Hester:	There are intended to be markets where you have to constantly be trying to do things better. And if you fall down on that job, someone else will come in and take your place.
ANNCR:	Behind every major policy decision, every corporate strategy, every Washington power play are the insiders shaping the game and the new rules to win it. The Deciders with Pulitzer Prize winning journalist Brody Mullins and veteran DC strategist, Lisa Camooso Miller.

Lisa:	Welcome to The Deciders. Today’s guest is Hester Peirce, Commissioner at the Securities and Exchange Commission and head of the SEC’s Crypto Task Force. Commissioner, thanks for joining us.
Hester:	Thanks, Lisa, for having me. It’s great to be with you. I have to start with my disclaimer, which is that my views are my own views as a commissioner, not necessarily those of the SEC or my fellow commissioners.
Brody:	Commissioner, so many of the people who’ve come on our show have had a mentor or someone in their lives who sort of helped them along in their careers. I imagine for you, it’s Chairman Paul Atkins. Can you tell us a little bit about him and how he’s helped you along with your career?
Hester:	Chairman Atkins was a wonderful person to work for. I worked for him when he was a commissioner here, and he just was not only smart, but also a very kind person and has very clear views about what the right approach to regulation is. And it’s fun to see him now putting that agenda into practice.
Lisa:	Commissioner, you also spent quite a bit of time in the Senate Banking Committee with Senator Richard Shelby during the 2008 financial crisis. I’m curious, what did you learn from that experience working for him during a time where the stakes were so high?
Hester:	Yeah, it was a really high stakes time and a time where I think you could not help, but learning a lot. I had started in 2008, so it was unfolding rapidly at that point and seeing the consternation and the fear that really was across the financial system and also across the regulatory system, it was quite eyeopening. For me, the most important lesson was that it is really important for people to understand what their exposures are. So private sector actors need to know what their exposures are so that when something happens, they can get their arms around it quickly. I also think that an important companion to that is that they have to face the consequences of those decisions. I think we’ve often tried to take the consequences away and sort of put them onto the government’s balance sheet instead of leaving them with the private actors who made those decisions. So that was something that Senator Shelby, I think really was a strong advocate for responsibility falling on the shoulders of the institutions that had made bad decisions.
Brody:	Let’s talk a little bit more about that. During that time, some people were talking about bailouts for companies, others were talking about nationalizing the banks. And you sort of pressed for this third approach that you’re discussing, which is sort of allowing companies to face the consequences of their decisions. I think you wrote at the time, sometimes you have to allow some immediate pain in order to have a system that is more resilient. Cutting today, do you think there are companies or industries that should be facing the consequences of their bad decisions?
Hester:	When we’re talking sophisticated financial institutions, the expectations should be that they will bear the consequences of bad decisions that they make. So part of what I love about the markets I regulate is they’re markets that are very dynamic. There are new entrants coming in all the time and entrants that incumbents that are leaving when they don’t make good decisions. And that’s part of the natural development of these markets. They’re not intended to be markets where you get to sit on your laurels. They’re intended to be markets where you have to constantly be trying to do things better, more efficiently, serving the markets better, serving investors better. And if you fall down on that job, someone else will come in and take your place.
Brody:	So in that scenario, there’d obviously be some pain to regular Americans and consumers. Do you think Americans these days are willing to withstand some pain?
Hester:	Well, I think we saw a lot of pain to Americans in the financial crisis, but I do think one of the key issues was that financial institutions hadn’t taken into account that there could be bad consequences of the decisions they were making. And Americans, regular Americans were really hurt by that. So I want to look at ways that we can lower regulatory barriers to entry, but also make it easier for firms to exit when they’re not providing Americans with the products and services that they want and need at affordable prices.
Lisa:	Commissioner, you’ve been running the SEC’s crypto task force for the last year. Would you share with us some of the accomplishments and the challenges perhaps that you have faced over the course of that time?
Hester:	Yeah, it’s been a nice opportunity to try to write rules, set up the lines so that people know what the lines are, and then helping people who are within the SEC’s jurisdictional lines to figure out how to interact with crypto assets on behalf of themselves and their clients. It’s been a lot of work and we’ve got a lot of work still ahead of us, but I’m very excited about the work and optimistic that we can continue to make progress.
Brody:	For years, you were sort of critical of the SEC decision making really by suing companies rather than making policy. How have you under President Trump done things differently?
Hester:	Brody, that’s right. I mean, I’ve been a critic of regulation by enforcement in the crypto area and in other areas. I think that when you try to use enforcement to write regulations, it creates some very bad outcomes. One is people don’t know ahead of time what the rules are and how they apply to their unique circumstances. And so they’re trying to get clarity, but instead of getting clarity, they get sued. So what we’re trying to do is, again, clarify when things are outside of the SEC’s jurisdiction, work with people who want to do things that are consistent with the regulatory objectives, help them figure out how the rules apply to the new technology. And then of course, enforcement is a tool that we always have at hand to go after bad actors. And that’s one that we haven’t put away. We’re just using it for more appropriate uses now.
Lisa:	We’ll be back right after this.

Brody:	Welcome back to The Deciders with Commissioner Hester Peirce.
Lisa:	Commissioner, you have sought to be a champion for retail investors, saying that ordinary Americans have been locked out of opportunities because you need to be wealthy in order to participate. What would you change?
Hester:	Well, I mean, if I had a pen that I could write the rules any way I want, I would get rid of the accredited investor definition altogether. I think it’s really contrary to American principles to say to people, “You can earn your money. You’ve worked hard for your money and you can use it for all manner of things, but we won’t let you access this one section of the capital markets, especially now where so much of the growth of a company is happening outside the public markets.” Figuring out a way to get retail investors access to those markets is important. So that’s also part of what we’re working on now at the SEC is trying to figure out what we can do to make it more likely that more companies will go public earlier in their lives and then will stay public.
Brody:	Talk to us about Safe Harbor. Since 2020, you’ve been pushing hard for Safe Harbor really to let blockchain projects sort of have some regulatory relief until they get fully into the marketplace. Can you tell us about your wins recently on pushing Safe Harbor?
Hester:	Yeah. What I was trying to do all those years ago was to say, is there a way that we can enable people to get access to information while also not taking the position that these crypto tokens that are being sold are themselves always and forever going to be treated like securities. So what we’ve done now is the commission put out a taxonomy that identifies when tokens are securities. It gets us to a better place of acknowledging that you can use a token in a fundraising, but also providing some disclosure around that and walking people through how they can do that in a way that’s compliant with the securities laws.
Brody:	And on tokenization, can you explain to sort of regular Americans why this is important?
Hester:	It’s like in the old days you had your stock ownership recorded on paper certificates. We don’t do much of that anymore. And people moved to a non-paper version because that was more efficient in many ways. And I think people are looking at blockchain the same way and saying, “If we tokenize securities, are there more efficiencies that we can gain?” And so we’ll only move to that system if the market collectively decides that that makes sense.
Lisa:	The complexity of this issue is not lost on myself or on Brody. And so we’re really grateful for you sort of talking to us at a level that helps us better understand it. But this seems to be sort of a trend and a through line in the way that you yourself communicate. And that includes using some creative names for your speeches. My favorite is peanut butter and watermelons. You’re making a point about the financial middlemen, but would you tell me a little bit more about why that has become your brand and way of communicating there?
Hester:	Well, I think some of these issues can be a little bit impenetrable for a regular audience and frankly boring for a lot of audiences. So sometimes I think bringing it home with telling a story can be helpful. And ultimately the capital markets are markets that belong to all of us. They’re not the regulators markets and they’re not the province of just a few Americans. They really are essential for the growth of the economy in this country. And I think trying to talk about these issues in more accessible ways is part of my attempt to say, I want everyone to get excited about these markets and I want them to not be scared off by the technical or boring nature of some of the terminology.
Brody:	So let’s go deeper on watermelons. You don’t like watermelon. More importantly, your grandfather doesn’t like watermelon. So he would put peanut butter on his watermelons, and then tell us the point that you’re trying to make there with middlemen.
Hester:	Yeah. So my grandfather did eat a watermelon with peanut butter. And so one day he was making a phone call and at that time they had operators and the operators said, “Hey, are you Mr. Peirce, the one who puts peanut butter on its watermelon?” And so that’s kind of a funny moment, but it made me think of how uncomfortable it would be if he were making a call that maybe he didn’t want his neighbor to know about. And so I think it brings to mind the system that we’ve put in place for third party financial institutions to essentially be conduits for our personal financial information to the government. There are good reasons for that. I mean, we want to stop bad actors from using our financial system to do bad things, but in the process, I think we’ve lost the thread on some constitutional protections that Americans expect in other parts of their lives. And I would argue the Fourth Amendment has been wiped away by something called the third party doctrine, which is essentially if you provide information to your financial institution, you’ve lost your Fourth Amendment protections. And I think this is a moment for us to really sit down and think about whether we have the balance right, because financial transactions can reveal a lot about you as a person. And I think the government needs to be really careful about trying to grab all of that information.
Brody:	You had another fascinating speech called Numbers Go Down. Tell us what that was about.
Hester:	The common phrase in the crypto world is number go up and recently the numbers have not been going up in terms of the prices of crypto assets. And so my point in that is just to say the SEC’s job is never about whether the numbers go up or the numbers go down. Our job is to write rules for things that are securities. And so it’s not succeeding or failing if the numbers are going up and down. And I think that the most important point is that if we want durability of regulatory policy, the best way to get there is to build useful things that meet actual people’s real needs. And I love being part of that from the regulatory perspective of just building capital markets that support people as they try to solve real problems.
Brody:	We’ll be back right after this.

Lisa:	Welcome back to The Deciders with Commissioner Hester Peirce. Last year, the SEC declared meme coins aren’t securities. Why was that the right decision?
Hester:	My job as a securities regulator is to look at the laws that Congress wrote and the powers that they gave the SEC and to use those powers, but not to try to take jurisdiction that’s not our jurisdiction. So the staff did put out a statement with respect to meme coins. And the idea was to tell people who are buying those, you’re not covered by the protection of the securities laws. And it’s useful for you to know that. It’s also useful for Congress to understand that as Congress is drafting legislation in this area.
Brody:	Let’s jump to Congress for a minute. Congress took action last year on a major crypto priority. This year they’re working on another one. I know this is not your job, but do you think Congress have been working quickly enough on crypto regulations?
Hester:	Yeah. Well, we started with 2008 and the financial crisis and Dodd-Frank came out of that. So I was working on the staff in Congress as Dodd-Frank was being drafted. And I know just how difficult it is to draft a big piece of legislation. And while the Clarity Act doesn’t cover as many facets as did the Dodd-Frank Act, it is quite broad in what it’s trying to accomplish. And so drafting something like that is just hard work and it just takes a lot of time. The House has already made a lot of progress on that. The Senate is working on it now and I’m very impressed and I don’t envy them for the task that they have on their plate.
Lisa:	You’ve been a commissioner for eight years and you said that you didn’t necessarily want to stay past 2025, but it’s now 2026. So we’re curious, what are your plans and what do you plan to do next?
Hester:	Well, I do have to leave by the end of the year. And so I’m looking forward to being able to step back and let someone else take this job over and do it with excellence. And I’m looking forward to watching that from the outside. And I don’t know, maybe you’ll find me teaching in a classroom or doing something a little different than what I’ve been doing here at the SEC.

Lisa:	So Commissioner, during every conversation of The Deciders, we ask three questions. And so our first question is, what’s the decision in this past year that you’re especially proud of?
Hester:	I mean, I am very proud of the personnel decisions that I’ve made. So we have a wonderful crypto task force and it’s made up of people from within the commission, drawn from the commission staff. We brought in a few people from the outside as well, and they have worked so well with staff throughout the building, throughout the SEC. And it’s really been wonderful to see.
Brody:	What’s a decision in the past year that you’d like to do over?
Hester:	Oh, well, that’s a good question. I knew going into this year, especially starting in 2025 when the crypto task force started, I knew that it would be difficult and I knew we had to gather a lot of written input, meet with a lot of people. And so I don’t regret that process. I think it’s been integral to our being able to produce good work, but if I could do it, somehow have started that process earlier, that would’ve been wonderful so that we would’ve had a running head start. But I think that would’ve been difficult to do given the circumstance.
Lisa:	What’s Washington not thinking about right now that they should be?
Hester:	Oh, well, I mean, I always think that Washington ought to be thinking about the debt, the national debt, because that is something that I think about. It’s beyond my purview as a securities regulator, except that the better job we can do helping to foster economic growth in this country, which I think the capital markets are so essential to, the better we can address the national debt issue.
Brody:	Commissioner, thank you so much for joining us on The Deciders.
Hester:	Thanks for having me.

Lisa:	We’ll be right back. 

Lisa: That was SEC Commissioner Hester Peirce. Brody, what’d you think?
Brody:	Well, it’s interesting, Lisa. She talks a lot about letting the marketplace take care of itself and having companies fail as a result of their bad decisions. But at the end of the day, it’s so hard for regulators or members of Congress to allow Americans to feel the pain, which is one of the problems we have in government today.
Lisa:	No, I really appreciated that too. And I like the fact that as a communicator, she is finding ways to share complex issues with everyday audiences every day in a way that we can all understand.
Brody:	Thanks for joining us on The Deciders.
ANNCR:	The Deciders is hosted by Brody Mullins and Lisa Camooso Miller and produced by Dave Tobey. Subscribe wherever you get your podcasts. Find more online at deciders.show and follow The Deciders on YouTube, LinkedIn, and X.