN THE SHUFFLE SOMETIMES, IT SHOULDN'T.

BARTIROMO: BUT IT HAS TO BE TOUGH TO ACTUALLY PROVE INTENT TO HARM AS OPPOSED TO STUPIDITY.

WHITE: INTENT IS ALWAYS ONE OF THE VERY HARDEST ISSUES IN ALL WHITE COLLAR CASES, NO QUESTION ABOUT IT.

BARTIROMO: RIGHT. LET ME ASK YOU ABOUT MARKET STRUCTURE. IS THIS ON YOUR RADAR?

WHITE: NO QUESTION ABOUT IT.

BARTIROMO: NO QUESTION ABOUT IT, RIGHT?

WHITE: NO QUESTION ABOUT IT.

BARTIROMO: I MEAN HIGH-FREQUENCY TRADING IS SOMETHING THAT WE DEBATE ALL THE TIME. WHETHER OR NOT THE RETAIL INVESTOR IS ACTUALLY GETTING A FAIR SHAKE IN TODAY'S MARKETPLACE,BECAUSE CERTAIN PLAYERS HAVE THIS ONE-SECOND OR QUARTER OF A SECOND OPPORTUNITY BEFORE THEM. HOW DO YOU FIX MARKET STRUCTURE?

WHITE: WELL, I THINK THERE ARE A NUMBER OF ISSUES IN THAT SPACE. THE FIRST THING TO DO IS FULLY UNDERSTAND THEM AND FULLY UNDERSTAND THEIR IMPACT. HIGH FREQUENCY TRADING, THERE ARE LOTS OF VIEWS ON THAT. YOU'LL HEAR THE VIEW PLAINLY FROM A LOT OF PEOPLE, A LOT OF EXPERTS THAT IT'S POSITIVE IN TERMS OF MAKING MORE LIQUIDITY AVAILABLE. OTHERS WILL SAY THE DISADVANTAGE OF SPEED IS HARMING INVESTORS. SO THE PRIORITY IS TO FIGURE OUT WHAT THAT IMPACT IS AND THEN RESPOND ACCORDINGLY. AND THE S.E.C.'S VERY MUCH ON THAT, HAS NEW TECHNOLOGIES IN ORDER TO LEARN MORE ABOUT WHAT IS HAPPENING AND WHAT THE IMPACTS ARE. THAT'S WHAT HAS TO BE FIGURED OUT BEFORE YOU DECIDE WHAT TO DO IN A REGULATORY WAY. WE'RE VERY FOCUSED ON THAT WITH A SENSE OF URGENCY.

BARTIROMO: I THINK THIS IS A VERY IMPORTANT POINT THAT YOU JUST MADE, AND THIS POINT IS NOT MADE OFTEN ENOUGH. AND THAT IS, IF YOU TAKE ONE PORTION OF THE MARKET OUT, THE HIGH-FREQUENCY TRADERS, ARE YOU TAKING OUT AN ENORMOUS PART OF THE LIQUIDITY?

WHITE: YOU HAVE TO BE FOCUSED ON -- OBVIOUSLY, THAT THE CONDUCT IS FAIR, THE CONDUCT IS LAWFUL, AND YOU'RE ALWAYS FOCUSED ON HAVING A SUFFICIENT LIQUIDITY, BUT THE POINT IS YOU WANT TO KNOW THE ANSWERS TO ANY OF THE MARKET STRUCTURE ISSUES AND HOW THEY ARE IMPACTING. NOT JUST THAT THEY EXIST, BUT HOW THEY ARE IMPACTING – ARE THEY HARMING, ARE THEY HELPING, ARE THEY DOING BOTH? WHAT YOU SHOULD DO ABOUT IT AS A REGULATOR.

WHITE: WHEN YOU LOOK AT VOLUME TODAY, DO YOU THINK THAT'S A FUNCTION OF THE RETAIL INVESTOR BEING GONE? ARE THEY COMING BACK? WHAT'S YOUR TAKE ON INSTITUTIONAL VERSUS RETAIL INVESTOR-- THE RETAIL INVESTOR IS SAID TO HAVE LEFT THE PARTY BECAUSE THEY FEEL THAT THEY CAN'T GET A FAIR SHAKE. IS THAT A FAIR STATEMENT?

WHITE: THE RETAIL INVESTOR IS ALWAYS A MAJOR FOCUS – IT CERTAINLY IS OF MINE, AT THE S.E.C. – MAJOR, HIGH PRIORITY I THINK, AND VERY IMPORTANT THAT THEIR CONFIDENCE ALWAYS BE THERE. AND IF IT NEEDS REBUILDING, THAT IT IS REBUILT. I THINK YOU DO SEE RETAIL INVESTORS,YOU KNOW, RETURNING TO THE MARKETPLACE. BUT PLAINLY, YOU NEVER SHOULD LOSE YOUR FOCUS ON AND YOUR PRIORITY ON THE RETAIL INVESTORS AND I CERTAINLY WON'T.

BARTIROMO: YEAH AND WELL IT IS NICE TO SEE THAT THEY ARE GETTING CONFIDENCE AGAIN BECAUSE IT IS ALL ABOUT CONFIDENCE.

WHITE: NO QUESTION THAT MARKET CONFIDENCE IS CRITICAL. ACROSS THE BOARDS.

BARTIROMO: LET ME ASK YOU ABOUT – I DON'T THINK NEW YORK POLITICS HAS BEEN THIS EXCITING IN A LONG TIME.

WHITE: I'M IN WASHINGTON NOW.

BARTIROMO: I KNOW IT. BUT WHAT'S YOUR TAKE ON ELIOT SPITZER'S RETURN, SEEKING THE COMPTROLLER'S OFFICE?HE USED TO SITE THE S.E.C., WAS FALLING DOWN ON THE JOB. AND THAT'S HOW --THAT'S THE REASON HE HAD TO STEP IN.

WHITE: FIRST, I DON'T GET INVOLVED IN LOCAL POLITICS. YOU KNOW, I THINK IT'S A REGULATORS -- STATE REGULATORS ARE EXTREMELY IMPORTANT TO THE SYSTEM, AS WELL. ELIOT SPITZER AND MANY OTHERS, RIGHTLY SO, HAVE SAID VERY POSITIVE THINGS ABOUT THE S.E.C. YOU KNOW, YOU ALWAYS WANT TO LOOK AT THE AREAS WHERE CAN YOU DO BETTER AT THE S.E.C. BUT I'VE BEEN ENORMOUSLY IMPRESSED BY THE S.E.C.'S TRACK RECORD AND THE PEOPLE THAT ARE THERE, DEDICATION AND EXPERTISE. YOU KNOW, AND OUR FOCUS IS ON BEING JUST AS STRONG AS WE POSSIBLY CAN FOR THE BENEFIT OF INVESTORS, FOR FACILITATING, YOU KNOW, CAPITAL FORMATION, AND, YOU KNOW, QUITE CONFIDENT THAT THIS AGENCY IS MORE THAN UP TO THAT TASK.

BARTIROMO: AND YOU USED TO BE PROSECUTOR. SHOULD YOU REFER MORE CASES TO PREET BHARARA IN THE SOUTHERN DISTRICT?

WHITE: WE HAVE AN EXCELLENT WORKING RELATIONSHIP WITH PREET BHARARA AND OTHER U.S. ATTORNEY'S OFFICES AND OTHER DISTRICT ATTORNEY'S OFFICES. AND IT'S IMPORTANT TO WORK IN PARALLEL WITH CRIMINAL AUTHORITIES. NO QUESTION ABOUT IT. BECAUSE THE S.E.C. IS A CIVIL LAW ENFORCEMENT AGENCY AND THE MOST EGREGIOUS OFFENDERS, WE DO REFER AND COOPERATE WITH THE U.S. ATTORNEY ON. NO QUESTION.

BARTIROMO: WE MENTIONED DODD-FRANK EARLIER. DOES IT GET TOUGHER FOR YOU KNOWING THAT YOU'VE GOT DIFFERENT RULES ALL AROUND THE WORLD? I MEAN, YOU HAVE SEEN CONSOLIDATION IN THE EXCHANGE SPACE. YOU'VE GOT, IN DODD-FRANK, LOTS OF TALK AND SPECULATION THAT PERHAPS EUROPE WILL HAVE A WHOLE DIFFERENT SET OF RULES THAN THE UNITED STATES.HOW DIFFICULT DOES THAT MAKE YOUR JOB IN TERMS OF OVERSIGHT?

WHITE: YOU CLEARLY HAVE TO RECOGNIZE THAT REALITY. WE'VE BEEN FACING THAT MOST RECENTLY AND OBVIOUSLY IN THE DERIVATIVE SPACE, WHICH IS A PECULIARLY GLOBAL MARKET. LOTS OF REGULATORS IN THAT SPACE. S.E.C., SINCE I HAVE ARRIVED, HAS PUT OUT, WHAT'S CALLED IT'S CROSS-BORDER PROPOSAL TO LET MARKET PARTICIPANTS, REALLY AROUND THE WORLD, KNOW HOW THOSE RULES WILL IMPACT THEM IN THESE VERY GLOBAL MARKETS. YOU HAVE TO DEAL WITH THAT.

BARTIROMO: THIS IS ONE ISSUE THAT I THINK THE BANKERS ARE VERY CONCERNED ABOUT, DERIVATIVES ON EXCHANGES.ARE YOU WORRIED ABOUT A NEGATIVE IMPACT ON THE INDUSTRY AS A RESULT?

WHITE: I MEAN, YOU ALWAYS LOOK AT THE IMPACTS OF YOUR RULES. YOU LOOK AT INVESTOR PROTECTION. YOU LOOK AT MAKING SURE THE RULES ARE ROBUST, BUT YOU ALSO LOOK AT THE COST BENEFIT OF THEM AND THE IMPACT ON THE INDUSTRY. YOU KNOW, THE S.E.C. HAS A THREE-PART MISSION.ONE IS TO PROTECT INVESTORS. ANOTHER IS TO FACILITATE CAPITAL FORMATION. AND THE OTHER IS TO ENSURE THE FAIR AND ORDERLINESS AND EFFECTIVENESS OF THE MARKETPLACE. SO THAT CERTAINLY COMES VERY MUCH INTO PLAY.

BARTIROMO: BUT WITH ALL OF THE RULES, ARE WE SQUEEZING ONE OF THE MOST IMPORTANT INDUSTRIES IN THE ECONOMY– THE BANKS, DERIVATIVES, AS WELL AS CAPITAL REQUIREMENTS, AS WELL AS THE SETTLEMENT WE JUST TALKED ABOUT?

WHITE: WELL, A NUMBER OF THE DODD-FRANK PROVISIONS IN PARTICULAR – SOME OF THE CAPITAL REQUIREMENTS NOW ARE DESIGNED TO DEAL WITH WHAT WE ALL WENT THROUGH, WHICH IS THE FINANCIAL CRISIS AND PROTECT AGAINST THAT HAPPENING AGAIN. THAT'S OBVIOUSLY VERY IMPORTANT FOR OUR ECONOMY, VERY IMPORTANT FOR OUR MARKETS. BUT AS WE RULE MAKE AT THE S.E.C.,YOU KNOW, WE ARE CONSIDERING ALL OF THOSE ISSUES IN TERMS OF HOW THOSE RULES IMPACT NOT JUST IN TERMS OF THE PROTECTIONS, BUT ALSO IN TERMS OF MAKING SURE THAT WE'RE CONSIDERING WHAT IT DOES TO CAPITAL FORMATION AND THE ECONOMY.

BARTIROMO: MARY JO WHITE WITH YOU AT THE WHEEL, YOU ARE INSPIRING CONFIDENCE. THANK YOU VERY MUCH.

WHITE: THANK YOU VERY MUCH.

BARTIROMO: GOOD TO TALK TO YOU AS ALWAYS. MARY JO WHITE, CHAIRMAN OF THE S.E.C.


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