CNBC Exclusive: Preet Bharara Speaks with CNBC's Jim Cramer and David Faber from CNBC Institutional Investor Delivering Alpha Conference

WHEN: Wednesday, July 16th

WHERE: CNBC'S "Street Signs"

Following is the unofficialtranscript of a CNBC EXCLUSIVE interview with Preet Bharara, United StatesAttorney – Southern District of New York, live from the CNBC InstitutionalInvestor Delivering Alpha conference in New York City on Wednesday, July 16th.

Following are links to thevideo of the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000293180,http://video.cnbc.com/gallery/?video=3000293242 andhttp://video.cnbc.com/gallery/?video=3000293251.

Mandatory credit: CNBCInstitutional Investor Delivering Alpha conference.

DAVID FABER:WE'RE JOINED RIGHT HERE ON THE SET, OF COURSE, AT DELIVERING ALPHA BY PREETBHARARA, THE US ATTORNEY OF THE SOUTHERN DISTRICT. NICE TO HAVE YOU, NOT ONSTAGE BUT ACTUALLY WITH US WITH JIM CRAMER WHO HAS INTERVIEWED A NUMBER OF TIMEFROM THIS VERY CONFERENCE IN YEARS PAST.YOU LOST ONE RECENTLY. A LOTS OF MADEOF IT, I GUESS 85 CONVICTIONS, NOW ONE NOT CONVICTION. ROGER ANTAM'S YOUNGERBROTHER. IS THAT A DISAPPOINTMENT FOR YOU?

BHARARA:YEA, WHEN YOU BRING A CASE WHERE YOU THINK YOU HAVE PROOF BEYOND A REASONABLEDOUBT AND YOU THINK IT'S THE RIGHT THING TO DO AND JUST REQUIRED TO BRING THECASE, AND YOU LOSE IT, IT'S ALWAYS DISAPPOINTING. I SAID IT WAS DISAPPOINTINGAFTER THE FACT. 85-1 IS A PRETTY GOOD RECORD. YOU KNOW, THERE HAVE BEEN TIMESWHEN PEOPLE CRITICIZED US FOR HAVING A PERFECT RECORD. SAYING IT MIGHT MEANYOU'RE NOT BRINGING HARD CASES. WE BROUGHT A LOT OF HARD CASES, I SAID IT ATTHE TIME AND I'LL SAY IT NOW, WHEN YOU LOSE A CASE I THINK IT PUTS A LITTLE BITINTO PERSPECTIVE, THE ACCOMPLISHMENT BY THE FOLKS IN MY OFFICE AND THE FBI ANDSEC IN A LOT OF THESE CASES BECAUSE YOU CAN'T WIN EVERY CASE IN OUR SYSTEM.THAT'S NOT HOW IT WORKS. BUT, THAT DOESN'T MEAN WE CHANGE WHAT WE DO AND WEBRING CASES IN THE SAME AS WE ALWAYS HAVE WHEN WE THINK WE HAVE THE EVIDENCE.AND SOME CASES ARE HARDER THAN OTHERS.

FABER: THEREWERE SOME CORRESPOND AT LEAST AND SOME COVERAGE THAT INDICATES YOUR OFFICE KNEWIT WAS – THEIR WORDS NOT MINE -- A WEAK CASE.

BHARARA: I'MNOT GOING TO COMMENT ON THAT. THERE ARE A LOT OF PEOPLE COMMENT ON THINGS THATTHEY DON'T KNOW WHAT THEY ARE TALKING ABOUT. NO CASE IS EQUALLY HARD OR EQUALLYEASY. THEY RANGE WHETHER YOU'RE TALKING ABOUT A NARCOTICS CASE OR INSIDERTRADING CASE. WE BRING EVERY CASE THAT WE THINK IS RESPONSIBLE TO BRING ANDTHAT JUSTICE REQUIRES US TO BRING, AND WHEN A CASE IS ABOVE THAT THRESHOLD,WHICH IS A VERY HIGH THRESHOLD, PROOF BEYOND A REASONABLE DOUBT TO A UNANIMOUSJURY IS VERY DIFFICULT THING TO ACCOMPLISH. AND WHEN YOU ACCOMPLISH IT 85TIMES, IT SHOWS THAT PEOPLE ARE WORKING REALLY HARD AND BRINGING THE RIGHTCASES.

FABER: AREWE AT THE END OF WHAT HAS BEEN NOW YEARS, OF COURSE, OF PROSECUTIONS BY YOUROFFICE FOR INSIDER TRADING ON WALL STREET.

BHARARA:WE'RE NOT AT THE END. THERE ARE STILL CASES IN THE PIPELINE. CASES THAT ARE ONGOING.I DON'T KNOW IT WILL BE THE SAME NUMBER AS WE HAD BEGINNING ABOUT FOUR AND AHALF YEARS AGO. PEOPLE ARE STILL COMMITTING BAD ACTS. AND BAD ACTS COMMITTEDBEFORE SOMETIMES COME TO LIGHT TWO, THREE, FOUR YEARS AFTER THE FACT. AND WEBRING THEM WHEN WE CAN.

FABER: WELLTHERE ARE A NUMBER OF PROSECUTIONS THAT ARE ONGOING. UNDERSTAND THAT. SOMERELATED TO SAC. BUT AGAIN, FROM YOUR PERSPECTIVE HAVING PROSECUTED SO MANY OFTHESE, FROM THAT FIRST DAY I REMEMBER WITH ROGER ANTAM, WHEN I WAS REPORTING ONIT THAT MORNING, IT WOULD SEEM AS THOUGH WE'VE AT LEAST PASSSED THROUGH THEBULK OF WHAT MANY PEOPLE WOULD SEE THE PROSECUTIONS THAT YOUR OFFICE HASUNDERTAKEN.

BHARARA: WEDON'T KNOW WHAT TOMORROW BRINGS. AND I DON'T WANT TO COMMENT AS THINGS AREUNDER WRAP AS THEY HAVE TO BE. I'M NOT SAYING THAT THERE WILL BE 85 MORE IN THENEXT 12 MONTHS BUT WE STILL HAVE CASES TO BRING.

CRAMER: WHYARE WE STILL TALKING ABOUT? IT'S SO SCARY.

BHARARA: YOUPEOPLE LOVE TO TALK ABOUT IT.

CRAMER: NO,WHY ARE PEOPLE STILL COMMITTING IT? YOU SEND A LOT OF PEOPLE TO JAIL. OK, SO 85OUT OF 86. MAYBE YOU'RE THE LUCKY GUY THAT WINS THE LOTTERY AND DOESN'T GO TOJAIL. YOU SEND A LOT OF PEOPLE TO JAIL. THERE'S A LOT OF PEOPLE LOSE THEIRLIVELIHOOD AND YET RISK IT. WHAT KIND OF CALCULUS ARE THEY DOING?

BHARARA: IDON'T KNOW, THEY SHOULD DO SOME BETTER CALCULATIONS. THEY SHOULD GET A BETTERCALCULATOR. I DO THINK, ANECDOTALLY, THAT THINGS HAVE GOTTEN BETTER.I THINKTHAT THE TIMING OF SOME OF THE CONDUCT IN SOME OF THE MORE RECENT CASES PRE-DATESTHE ONSLAUGHT BY THE FBI AND BY OUR OFFICE AND OTHER OFFICES. LOOK IT'S ALWAYSGOING TO BE THE CASE YOU'RE NEVER GOING TO ERADICATE EVERY KIND OF CRIMINALACTIVITY, WHETHER ITS NARCOTICS TRAFFICKING OR INSIDER TRADING. THERE AREALWAYS GOING TO BE PEOPLE WHO THINK THEY CAN GET AWAY WITH IT BECAUSE THEY ARESMARTER THAN THE OTHER GUY. AND THEY TRY TO STUDY THE TECHNIQUES AND MECHANISMSBY WHICH THEY CAN GET AWAY WITH IT. SOME PEOPLE DON'T KNOW HOW TO NOT EVENTEMPTATION. AND YOU'RE ALWAYS GOING TO HAVE SOME NUMBER OF PEOPLE DOING THAT.OUR HOPE IS, ANECDOTALLY, BASED ON THINGS WE SEE AND THINGS PEOPLE SAY, WETHINK IT'S GOTTEN BETTER AND THERE IS A SERIOUS DEFER EFFECT AND IT'S NOT BEINGDONE TO THE SAME LEVEL THAT IT WAS, BUT THAT'S IMPOSSIBLE TO MEASURE ASASCIENTIFIC MATTER.

CRAMER: LASTYEAR WHEN I INTERVIEWED YOU, YOU SAID THAT YOU'RE NOTAFRAID TO PROSECUTE ABANK. YOU'RE NOT EVEN AFRAID IF YOU PUT THE BANK OUT OF BUSINESS. WHAT I WANTTO KNOW IS, WHAT DO YOU HAVE TO DO TO BE PUT OUT OF BUSINESS? THERE'S A BANK,BANK POWER BAH, THAT KNEW THEY WERE UNDER INVESTIGATION, THE FIRST THING--EVERYONE KNOWS, LIKE YOU'RE WATCHING A TV SHOW. PRESERVE THE EVIDENCE. STOPDOING WHAT YOU'RE DOING. GENERAL COUNSEL COMES IN. GOT COMPLIANCE. LISTEN. STOPIT. THEY DIDN'T STOP IT.AND YET THEY PAID A FINE.

BHARARA:THEY DIDN'T JUST PAY A FINE,THEY PLED GUILTY –

CRAMER:YEAH, BUT EVERYONE IS STILL DOING BUSINESS WITH THEM, HAVING A GOOD QUARTER.

BHARARA: THEPOINT OF PROSECUTION IS NOT TO GET EVERYONE WHO COMMITS A CRIME THE DEATHPENALTY. IN OUR SYSTEM, THAT'S APPARENTLY STILL PERMITTED IN CERTAIN CASES ANDTHAT'S TRUE WITH FINANCIAL INSTITUTIONS.THE POINT WAS MAKING LAST YEAR AND THEPOINT I MADE THROUGHOUT IS THAT NO INSTITUTION IS TOO BIG TO JAIL.THAT DOESN'TMEAN DEPENDING ON THE NATURE OF THE CONDUCT THAT YOU'RE TRYING TO PUT A COMPANYWHETHER IT'S A BANK OR HEDGE FUND OR ANYONE ELSE NECESSARILY OUT OF BUSINESSAND CAUSE HUNDREDS OF THOUSANDS OF PEOPLE TO LOSE THEIR JOBS AND ROYAL THEECONOMY. IN THE B AND P CASE, LIKE IT WAS TRUE IN THE CREDIT SUISSE CASE, WHICHMY OFFICE WAS NOT A PART OF, THE OBJECT WAS TO EXACT A VERY SERIOUS PENALTY ANDHAVE A SERIOUS DETER EFFECT AND SIGNIFICANT FINANCIAL PENALTY COMMENSURATE WITHTHE ACTIONS THAT TOOK PLACE. AND IMPOSE A MONITOR AND ALL OTHER TYPES OFREFORMS, BUT THE GOAL IN THAT CASE WAS NOT TO DESTROY THE BANK BECAUSE GIVENTHE NATURE OF THE CONDUCT ALTHOUGH VERY SERIOUS THAT'S NOT RESPONSIBLE. AND I THINK,WHAT YOU SAW IN THE B AND P CASE IS SOMETHING THAT'S VERY BEEN RARE SINCE THEDAYS OF ARTHUR ANDERSON. AS I OFTEN SAY THE PENDULUM HAS SWUNG BACK. PEOPLEWERE SAYING A YEAR OR TWO AGO THAT IT WOULD BE IMPOSSIBILTY FOR A MAJORFINANCIAL INSTITUTION TO WITH STAND A GUILY PLEA AND BE CHARGED FOR A FEDERALCRIME. AND, AS I HAVE BEEN SAYING FOR A WHILE, THAT'S NOT TRUE. COLLATERALCONSEQUENCES OF A FINANCIAL INSTIUTION OR A BUSINESS CAN SUFFER. THERE WILL BEOCCASIONS WHERE A FINANCIAL INSTITUTION OR ANOTHER ENTITY MIGHT SUFFER MORESERIOUS CONSEQUENCES THAT MIGHT BE THE RIGHT THING. IT WASN'T THE RIGHT THINGIN THAT CASE. I HOPE PEOPLE APPRECIATE THAT PROSECUTORS LIKE BROOKS IN OUROFFICE AND OTHERS HAVE BEEN RESPONSIBLE AND MATURE ABOUT EXACTING A VERY SERIOUSPENALTY BUT NOT GOING TOO FAR.

FABER: IWANT TO COME BACK TO INSIDER TRADING FOR A MOMENT BEFORE WE MOVE ON TO A COUPLEOF OTHER AREAS AS WELL. SPECIFICALLY CHASE AND NEWMAN A CASE YOU GUYSPROSECUTED AND WON THAT'S NOW ON APPEAL. GETS TO QUESTIONS IN THE WAY YOUROFFICE INTERPRETED OR SUCCEEDED IN GETTING JUDGES TO AGREE ON WHAT CONSTITUTESINSIDER TRADING. IN THIS CASE FOR EXAMPLE PEOPLE WERE, NUMEROUS NUMBERS DOWNTHE LINE SO TO SPEAK FROM THE RECEIPT OF WHAT WAS MATERIAL, NON PUBLICINFORMATION AND MAY NOT HAVE KNOWN THAT A BENEFIT WAS CONSTRUED AT ALL. THERESEEMED TO BE SOME JUDGES AT LEAST WHO SAY THAT IS NOT INSIDER TRADING, YOUROFFICE SEEMS TO DISAGREE.

BHARARA:WE'LL SEE WHAT HAPPENS WITH THAT CASE.JUST SO PEOPLE UNDERSTAND WHAT WE'RETALKING ABOUT HERE, THE LEGAL ELEMENT THAT'S IN QUESTION THEREAS THE DEFENSEHAS PUT FORWARD HAS TO DO WITH KNOWLEDGE NOT ABOUT WHETHER THE INFORMATION WASMATERIAL OR NONPUBLIC BUT WHETHER OR NOT THE PERSON FIRST OBTAINED THE MATERIALGOT SOME KIND OF A BENEFIT WHICH IS A TECHNICAL ELEMENT OF INSIDER TRADING. WEHAVE TAKEN A POSITION THAT THEY DON'T NEED TO KNOW THAT AND WE HAD JUDGES AGREEWITH US. THE SYSTEM WE HAVE IN PLACE IS WHERE YOU HAVE APPEALS COURT ANDFURTHER APPEALS AFTER THAT.

FABER: ANDIF THAT'S APPEALED, DOES THAT PUT INTO JEOPARDY SOME OF THE OTHER CONVICTIONSYOU REACHED, FOR EXAMPLE WITH MR. STEINBERG, AGAIN THIS IDEA IF I'M FOUR ORFIVE DOWN AND I'M NOT AWARE -- I'M NOT AWARE THAT THIS WAS ACTUALLY ILLEGAL.

BHARARA: IT'S NOT WHETHER IT WAS ILLEGAL. AWARE WHETHER OR NOT A PERSONUPSTREAM GOT A BENEFIT. WHAT I WILL SAY RATHER THAN TALKING ABOUT AN IMPACT ITWILL HAVE ON ANY ONGOING CASES, IF THE RULING GOES THE OTHER WAY I THINK IT'SFAIR TO SAY THAT IT WILL BE EASIER FOR CERTAININDIVIDUALS TO TURN A BLIND EYEAND MAKE AN ARGUMENT THEY DIDN'T KNOW ABOUT THE BENEFIT BUT STILL GOT INSIDEINFORMATION AND WERE ABLE TO MAKE A PROFIT AND BE A LOT EASIER FOR A LOT OFPEOPLE TO CHEAT IN A WAY THAT I THINK IS UNFORTUNATE.

CRAMER:ANOTHER WAY TO INTERPRET THE LAW WOULD BE WHEN I WAS A HEDGE FUND MANAGER IF IHEARD SOMETHING THAT WAS NONPUBLIC MATERIAL, I ALWAYS SAID DON'T FREEZE ME.YOU'RE FREEZING ME. MY LAWYERS SAY I CAN'T DO A THING. TO ME IF YOU'RE JUSTGIVING ME INFO NOW UNDER THERE NOW I CAN SAY I'M NOT FROZEN. I CAN DO WHATEVERI WANT. I DIDN'T PAY THAT PERSON ANYTHING.

BHARARA:WE'LL SEE HOW THE CASE PLAYS OUT. I DO HAVE A CONCERN THAT IF THE ELEMENTS GETNARROWED TOO MUCH IT MAKES IT A LITTLE BIT TOO EASY FOR PEOPLE TO COMMIT FRAUDON A MARKET AND TO CHEAT OTHER PEOPLE WHO ARE PLAYING BY THE RULES AND KNOWTHEY ARE PLAYING BY THE RULES. THAT'S ALL.

CRAMER: IT'SROGUE DECISION.

BHARARA: I'MNOT GOING TO COMMENT ON THAT. WE MAKE OUR POSITIONS CLEAR ON LEGAL MATTERS ANDVERY RESPECTFULLY TO JUDGES WHO WE SOMETIMES DISAGREE WITH AND WE'LL SEE HOW ITPLAYS OUT.

FABER: DOYOU THINK WALL STREET IS INHERENTLY CORRUPT.

BHARARA: NO. I DON'T THINK ANY INSTITUTION IS INHERENTLY CORRUPT. IN DON'T THINK HEDGEFUNDS ARE INHERENTLY CORRUPT. I DON'T THINK EXPORT NETWORKING FIRMS AREINHERENTLY CORRUPT. I DON'T THINK STATE HOUSES ARE INHERENTLY CORRUPT. CORRUPTCULTURES DEVELOP IN VARIOUS PLACES AND I THINK IN SOME QUARTERS PEOPLE ARE NOTDOING ENOUGH TO MAKE SURE THEY ARE TAKING CARE OF THAT. I THINK, IF PEOPLE THINKOF WHO THEY ARE HIRING INTO A COMPANY THEY WOULD DO A BETTER JOB. ONE OF THETHINGS IN THE SAC CAPITAL CASE WHICH IS ALL A MATER OF PUBLIC RECORD THATPEOPLE MAYBE DIDN'T FOCUS ENOUGH ON AND ONE OF THE MOST BIZARRE THINGS THAT'SLAID OUT IN THE INDICTMENT IS THAT THERE WAS A PERSON HIRED OVER THE OBJECTIONOF THE COMPLIANCE OFFICIALS AT SAC CAPITAL WHO WAS RUMORED TO BE A CROOK ANDINSIDE TRADER. AND SHOCKINGLY WHEN THAT PERSON COMES TO THE FIRM WHAT HAPPENEDWITHIN A COUPLE OF WEEKS? HE BEGAN TO ENGAGING INSIDER TRADING. SOME STUFF ISCOMMON SENSE. SOME STUFF HAS TO DO WITH CULTURE OF A PLACE. I DON'T THINK THATWALL STREET IS INHERENTLY CORRUPT. I DON'T THINK BANKS ARE INHERENTLY CORRUPT.I THINK THAT THEY CAN BEING A GREAT INSTITUTIONS BUT THERE IS CORRUPTION IN TOOMANY PLACES.

FABER: ISTHE SAC INVESTIGATION OVER AND DONE WITH IN YOUR MIND:

BHARARA: I'MNOT GOING TO COMMENT ON WHETHER THAT'S OVER OR NOT.

FABER: YOURCAREER PATH, I WONDER, YOU'VE BEEN A GOVERNMENT EMPLOYEE FOR A WHILE. NOT THATEASY TO SUPPORT A FAMILY IN A NEW YORK AREA.WOULD YOU EVER CONSIDER GOINGTO WALL STREET?

BHARARA: I'M TRYING TO DO THIS JOB AND DO AS GOOD A JOB AS I CAN AT THIS. I'M NOTTHINKING ABOUT THE FUTURE.

FABER:YOU'RE NOT THINKING ABOUT THE FUTURE? YOU GOT TO BE THINKING ABOUT THE FUTURE.

BHARARA: I'MTHINKING ABOUT TOMORROW. I'M THINKING ABOUT NEXT WEEK AND THINKING ABOUTMAKING IT TO MY FIFTH ANNIVERSARY IN MY JOB.

FABER: WEJUST HEARD FROM A FORMER PROSECUTOR WHO POTENTIALLY MAY RUN FOR PRESIDENT.

BHARARA: HEACTUALLY PUT IT VERY WELL. HE SAID THAT YOU SHOULD NEVER PUT AMBITION BEFOREWISDOM. I ACTUALLY HAVE NEVER HEARD IT PUT THAT WAY BEFORE.I AGREE WITH THAT

FABER: IWANT TO GET YOUR REACTION TO SOMETHING THAT JUDGE RAKOFF SAID RECENTLY, THAT AFEDERAL JUDGE ABOUT PLEABARGAINS WHICH YOUR OFFICE HAS RECEIVED MANY. OR ANUMBER. PLEA BARGAINS HAVE LET MANY INNOCENT PEOPLE TO TAKE A DEAL. RAKOFF ISQUOTED AS SAYING, PEOPLE ACCUSED OF CRIMES ARE OFTEN OFFERED FIVE YEARS BY APROSECTUOR OR FACE 20 TO 30 YEARS IF THEY GO TO TRIAL. THE PROSECUTOR HAS THEINFORMATION, HE HAS ALL THE CHIPS AND THE DEFENSE LAWYER HAS VERY, VERY LITTLETO WORK WITH. IT'S A SYSTEM OF PROSECUTOR POWER AND DISCRETION.

BHARARA:JUDGE RECOFF IS A FRIEND OF MINE. I'M A GUEST IN HIS CLASS EVERY YEAR. I HAVERESPECT FOR HIM. HE AND I KNOW THAT WE DON'T AGREE ON ALL THINGS, WEAGREE ON SOME THINGS AND ACTUALLY QUITE A BIT, BUT NOT ALL THINGS. THE JUDGE KNOWSTHAT IN THE FEDERAL SYSTEM BEFORE SOMEONE IS ABLE TO PLEAD GUILTY THERE'S AFULL ELOCUTION UNDER OATH AND THE JUDGE IS REQUIRED TO MAKE A SEARCHING INQUIRYOF THE PERSON TO MAKE SURE THEY ARE PLEADING GUILTY. AND JUDGE RACOFFHIMSELF HASDONE IT HUNDREDS OF TIMES AND IF HE'S AWARE OF A CASE EVER BROUGHTBY MY OFFICE WHERE SOMEBODY PLED GUILTY BUT WAS NOT GUILTY OR MORE SPECIFICALLYTHAT HE TOOK AN ACCEPTED A GUILTY PLEA WHERE THAT WAS CASE, I WOULD LIKE TOKNOW ABOUT IT, AND HE HE HASN'T CALLED ME WITH SUCH AN EXAMPLE TO DATE.

CRAMER: DOYOU THINK IT'S A CRIME TO RUN AHEAD OF SOMEONE ELSE'S ORDER WHEN YOU PAID TOGET THAT ORDER? DO YOU THINK THAT THERE'S A CRIME BEING COMMITTED AT SOME LEVELBY HIGH FREQUENCY TRADERS?

BHARARA:HIGH FREQUENCY TRADING IS GETTING A LOT OF ATTENTION AS IT SHOULD. MY SENSE ISTHAT IT'S A BIT MORE OF A REGULATORY ISSUE THAN A CRIMINAL PROSECUTIONISSUE. BUT IT'S SOMETHING LOOKED AT VERY CAREFULLY, AS THEYSHOULD. BUT PROSECUTORS IN MY OFFICE AND THE FBI ARE ALSO LOOKING AT IT TO SEEIF, YOU KNOW, THERE'S A BASIS TO BRING A CHARGE, IF PEOPLEARE ACTING WITHCRIMINAL INTENT AND ARE TAKING UNFAIR ADVANTAGE BASED ON THE LAWS AS THEY AREWRITTEN OUT.

CRAMER: I'MTALKING ABOUT AN ONGOING INVESTIGATION ON HIGH FREQUENCY TRADERS.

BHARARA: I'M SAYING THEY ARE TAKING A LOOK AT THE ISSUE.

CRAMER: IDON'T KNOW.

FABER: YOUKNOW, FINALLY CYBER WHICH YOU DISCUSSED WITH TREASURY SECRETARY EARLIER IN YOUROFFICE. WE CAN ALL GO DOWN A PRETTY SCARY WAY FOR A FINANCIAL INSTITUTION WHENIT COMES TO CYBER CRIME. WE ALSO KNOW THE U.S. HAS INDICTED FIVE CHINESENATIONALS WHO WILL NEVER GET IT - SEEMED TO BE MORE FOR SHOW. HOW SERIOUS APROBLEM IS THIS AND DOES YOUR OFFICE HAVE ANY REAL HOPE HERE OF COMBATTING ITON A WORLDWIDE BASIS?

BHARARA: ITHINK THERE IS HOPE. THE FACT THAT TREASURY SECRETARY, SECRETARY OF THE UNITEDSTATES OF AMERICA CHOSE TO SPEND A SUBSTANTIONAL PORTION OF HIS ADDRESS AT THISCONFERENCE ON CYBER SECURITY ISSUE IS A NEW THING. THAT DIDN'T HAPPEN FOUR ORFIVE YEARS AGO. THE NUMBER OF PEOPLE IN MY OFFICE WHO ARE FOCUSES ON CYBER ISUP 10 FOLD FROM THE TIME I STARTED. THE NUMBER OF RESOURCES THE FBI HAS BROUGHTTO BEAR IS ALSO UP MANY MANY MANY FOLD. AND IT'S AN IMPORTANT ISSUE FORYOUR VIEWERS FOR PEOPLE IN BUSINESS. GENERAL ALEXANDER PUT IT THIS WAY. HESAID, WE'RE WITNESSING RIGHT NOW IN THE CASE OF ECONOMIC ESPIONAGE, THEGREATEST TRANSFER OF WEALTH IN HUMAN HISTORY. IT'S VERY HEARTENING THING FROMWHERE I SIT TO SEE PEOPLE WHO ARE EVEN HIGHER UP IN THE GOVERNMENT CABINET SECRETARIESAND OTHER TALKING ABOUT THE PROBLEM WITH CHINA. WELL I KNOW SOME PEOPLE SAYTHAT WASN'T MY CASE THE CHINESE NATIONALIST CASE MIGHT NOT GET THOSE BODIES. ITHINK THERE ARE PEOPLE WITHIN THE GOVERNMENT INCLUDING MY OFFICE AND THEJUSTICE DEPARTMENT AND THE FBI AND ELSEWHERE WHO ARE TRYING TO FIGURE OUT WAYSTO BRING INDIVIDUALS TO JUSTICE. BUT, I'M NOT SURE IT MAKES STONES GIVE THEM ABUY BECAUSE YOU CAN'T GET THEM. THERE'S SOME EVIDENCE TO BELIEVE THAT THEPROCESS OF NAMING AND SHAMING IF YOU HAVE THE EVIDENCE AND YOU BRING THE CASEAND MAKE AN OPEN CASE ABOUT IT AND EXPOSE TO IT THE PUBLIC, THAT I THINK HELPSMATTERS AND CAN DETER PEOPLE AND MAY NOT DETER AS MUCH AS YOU WANT. THE BESTWAY TO DETER IS TO PUT THE ACTUAL HUMAN BEING IN HANDCUFFS. BUT I DON'T THINKIT'S NOTHINGM I THINK IT'S A BIG DEAL.

FABER: DOYOU THINK THE FBI, GIVEN YOUR EXPERIENCE WITH IT, HAS THE RESOURCES TO COMBATTHISEFFECTIVELY? OFTEN TIMES THE CRIMINALS SEEM TO BE MORE SOPHISTICATED THANTHOSE TRYING TO TRACK IT.

BHARARA:LOOK, JIM COMEY IS A FRIEND, AND USED TO HAVE MY JOB. AND I USE TO WORK FORHIM. HE HAS MADE THIS ONE OF THE TOP PRIORITIES OF THE FBI AS DIRECTOR MULLERDID BEFORE. EVERYBODY IS PAYING ATTENTION TO IT AND IT'S NOT GOING TO BESOMETHING YOU CAN JUST PROSECUTE YOUR WAY OUT OF. REGULATION HAS TO BE THERE.COMMITMENT ON PARTS OF THE SHAREHOLDERS AND BOARD OF DIRECTORS AND CEO, PEOPLEIN THE SEAT OF MAJOR COMPANIES HAS TO BE THERE. I'M STILL SURPRISED HOW OFTEN ITALK ABOUT THE CYBER ISSUE AND I TALK TO PEOPLE AT COMPANIES AND THEY SAY THEYDON'T HAVE A PLAN IN PLACE FOR WHAT THEY ARE GOING TO DO IF THEY GET HACKED.YOU CAN'T BEGIN TO MAKE THOSE PLANS AND FIGURE OUT WHO YOU WILL CALL AT 1:00 INTHE MORNINGWHEN YOU FIGURE YOU'VE BEEN HACKED. OVERNIGHT YOU SHARE PRICES WILLDROP AND YOUR CUSTOMERS WILL LEAVE YO. YOU'LL HAVE REGULATORYPROBLEMS. IT'S STILL NOT ENOUGH BUT I THINK IT'S GETTING BETTER.

CRAMER: CANI ASK A QUESTION ABOUT JUSTICE.

BHARARA: MYFAVORITE SUBJECT.

CRAMER:INDEED. EXPERT. WE SEE A LOT OF BANKS PAYING BIG FUNDS. BUT THE PEOPLE I TALKTO SAY, YOU KNOW WHAT? THOSE WERE CRIMES THAT WERE COMMITTED BY PEOPLE. ANDWHAT'S HAPPENED IS THE PEOPLE NOW ARE WRITING CHECKS OF SHAREHOLDERS MONEY ANDOFTENTIMES THEY ARE GETTING RAISES WHEN THE BOARD MEETINGS COME AROUND. DOES ITEVER GET TO YOU

BHARARA: I SEE A LOT OF STUFF IN MYJOB. THINGS THAT GET TO ME MORE THAN THE IDIOCYOF PEOPLE COMMITTING FINANCIAL CRIMES ARE VIOLENT CRIMES AND CRIMES OFTERRORISM. WHAT WE NEVER GET TO TALK ABOUT ON CNBC WE JUST HAD A SPATE OFCONVICTIONS UNITERRUPTED OF TERRORISTS INCLUDING SON-IN-LAW OF BIN LADENRECENTLY SHOWING WE CAN YOU TERRORISTS IN FEDERAL COURT. THESE ARE THE THINGSTHAT GET TO ME WHEN YOU TALK ABOUT THE ACTUAL HUMAN SAFETY OF PEOPLE IN A CITYTHAT PEOPLE TRY TO BLOW UP OR KNOCK BUILDINGS DOWN FOR A LONG PERIOD OF TIME.WITH RESPECT TO THAT, DIRECTOR COMEY SAID IT BEST. WHEN WE ANNOUNCE THE GUILTYPLAE OF B AND P, WHICH IS SHAREHOLDERS SHOULD GET REALLY ANGRY ABOUT THESETHINGS. THEY SHOULD NOT BE GETTING ANGRY AT THE PROSECUTORS, THEY SHOULD GETANGRY AT THE MANAGEMENT WHO ALLOWS THIS BAD CONDUCT TO CONTINUE TO TAKE PLACEAND CONTINUE IN A PERVASIVE OVER LONG PERIODS OF TIME. UNTIL SHAREHOLDERS ANDBOARD OF DIRECTORS HOLD ACCOUNTABLE THE PEOPLE RESPONSIBLE FOR THESETHINGS, NO AMOUNT OF PROSECUTION WILL FIX THE PROBLEM.

FABER:FINALLY, CARL ICAHN WILL BE A GUEST HERE LATER TODAY. DOES HE HAVE ANYTHING TOWORRY ABOUT FROM YOUR OFFICE?

BHARARA: I'MNOT COMMENTING ON ANYTHING HAVING TO DO WITH GUESTS ON YOUR SHOW.

FABER: NOGUESTS, YOU DON'T WANT TO COMMENT ON ANY GUESTS?

BHARARA: NO.

FABER:PREET, THANK YOU VERY MUCH, APPRECIATE IT.

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