Gurbir Grewal has held some of the most demanding jobs in government, but he is the first to tell you he never planned any of it. We sat down to trace how a kid who wanted to write the next great American novel ended up running enforcement at the SEC, and what gets you through the doors that close along the way. As a fellow New Jersey Punjabi, I had a personal reason to want to understand the principles that carried him through each turn.
Top Insights
- Grewal started at Bates College hoping to become a fiction writer, transferred to Georgetown's Foreign Service School for a diplomacy career, then watched a State Department hiring freeze close that door before he ever took the exam.
- He decided to go to law school on a whim after watching Jack McCoy on Law and Order, and only entered public service after 9/11, when being made to feel un-American pushed him toward becoming a federal prosecutor.
- The science training from his premed years kept resurfacing in unexpected ways, shaping his patent litigation work and the methodical way he approaches decisions.
- As Bergen County prosecutor he visited schools nearly every Friday, partly so a Sikh kid being bullied would see someone who looked like him in a position of authority; one mother later told him it kept her son from cutting his hair.
- He runs meetings by asking the most junior person first, a habit learned from watching everyone parrot the police chief if the chief spoke first.
- A Jim Comey speech about a "reservoir of trust" that takes generations to fill and can be drained in an instant became his guiding idea, and shaped how he handled the Ernst & Young case, where he insisted on rare admissions of wrongdoing rather than the usual neither-admit-nor-deny resolution.
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Full Transcript
Khurram Naik: This is Khurram with Khurram's Quorum. Today's interview is with Gurbir Grewal, who has to be one of the most interesting people in government. It's hard to imagine someone more down-to-earth and relatable in the offices that he's held. As a fellow New Jersey Punjabi, I've been to all the spaces he's been, including his groundbreaking tenure at the New Jersey Attorney General's Office and now his role as Director of the SEC's Division of Enforcement. In our interview, we took some time to explore the principles and experiences that shaped his path. Here's Gurbir.
Khurram Naik: Last we discussed, I heard an interesting part of your story where I didn't realize you had this liberal arts college dream once upon a time. You spent, I think it was a year at Bates, which is a really beautiful, small private school in Maine. And so my understanding is you went there because you wanted to study poetry. Tell me about that, is that right? Poetry?
Gurbir Grewal: Not poetry. I wanted to be a writer. So I wanted to write fiction. I just thought it would be great to go to like this small liberal arts college in the woods in New England somewhere and just find myself and express myself and do something super creative. And so I chose Bates College in Lewiston, Maine.
Khurram Naik: So that's not super common among our crowd, right? I mean, that's not like a famous path that people are setting out to do.
Gurbir Grewal: Not that I know. I think if there's a surefire way to disappoint your parents as a South Asian kid, it's to say, listen, you know, that doctor thing, I'm not going to pursue a degree in medicine. I'm not going to pursue an undergraduate degree in science. I'm not going to be an engineer. I'm not going to even be a lawyer or computer programmer. I'm going to go to a small liberal arts college in Maine, which is going to cost an arm and a leg. And I'm going to pursue a creative writing path and try to write a novel or do something creative, which was not well received. I don't know what your upbringing has been like or what the preferred career choices were in your household. I'm an only child also. So all the eggs were literally in one basket. That's what I wanted to do. And I think part of it was a function of my folks not knowing the system. And me just saying, yeah, no, this is a great college. Just, you know, I need this check to put the application in. Yeah, I got in. It's a top liberal arts college, and sort of keeping them in the dark on certain things. Because we didn't have our parents, at least I didn't, helping edit college essays or helping me prepare for SATs or drilling me on SAT words. And I was alone, and it was just all me. I don't think I had the same sort of support that my kids now have. They've got counselors who are super into their development. It just was different then. And so, yeah, I did that. I went up to Maine. It was great. They obviously wanted to address diversity issues. So they brought me up for this like accepted students of color weekend. It was in the spring. I got on a bus from Port Authority, and it was just like a bus full of, you know, minority kids from the New York City area going up to Bates. And I'm like, wow, this is pretty cool. It seems like a pretty diverse crowd. It's got to be great when we get up there. And it's not a very diverse place, right? You're in the middle of like rural Maine. The college is the only thing in this old mill town. And it's tough, but it was a really accepting student body. I will say that. And I spent the first semester there taking English classes, taking classes in rhetoric. They had a major, you can major in rhetoric. They had a great debate team. I joined that, the Quimby debate council. And, you know, I took a class in foreign policy. And I remember the professor's name, Jim Richter. I loved that. I had never even thought about international relations. And that prompted me to look at the course catalog at Bates. And it's a small catalog. And it became apparent to me that if I tried to pursue something different, I'd run out of classes in a matter of a year or two, right? And so I had a roommate who was looking to apply to different schools to transfer. He wasn't happy at Bates. And I was becoming increasingly unhappy as the winter came around. The Maine winters are tough. And so I started looking at transfer opportunities. And I took one of his transfer catalogs. And I looked at the Georgetown application, which was for their Foreign Service School. And I thought it'd be a great opportunity to like go try to be a diplomat and represent the country, represent the United States in far-off places. So that's what I did. So to answer your question, yes, I had a very stereotypical South Asian background where yes, I was expected to go to med school, blah, blah, blah. I studied biology in college, premed, at a technical college. And then I kind of figured, okay, that's what I want to do. And so I had a circuitous path that eventually led me to law school. But that training that I had, the science training, popped up in different ways throughout my career. You know, I ended up doing patent litigation, which heavily leaned on that science background. But then just I think in general, like my inclination, which is very heavily influenced by the set of ideas that I acquired there, just a set of principles, methodologies you learn when you study the sciences, I think has affected my decision making since then.
Khurram Naik: So in what ways do you think — I mean, I know it's not so rare for lawyers to have the kind of humanities background that you've had. But what are some of the ways you think some of that early training has echoed throughout your career? What are some of the ideas you mentioned? Because of the professor and his influence, are there ideas that you can trace to those formative years that have just kind of made a presence in your career?
Gurbir Grewal: Sure. I think at Bates, I really took it seriously about learning to be a good writer. They had a writer's workshop and they had a place — I forgot what it was actually called — where you can go if you're working on papers, you can sit down with professors who are there to help you edit your essays and help you think about making your writing more clear, whether it's creative writing, whether it's something more for a history class or what have you. And I think that was the first time where I really appreciated the whole editing process about just sort of continuing to refine your written work product to just make it better and make it crisper and to make it more economical, really, just to be more economical with your words. That was a takeaway from my experience at Bates, and I think everywhere along the way, I've sort of built on that. I've been known to be a heavy editor, that if I do get into a document or into a speech or something that I'm working on, I'll really spend time with it and I'll really sort of edit things. And then I'll sit down with folks to explain to them why I made certain changes, why I moved things around, because it's hard, having been an associate at a law firm, just to get a document back where it seems like somebody just opened up a red pen and just, you know, blood on the page, and not giving an explanation. It's hard to take that sort of feedback. And so I think that's one thing. The writing process I picked up early on. I think, interestingly enough, at Georgetown, where my major within the Foreign Service School touched on diplomacy — that's a skill you employ in all aspects of life. You're studying world conflicts and you're studying, you know, resolutions to conflicts and how things resolved in certain parts of the world and how they didn't, and the value of diplomacy. And I think in many ways, a lot of what we do as lawyers in litigation is diplomacy. We're trying to find a middle ground where we're addressing our client's needs or, in my case, you know, meeting the — you know, acquitting what we're trying to do as a regulator, our responsibilities, and understanding that, you know, there are always two sides to the story. There are mitigating factors on the other side, and just trying to find a middle ground. I think that's a through line in all litigation because not everything ends up going to court and not everything in court goes to trial. I mean, you have judges pushing arbitrations and mediations and ways to find resolution short of trial. So I think that's something else, you know, as I think about it, probably is something that I've kept with me from the training at the Foreign Service School. So those are two things that I could think of.
Khurram Naik: Yeah, I like that. Is there a decision that you've made that, I think, is traceable to some model of some specific conflict — instead of, okay, in this specific conflict, this was the issue, this was the resolution, or this was the thing that wasn't resolved. Was there something that tangible for you that you can trace? Or, I don't know, like some sort of game theory where you're sort of mapping things out and figuring out, if this happens and this happens — or something more anecdotal, something more practical, I would say, like not this abstract thing, like, oh, this is just like how the British dealt with this thing a little bit.
Gurbir Grewal: Oh, no. Not consciously, maybe. Maybe, you know, unconsciously. But I think when you look at conflict — and that's what I studied. I took a class called Map of the Modern World, where your entire class revolved around looking at why borders formed in a particular place, and the conflicts and the divisions that fell along those borders. And understanding, you know, sort of the religious fault lines, understanding cultural fault lines, understanding political fault lines, and how they've resulted in the map of the modern world that we have today. And so I think that was something that I took with me to really sort of understand, you know, why does this happen? Like, to try to make sense of what's happened in the Indian subcontinent, right? What's happened in all parts of the world? I had a professor, John Esposito — this was in the early 90s, right? — who taught Islam and politics. And we were talking about this, who talked about, you know, the issues that we're dealing with today, talking about the Muslim Brotherhood in Egypt at the time. And, you know, you see the through lines in all the issues that we've seen play out over the last 20-plus years. So it was a great education in that regard as well, understanding everything that was happening in the world and understanding where those fault lines were and what the basis for those fault lines was, or what caused those fault lines, in other words. And so I think — no, I can't point to anything that I've studied where I said, oh, you know, I remember looking at this conflict, so there's some parallels here in trying to navigate a path forward with law enforcement in New Jersey as we're trying to negotiate a policy. But the core principle, right, to understand why people get so dug in to certain positions, and understanding that you need to show a degree of respect, because while you might not agree with where they're coming from, they are adamant, right? They are adamant and they are dug into that position, and you're not going to convince them otherwise. But there's an opportunity through conversation to find a middle ground. And I think oftentimes we overcomplicate policymaking, we overcomplicate litigation. I mean, we overcomplicate these things, because at the end of the day, it's just about sitting down, being transparent, being open — as I was as AG when we're dealing with difficult issues — this is why I'm doing this, right? Being clear and explaining what you're doing, why you're doing it, being willing to hear from other people and then not be afraid to move on your policy and say, you know what? That's a good point. That open conversation, I think, is the path forward on so many of these issues, and we tend to sort of overcomplicate things.
Khurram Naik: Who do you think will be models of that?
Gurbir Grewal: Well, I mean, in my own experience — I can't... I'm sure if I thought long and hard about it, there's somebody out there, you know, who I see is able to go into a room, listen to different sides and find a middle ground. I mean, I think Obama was somebody who had that ability, I guess, to really hear people and see them where they were and, you know, sort of exude compassion and understanding of people's perspectives and, you know, explain his policies in a clear manner. You couldn't win everybody over, but he was a great communicator in that way, I think.
Khurram Naik: So I think we've already kind of had some things in your career, some straight lines through the different experiences you've had, as AG, in your current role as well. But I kind of want to start earlier and just kind of go through chronologically, because I think something to be — that we've talked before — that would be interesting is the part of your career, or the ways in which your path is not linear. I think it would be very easy to conclude, you know, looking at the trajectory of your career, that it has been this one step leads to the next and it's a logical next step. And, you know, I think you have a difference of opinion on that. So I want to explore that. So what do you think is the best jumping-off point for that? Do you think it will be starting when you're kind of a prosecutor? What do you think is the first nonlinearity you think you experienced, let's say, in your legal career?
Gurbir Grewal: So I'd start, I'd go back to the decision on what to study and where to go to college, right? That's what I mean by non-linear. And I talk about this quite a bit when I have the opportunity to talk to younger law students or to people who are looking for career advice. And the message that I try to share with them is that you need to be resilient, because you may think that this is the path for you, but there might be something that gets in the way and you may have to shift course. And that's what I mean by non-linear. For example, like we talked about, when I graduated high school, I wanted to be an English major. I wanted to write the next great American novel, as we were talking about just a moment ago. I went to Bates, a small liberal arts college. I got there. I realized very quickly that I wasn't that great at creative writing. I realized very quickly that I didn't want to be in Maine. I realized very quickly that a small liberal arts college wasn't for me. And I got exposed to something else. I got a taste of an international relations course, which pushed me in a different direction. And that direction was to consider going to the Georgetown School of Foreign Service to pursue a degree and get into the Foreign Service, to take the Foreign Service exam and be part of the diplomatic corps and go travel the world and represent the country. And so, you know, I went to Georgetown. I was lucky enough to get in. And I was about to graduate. There was a hiring freeze at the State Department. President Clinton said, we're not increasing the size of the federal government at this time. We're not going to offer the Foreign Service exam at this point. And so I didn't have a plan B at that time. I had all my eggs in that basket, that I wanted to stay in DC, study for this exam and go down this career path. But that door closed as well. And I came back to New Jersey and did not have a job and just really didn't do much. Frankly, I had the luxury — did not do much at that time. A lot of folks don't have that luxury. And in those months — and I joke about it quite often — I was watching television and I was watching Law and Order. And I saw Jack McCoy and I said, oh, this is pretty good. I think I could do that. I've been good at talking on my feet. I've done debate. And so why not consider law school? And so when that Foreign Service career wasn't available, I pivoted to go to law school on a whim, really. On a whim, I go to William and Mary because I wanted to be back in the DC area. And I graduate from William and Mary and I get a job at one of the biggest law firms in Washington, DC, a litigation shop. And I would have stayed there. I would have been a litigator. I had no desire for public service or to enter public service. I enjoyed being at a big law firm. I enjoyed all the trappings that come with it. My own challenges with big law, which I'm happy to talk about as well. But again, another event happens, and that was September 11th. And that was a turning point for many of us because you really sort of think about what you're doing then and there, and you think about all you're dealing with. I mean, we're dealing with an incredible tragedy as a country, but then we're also dealing with another tragedy that hit a lot of us and hit differently for us. We were made to feel as if we weren't American because of what we looked like, the color of our skin, our names. And I recall leaving the office after watching the towers fall with my colleagues, feeling that we were all coming together, walking onto the street and seeing people look at me and say things to me. And it already started that first night. And I remember my mother called me and said, hey, you know what, be a little careful today, because people — Sikhs who were in the city, working in New York City — had a tough time leaving and they were being targeted and harassed because of what happened. And I said, what are you talking about? Like, why would anybody do that to me? You know, like I was born here, like I'm an American. And it was within a matter of days where that notion just was completely wiped away. I was not American to many people. And so that set me off to think, you know, why is that the case? What can I do about it? The more I thought about it, what I could do about it is go out there and tell people who I was, and to tell them why you don't have to look a certain way or believe a certain way to be American. And the way I could do that, in my mind, because I was a litigator, was getting into public service. And so that tragedy and that patriotism that I felt as well pushed me to enter public service, to become a federal prosecutor. And, you know, I don't want to keep going on and on, but it's just one thing after the next in that same sort of vein that's happened to me in my career. I was so happy being a federal prosecutor. It was so rewarding. I was promoting understanding through my work. I was getting up in court each and every day. And I can't tell you, unless you've done it, to get up in front of a lectern and say your name and say you represent the United States — there is, the first time you do that, the second time you do that, every time you do that is such an incredible privilege. And it's really, at least to me, it was. It never became old. It was always exciting. I always felt nervous when I was saying it. But I knew, like, looking in that courtroom, there are agents waiting for their next case, there's members of the public there. There's a judge. There's a jury. You could be trying a case. You could be in front of a grand jury. They're all looking at you and seeing the United States. And so that's why I did that. And I would have continued to have done that, but for a call I got from Governor Christie. I ended up initially at the US Attorney's Office in Brooklyn. I moved on to the US Attorney's Office in Jersey. Governor Christie, his office called me and asked me if I had any interest in being the Bergen County prosecutor. That's the county in which I live. I had no idea what the Bergen County prosecutor does. None. Because my experience was in the federal system. So the person's on the line with me. I go online as he's talking to me and I'm looking up the Bergen County prosecutor's office — chief law enforcement officer of Bergen County, New Jersey, a county at that time of like 900,000, 70 municipalities, 72 police agencies. That's a uniquely Jersey thing, that there were more police agencies in the county than there were municipalities, and there were two municipalities that didn't even have police departments. It's a lot of law enforcement — 4,000 law enforcement officers, the chief law enforcement officer. I'm like, this would be great. Because it allows me to continue in public service, continue to give back, continue to promote understanding, continue to do all that right where I live. And at that time I had three young girls and I said, this would be great. How great would this be for that next generation that I could go to their schools, that I could be around them and people will see in that space, that again, that same thing, that this is part of America, that we are part of America. Because these are those frontline jobs that are so uniquely associated with what it is to be American. It wasn't by happenstance that all these new immigrant generations gravitated to policing and gravitated to firefighting in New York City and other parts of the country, whether it's the Irish, whether it's the Italians — it was intentional, I think. And so I interviewed with Governor Christie. I remember walking in the door to his office and almost like sort of confessing as I walked in that I'm a Democrat. And he looked at me because he was a career — don't worry about it. I don't care about your party. I just want you to go do this job, given who you are, your reputation. Just call balls and strikes and that's all I want. If anyone gives you crap — and he used a different word — no one's going to run up to Bergen County and defend you more quickly than I do. Because at that point, the context for that is he had appointed Sohail Mohammed as a superior court judge, the first Muslim American superior court judge in New Jersey. And I think he must have been campaigning or was somewhere out on the trail, and a woman criticized him for appointing Sohail Mohammed, saying that he would impose Sharia law in Passaic County. And he told her that she was bat-blank crazy and defended him passionately. And based on that, he said to me, if anybody ever gave you crap — and he used more colorful language — I'll be there right by your side. That meant a lot to me. And so I had the opportunity to go to Bergen County to be the county prosecutor. It was incredible. I'm in the community. I'm in schools. I'm in church basements. I am there working on issues that I think are important, like building police-community relations. This is well before all the recent events that we experienced over the last several years. But even then, this was an important theme for me, given other incidents that happened that really raised tensions between law enforcement and some of the communities that we served in that county. And importantly, I got to go into schools, as I said. And the reason that was important for me — and I shared this when I spoke at the event that we were both at — is I know how hard it is to be... and again, I don't know your experience, but I know my experience. I know how hard it is to be someone who looks different and who wears a turban or wears a patka or wears their hair, or grows their hair as a young Sikh boy. I remember being tormented. I remember being bullied. I remember being ashamed of what I looked like, trying to sort of hide into the back of rooms or disappear. And I wanted to go out there because maybe there was a kid who was going through something like that but wasn't tough enough to get through it, or maybe it affected them in a certain way. I wanted to be there so they saw somebody who looked like me in those classrooms. And so we did classroom visits every Friday to talk about the opioid epidemic. I went nearly every Friday, to as many as I could, not because I was an expert on the subject, but because I wanted to be there for that kid or any other kid who felt bullied or other, or felt targeted because they may worship differently or looked different than their classmates. And that experience — because after one of those presentations, I did have a mother reach out to me at the gurdwara where we worship here in Glen Rock, saying, hey, you visited my kid's class. You don't know how much that meant. He was on the cusp of wanting to cut his hair and lose his identity, but you being there just sort of steeled him up a little bit and gave him a little bit of confidence. Again, I don't know what happened to that kid. I don't know if he's still maintaining his articles of faith, but I know at least for the time being, I made it a little bit easier for him. And so I continued to do that. And it's the greatest job — one of the greatest jobs I've ever had. But then I got recognized for the work I was doing there and I got called by Governor Murphy. And that set me on the path to be the attorney general, which I did for three and a half years. And I was doing that work and I got a call from the SEC saying, hey, you're doing terrific work in these spaces. We have an opening for our enforcement director. Would you consider coming and talking to us? And so that's what I mean in a long-winded way about things not being linear. I went from one career choice, forced into another one, pursued a career in law, an external event — a massive, incredible tragedy — forced me to think about public service and think about what it means to be a Sikh in America at the time. And what it means really to try to do what I can to promote understanding and to make it better for others, because there are so many people who can't articulate who they are and are targeted because they're new immigrants, or they are targeted because they don't have that same ability to explain who they are. And they may feel like they need to hide in the shadows. And so that's what set me on that path. And then doing that work, it got recognized along the way, which prompted other opportunities. And so maybe that's not the right — non-linear is maybe not the right word, but that's how I described it.
Khurram Naik: I think maybe another lens on it — I think your point is this is hardly some foreseeable process. And if that's the point, then I think there's more we can dive into, these decisions you made, to really understand what were the jumping-off points you were considering. Like what was the relevant opportunity cost? What were the trade-offs? Let's go back to when you were a US attorney and you got this call from Chris Christie saying, hey, you can be a county prosecutor. What were the trade-offs you had in mind? Because the trade-offs going from big law into public service were pretty obvious — comp, and that sort of prestige, whatever. And clearly, there's your might this value that you had of, hey, it's really important as a Sikh to be an advocate for myself and others. But so what were the trade-offs that you had to consider and confront? What was the most challenging part of that decision?
Gurbir Grewal: Well, the trade-offs, I mean, they're obvious. I think at every point, as I'm getting older in every job, now I have children, and I'm at the US Attorney's Office. And in my mind, had I not gotten that call, my career path is, hey, you're the chief of the Economic Crimes Unit here at the US Attorney's Office. You're overseeing the cyber unit. You're overseeing the prosecution of every major white collar crime in the District of New Jersey. You know that the people who have held this job before you end up going to lead a practice group at a big law firm and end up making a great career out of it, end up making good salary and just a terrific opportunity. You know you could do that, right? Because you've prosecuted these cases, you investigated these cases, you know what it takes to put them together. And you know how effective defense attorneys can take them apart as well. And so I think very much in my mind at that point was like, okay, let's do this for a couple more years. The kids are young, and then we'll, you know, we've done our public service. We've — that motivation that brought us here to promote understanding, to really go out there and make a difference — I think, okay, you've made that difference, right? Like you see more and more people now following your career path. And then when you get that call, you reset all of that. And you start to think about it through a difference. And you push the career and financial opportunities to the side and you start thinking about, wow, this is another level. This is — now you're setting policy. Now you're in a more public facing role. Now you're the person in this county of nearly a million people. And you have supervisory authority over law enforcement, and you get to, you know, you go out in the community and you speak for law enforcement and you're coming up with public safety strategies in your community. The profile is greater. So the difference you're making by just showing up to work, looking the way you do and believing the way you do — I mean, the ripple effects of that are just, I don't think you can measure them, because putting aside the young child that I talked about, I've heard it from adults who might just wear a bandana to work who said, you know, I go to the county building and I see your picture in the lobby in Bergen County, and that gave me a little bit more confidence to wear my turban to work. I showed my boss your picture and said, like, that's me too. Those sort of things, right? What value do you put on that? I don't think you can. And so to me, that opportunity, that ability to make that sort of difference, the ability to give back in that way and make it better for others — I could live in my current position and push that law firm salary aside and take that opportunity to make a difference and do it for a little while longer. That's what I told my wife. Let me just do this for a little while longer. And then I think I could find that well-paying job and, you know, pay for college for the kids and do all those things that would have been a little bit easier to do had I gone right to the law firm.
Khurram Naik: So at the time you made that decision, you were in the US attorney's office and you said you had no idea what the Bergen County prosecutor did. So how did you size up the opportunity? I mean, the things you talked about, it seems like you could only really discover by doing the job. So how did you get the condensed version of the impact ahead of time, at the time of the decision?
Gurbir Grewal: So one of the things Governor Christie was doing was — at the time he became governor, he wanted to clean up local prosecutors' offices throughout New Jersey. You're not only the person who's running law enforcement in that county, you run a huge office, you're hiring prosecutors, you're hiring detectives. And what that in some places means is it becomes a patronage mill. And the governor wanted to break that. He didn't want it to be like, oh, you know, we're going to hire only friends and family. We're only going to do this. You know, we're going to look the other way on these crimes. He wanted somebody who was a federal prosecutor to come in there, again, like I said earlier, to call balls and strikes. He had put in place a couple of my former colleagues in other counties. So I had a friend who was the Middlesex County prosecutor at the time, Andrew Carey, who was a colleague of mine as a federal prosecutor. I had a former colleague, Grace Park, who he had put in Union County, another big county in New Jersey. And so, you know, after doing the Google search and telling the counsel on the other side that yeah, I do want to continue this conversation, of course I did my diligence in talking to those folks and saying, hey, Andrew, what's this all about? Like, what does this opportunity look like for you in Middlesex? And going there and visiting him and assessing, you know, and just seeing it, seeing the respect he commanded in the community among law enforcement, going and visiting his office and seeing how he had things organized, and learning that way and talking to, like I said, others who had done the job or were doing the job. That's what really truly gave me the understanding of what that role looks like.
Khurram Naik: And so I understand the opportunity cost of going to private practice, and that's very steep. I understand it's a lot to forego. But in terms of moving from US attorney's office to Bergen County prosecutor to AG to head of enforcement at the SEC, in any of those moves, was there any downside that you faced?
Gurbir Grewal: Yeah, I think one of the things I didn't realize is when you go from being the chief of the economic crimes unit at the US Attorney's Office, sure, you'll do high-profile cases, but you're not in the public limelight. You're sort of, you know, you're there. You're doing your work in court. You're not making statements to the press. You're not giving press conferences. When you become the county prosecutor, you're the voice of law enforcement. You're giving press conferences, usually when something bad happens, or you're giving press conferences when you're announcing an arrest, or when you're issuing a new policy. You're also more high-profile when you're making decisions. When you're making decisions to — you know, in my case, I had a police chief in one of my towns when I was a county prosecutor who had sent an email to his cops in his town that seemed to encourage them to engage in racially influenced policing. One of the authorities that I had was to take over that — I had the ability to take over that police department, remove him from his position, relieve him of his duties and put in my own officer in charge from my office and investigate what was going on there. I did that. He was a very popular police chief. That subjected me to all manner of scrutiny and criticism in the papers. So those are things I didn't anticipate. Those are costs, or whatever you want to characterize them as, that I didn't fully appreciate would be associated with being in the limelight. So I learned very quickly that I needed to have super thick skin, because no one's going to take the time to understand every issue. People have very strong beliefs and people are going to come after you. And they're going to come after your family. They're going to — you know, somebody's going to say something to your children in school like, oh, your dad did this, you know, did this yesterday, or your dad was in the paper for this today. You know, that's tough. And those are things that only increased when I became Attorney General. Those types of experiences — and it became more and more difficult for me to deal with them as my children became older, as they began to read the papers and understand, you know, what was happening in the attacks. The political climate over the last, you know, five to six years has deteriorated, and our discourse has deteriorated. And I'm in a high-profile position during that time getting hit from all sides, and my children are hearing about it. And it's hard to shield it from them. So, and my wife as well, who has patients, whose patients would say things to her. You know, she didn't sign up for this. My kids didn't sign up for this. So those were things that I didn't fully anticipate or appreciate I'd be dealing with.
Khurram Naik: And in making these transitions, I'm really curious about the connections between these. Because it was interesting to talk about, hey, how did your training in rhetoric impact later on? How did your diplomacy experience impact later on? So I think there's some interesting mixing and mashing to do. One of the ways in which your experience as Bergen County prosecutor — do you think it uniquely influenced your role now as head of enforcement for the SEC?
Gurbir Grewal: I don't think it's directly influenced my enforcement priorities. But I think what I learned when I became the Bergen County prosecutor, where I come into an organization of 350-plus people with a $36 million budget where I have, you know, I think at the time 110 detectives, 60 to 70 prosecutors, and then the rest are support staff — and then, you know, supervisory authority over law enforcement across the county. I learned a lot about how to run an organization, about how to make sure that we are hiring and retaining the best people, which I learned very early on is important. You're only as good as the people around you. You're only as good as the prosecutors you hire and train. So that was something that I really placed an emphasis on, particularly on the law enforcement side, because these folks are out there. They have police powers. How do you make sure, you know, through the interview process or the background check process, through hiring people, we're going to do that role or do that job the right way? So, you know, learning to build teams at that local level, learning to motivate folks — that's a skill that I picked up, I think really on the fly, on how to manage and motivate folks, how to empower folks to make sure that they have the tools to do their jobs, and how to hold people accountable when they fall short. I think those are all things that I picked up at that county level. You know, one of the things that I did — and really this was through trial and error — I got to the prosecutor's office and I would get a briefing from one of my units, you know, because one of the things I wanted to do was not be in the weeds and micromanage, but I wanted to have an understanding of everything that was happening, because if something happened and I got stopped on the street and somebody said, oh, you know, you're investigating this matter or that matter, like what's going on with it? I didn't want to — there's no way I would know everything about it, but I wanted to know, generally, what was going on, what was on our docket. So I would sit down periodically on a regular schedule with all my units. I'd have the command staff for that unit there. I'd have the chief on the prosecution side there. And I would go through case reviews, and when we had to make decisions on tough cases, I would go around the room and make sure I was being collaborative and letting people, you know, share their views, because sometimes you're going to say, no, we can't move forward, or sometimes you're going to say, we're going to move in a different direction. That works if you hear people out, if you listen to them and you tell them why you're doing something in a certain way and you're clear about it, you're intentional. But when you have cops in a room, if you ask the chief first what he thinks, then everybody else is going to parrot what the chief said. So it's a small experience, but now, when I have a room full of folks, I go to the most junior people first on a team and ask. I'm like, you know, you're closest to this case. Tell me what you think. So that was really good on-the-job training. I also got a lot of on-the-job training dealing with crisis. You know, when you're dealing with a murder or you're dealing with some event that's happened and being on the scene and knowing how fast things move and how, you know, the situation on the ground changes so frequently — that sort of trains you up for dealing with those sort of things in general. You know that you need to be clear-headed. You need to get all the information in before you speak on it, because you can go out at hour one and say something, and it could be completely wrong at hour two. And the more you do that, the more credibility you lose. But there's always that tension of trying to get out there more quickly and saying something more quickly. And so, building on that at the AG's office, where now I'm responsible for 8,000 people across, you know, 15 or 16 divisions at the time — I couldn't do that, you know, with everybody. I couldn't have that manner of, you know, that level of interaction with everybody. So I learned about process and building out good structure and having a good system in place where, you know, I have a number of direct reports that I hear from every day as to what's going on. And they are the ones who are managing down and then reporting up in the right way, and learning how to build out that structure, learning also to create priorities, because, you know, if everything's a priority, then nothing's a priority. And that's something I learned very quickly. So when I got into that role, every speech I gave, every opportunity I had to share with folks what my values were, what my priorities were, I would always talk about four things. These are the four things that we're prioritizing at the AG's office. And they didn't change over the four years that I was there. And so I think the goal of that was, if people looked anywhere or asked somebody, you know, what's the AG focused on? It was really built out around our priorities, whether it's reducing gun violence, addressing the opioid epidemic, addressing issues of police-community relations, and building out our capacity to engage in affirmative civil litigation, which was the work that we did against the Trump administration and using, you know, our power in court to stand up for our residents. So that's something that I picked up in that role, that I really needed to be intentional in my communications. And all that's come together in this role in the same way. I mean, a lot of what we do here is blocking and tackling, and it's reactive. You know, crimes happened or, you know, frauds happened and we're going in there to investigate it. So it's really hard to say, oh, affirmatively, we're going to do these three things or focus only in these three or four areas. But you can still say, you know, here's what's important to us. We're obviously going to continue to cover the waterfront of securities fraud violations. But we're going to pay a particular emphasis on these three or four spaces, because that's what promoting investor confidence in our markets and restoring trust in our markets requires. And so that's the way in which we're operating, and just being very clear in our messaging. And those are all skills I picked up along the way.
Khurram Naik: I think you talked about a lot of interesting components that change over time. I think it would be interesting to explore how they change over time. So one of the things you mentioned was your management style — how do you motivate, how you get feedback. How has that changed over time? What are the ways in which your management style today is different than it was, let's say, in Bergen County?
Gurbir Grewal: I think I've just become more patient. I've learned to listen more, and I've become just more intentional in my communications with folks who work with me, letting them know what my expectations are more clearly, letting folks know in the right way when they fall short in meeting those expectations. The challenge in government and leadership in government in particular is that we have very few carrots and we have very few sticks. You don't have the ability to move on folks as you would in private practice. There are a lot of civil service protections. There are a lot of employment protections at the federal level, and you don't have the ability to give the types of bonuses and money to incentivize work as you would in the private sector. The one thing you can do is tell folks in clear terms how you appreciate their work, message out constantly about our successes, celebrate the great work that's being done. The other way you deal with folks is to really be plain about your expectations, try to find the right fit for folks if they're not hitting it out of the park in this role, trying to find a role in which they can hit it out of the park, and to work with them to find that, where they can succeed. That's something you have to learn in government. I learned that all along the way where you just — you've got to really just be patient, and it's frustrating at times. So I think overall I've learned to become more intentional and patient over the years.
Khurram Naik: So tell me some more — you also mentioned learning to deal with the media, and you learning that there are considerations you have to make for when and what you'll present, what information. So how have you become more sophisticated with leveraging media and understanding how government should use media?
Gurbir Grewal: Yeah, I mean, I think — again, I'll talk about my current experience. There's this perception, and it's borne out in study after study, that we're not holding bad actors accountable. That large corporate actors are getting away with violating the securities laws or violating laws writ large and not being held accountable. That's created a great deal of distrust, and folks have begun to think that there are two sets of rules, one for the big and powerful and one for everybody else. And that leads to a decline in investor confidence. And again, there are surveys that speak to this. The problem is we're not communicating out effectively when we are holding folks accountable. We're not leveraging the communication channels that people use to gather their news from. We have just now begun to leverage social media as a means of communicating our enforcement actions. And we're beginning to do it more effectively. But for us to issue a press release that we've, you know, fined so-and-so corporate wrongdoer X millions of dollars and they've agreed to these remedies that we've imposed in a particular case, or that we're litigating against a big corporate actor or holding this particular CFO or CEO accountable in a litigation release, which only law firms are going to read — that's not getting our message out there. So I think in this particular role, our chairman, our office of public affairs has been more effective in leveraging those communication channels that get the message out there that we are the cop on the beat, that we are making sure that people play within the chalk lines, that they're not flouting our rules and they're not getting away with things. So I think that's one real example in this particular role. In the prior role, you know, we just dealt with so much. As AG, you're dealing with law enforcement issues, you're dealing with civil issues, you're representing the state in civil matters. I ran a division on civil rights. I'm dealing with, of all things, gaming. I had supervisory authority over the casinos. I'm dealing with the racing commission, the horse tracks. I'm dealing with the alcoholic beverage commission, the ABC. And so, you know, there were so many different divisions, all of which were doing great work, but the messaging wasn't getting out there. So we started very early on in 2018 trying to use social media, trying to be more thoughtful on how we were getting our message out. And the other thing we did was, when we were giving a press conference, you know, you learn how to communicate in soundbites, which is a different way of talking, because I don't think people who are covering a press conference want to hear chapter and verse of everything that happened. They just want that 15-second clip that they could put on the evening news. And so that was different, right? So you're starting to now have folks write for you in a way that that soundbite is there. You pause at the right point. That was something new to me. So early on as a county prosecutor, I would go out there and say, hey, you know, folks, we're here investigating a homicide at 224 Main Street in, you know, any town, Bergen County. Right now this is what we have. We have, you know, a victim, age so-and-so. Like I would do everything. And I very quickly realized that at the AG's office, I don't want to be the person giving the details. I just need to be the person giving the big picture, the thematic sort of presentation, saying, listen, you know, the detectives are going to come here and brief you on what exactly transpired. I'm here to assure you that there's no ongoing threat to public safety here in the county right now, that the suspects have been apprehended. There are no additional victims. It's a tragedy, but we're here to support this particular community. And then the story handed off to the next person — and that's hard when you're a public person, that you want to be the person at the mic the entire time. But you're just there to give the big-picture story, and that's something I had to learn over the course of three and a half years. And if you look at my press conferences, probably at the beginning of my tenure as AG, they're probably longer and my remarks were longer, but I would, you know, at the end, it was really just sort of giving the big picture, letting other people fill in the details. And then answer the specific questions that reporters may have.
Khurram Naik: So something that I think would be interesting to pick up on — you know, I'm really fascinated with connecting your specific experiences and layers. I think another dimension that would be interesting to pick up on is ways in which you've emphasized a lot of very hyper-local work that you've done. You've talked about showing up at these schools, talking about the opioid epidemic. You've talked about going for runs with cadets and, you know, just having boots on the ground, understanding what's happening in your jurisdiction. And I imagine that's more challenging now at the SEC. So what are some of the ways in which you were able, or want, to change how that office operates in terms of having more access to tangible problems, if I'm paraphrasing?
Gurbir Grewal: That's a good question. I think all of that's made more complicated by the pandemic, where we don't have as many touch points with communities that we serve, where we're not doing that same type of outreach that we might have done pre-pandemic. So it's a challenge, but there's also a lot of opportunities, because we can be in more places more quickly by appearing virtually. So one of the things that we're doing is we're doing a lot of speaking engagements at different law schools in particular to help in our recruiting efforts. We are hiring like crazy, but we also want to make sure we're hiring in the right way. And this is one thing where I didn't close the loop on what we were talking about earlier. One of the things that I also picked up in my different experiences is the importance of having a diverse workforce and how hard it is to work to creating that. And so all along the way, whether it was at the County Prosecutor's Office, I wanted to work to address DE&I issues, because, you know, when you don't see representation in the top ranks of law enforcement — I'm not talking South Asian representation. I'm just talking representation, period, of your communities. That breeds mistrust, because if you're a community member and you don't feel as if you can connect to your cops, or, you know, they're not going to understand where you're coming from because they haven't lived your experience, or they don't look like you — that's a barrier. And that's a reason why affinity frauds persist. It's a reason why, you know, during the Trump crackdown on immigration, why someone who didn't have status might be afraid to come in and report an abuser who's taking advantage of her or him. And so, you know, the goal of promoting diversity in law enforcement is to make sure you're having a better understanding of the communities you serve by reflecting them. And so early on, I did a lot of engagement with diverse groups at different criminal justice schools, whether it's John Jay or other places, where I can go out and talk about what a great career this is. And do the hard work it takes to build diversity on the front end so you could build it later in your leadership ranks. And the same thing with your prosecutors. So then when I went to the AG's office, I had a chief diversity officer in my front office, because I thought it was that important to get this messaging out there, that not only are we talking the talk, we're walking the walk. And I would not turn down speaking engagements to law schools, to students, to affinity bar associations, because I wanted to get the word out there that this is a great place to work, that this is a place where you could thrive. And so I've continued that here. And so your question was, you know, how are we connecting at that local level or connecting in the same way that I was able to connect in prior roles? We're going to law schools. I'm speaking — my own, on the monitor — to a small group, and it's sponsored by a group of law students who are first-generation Americans who ended up going to law school. They have a group at the campus and they invited us to come speak. It's by going and working with Howard Law School to set up a class there, a securities seminar, to talk about the careers available to folks at the SEC, to be at the law school and present and teach and do the hard work at that local level and connecting at that local level. It's by doing events like we did in San Francisco, where we met by going to a bar association event, even for a night or a day and a half, and speaking and meeting folks and making yourself available, and making yourself available for active mentorship. You know, I connected with so many folks at that conference. I joked about the LinkedIn requests, but I'm happy to get on the phone with folks that I met to give them this advice one-on-one, because that I think is my obligation. And so that's the way in which I'm doing that and staying connected with folks and trying to make that difference.
Khurram Naik: Yeah, I think it would be interesting to pick up later on changes that you think the legal community can make and bar associations can make, because I think an interesting jumping-off point is — so I reviewed your testimony recently before Congress on the SEC. And I think there's an interesting transition to this topic, which is, it seems like a new priority for the SEC is a focus on gatekeepers, including lawyers. And so what are the ways in which you feel like lawyers and their culture can and should change?
Gurbir Grewal: Yeah, I don't think it's a new priority for us. I think, you know, we really — if we're going to create a culture of compliance at firms, at broker dealers, at, you know, any market intermediary — excuse me — if we're going to create a culture of compliance at firms in the securities industry, we need those gatekeepers to be doing their jobs. We can't be everywhere, right? We only have 1,400 people in the division of enforcement, and there are hundreds of thousands of registered entities throughout this country. And so we can't be the cop on the beat at every broker dealer, at every investment advisor, at every issuer. And so the lawyers who are fulfilling those roles as chief compliance officers, the lawyers who are fulfilling those roles in giving advice to their clients as to what's permitted and what's not permitted — they have to live up to their legal obligations and give the right advice. They need to speak up when they see wrongdoing. Incorporations and firms need to invest in robust compliance programs. And so when gatekeepers fall short, that sends a terrible message to the public. When we talk about trust, when you see lawyers engaged in misconduct, I can think of few things that send a more harmful message out there about how the system is rigged than when you have lawyers cutting corners and encouraging or facilitating misconduct. And so that's why we're focusing there and using whatever injunctive remedies we have to hold lawyers accountable and other gatekeepers accountable. And I think it's going to continue to be an important message because, unfortunately, we continue to see lawyers, accountants, other gatekeepers fall short of their obligations.
Khurram Naik: And let's tie this back to what you were just talking about. You were just talking about the importance of being available to people. So not just at the conference where there's a group of people, or even a small group of law students, but even one-on-one conversations. So you're doing things that don't scale at all. And those are things that you believe have an influence and impact. And I feel like that's a recurring theme, because you talked about going to these schools and saying, hey, maybe there's a low chance of influencing someone. It did influence someone. Maybe there was only the one person influenced, that one kid. But it seems like to you that was worth it. All that effort, however many hours that was, made it worth it to you, which I can understand. But so tell me some more about how mentorship and that sort of guidance will mitigate some of the problems we're having now. Will it or won't it? I mean, is there a connection between these two causes, where you believe this is an important track, and then here's the deficiency you're seeing in the bar?
Gurbir Grewal: Oh, I see. I mean, I'm not sure that's the most efficient way to go about promoting better behavior among lawyers. I gave a speech in California to a securities bar conference. It was sort of loosely titled "Lawyers Behaving Badly, Part Two," because Part One is a speech that my predecessor, Rob Khuzami, had given. The Part Two was necessary because we continue to see gamesmanship by lawyers, which frustrates the SEC process. And so speaking to a bar group like that and getting the message out there about how, listen, this trust building that we're engaged in — all of us have a stake in it. Because when the markets work better, they work better for you. They work better for me. They work better for investors. People have more trust. And so when you're playing games with privileged assertions, when you're playing games when you're taking testimony and you're kicking witnesses under the table when you don't like the answer they're starting to give, when you're engaged in misconduct or facilitating misconduct at a firm — that's not helping. That's not helping. We all have a role to play in this. And so, you know, that's the way in which we're getting the message out, and I'm getting the message out there effectively. What I would tell people, though, you know, when I talk about active mentorship — I'll talk to anybody who reaches out to me to seek career guidance. And one of the first things I tell them is, you only have one opportunity, particularly as new law students or new lawyers, to develop your reputation. Because you walk into your law firm, you're pretty much a blank canvas. But when you walk into that law firm, you have one opportunity to really start developing your reputation in the right way. And so develop that reputation early as someone who's a good team player, someone who doesn't cut corners, someone who puts in the work. And if you do that, that's going to stay with you. But if you develop a reputation early as someone who doesn't help out a colleague, someone who cuts corners, someone who's not trustworthy, that follows you and starts to follow you pretty much forever. As big of a legal community as we are, it's not that big. Because if somebody's applying for a job, somebody's going to know somebody at the law firm you're coming from or at your law school, and you're going to make a call and you're going to say, hey, what's she like or what's he like? And you want the first couple of words to be like, a great colleague, a total team player, you know, does the work, great legal skills. You don't want it to be like, you know, I can't say anything, like, I don't have anything good to say. And so that's what I mean. That's the type of advice I would give somebody. And I think because I sort of followed that playbook, I think that's a big reason why, when somebody picked up the phone at the governor's office and called the US attorney's office and said, hey, you know, what's Gurbir like? — the reaction, I think, based on what's happened to date, was positive, because I've always valued that. I've always valued my reputation. I've always valued integrity. I've always tried to be a great team player. I've always tried to go out of my way for my colleagues. I've tried to take pride in my work. And so I think if you hew to those sort of principles, which are basic — but you don't know how quickly they get lost by a lot of people who get pulled in a hundred different directions and cut corners — that's going to address all these other sort of deficiencies we see when lawyers go off the tracks. And it's going to help people succeed, I think, no matter what path they take.
Khurram Naik: Well, let me challenge you on that, because is it really the difference between whether someone got sat down and got that speech of, hey, your reputation is the most important thing and you don't know whom — you don't want to cut corners? I mean, is that enough? Because it can't be the case that the only people who are doing the kind of work that you're talking about, who are being aggressive with their privilege assertions, who are shaping witness testimony — it can't be the case that those are all the people who cut corners as such. I mean, any number of these people are probably great team players. That's how they got in the position of where they are today. So are the problems something more systemic, and not just based on individual character?
Gurbir Grewal: I'm not saying that this is the way you address every lawyer behaving badly. I'm just saying that this is one way in which I think you're on a better path than most. And this is sort of the strategy that's worked for me. And I think this is what I look for when I'm hiring folks at a high level — I'll make those calls. And I think there's value to just hewing to these simple principles. I'm not naive enough to think that it's going to solve all the world's ills. And I'm not naive enough to think it's going to force lawyers to behave better. I think there's this tension in the legal community that you're a good litigator only if you're a scorched-earth litigator, if you're fighting tooth and nail for your clients. And there are some clients who want that. And so they create this void that's filled by these lawyers who are all trying to say, I'm going to be your fighter. I'm going to be the one that goes to the mat for you. But I will tell you that those lawyers are not the ones who are most successful, in my experience, with regulators like me. It's the ones who are most measured, the ones who have a lot of credibility, the ones who — because it's a small bar, right? There are those folks who we deal with a lot, and we know their reputations. We know the ones we could trust. We know the ones where we've got to take sort of extra care with representations they're making on behalf of their clients. And there are the ones that we don't trust at all, right? And that's how real that is. And so, you know, again, I don't think it's going to solve everything, but I think it's going to help you fall into that category of being that more effective lawyer with more credibility.
Khurram Naik: Are those effective lawyers with more credibility part of firms that are involved more in the revolving door? Is that a benefit of the revolving door?
Gurbir Grewal: No, I wouldn't say so. I don't think that's — I mean, I don't know, I haven't really sort of studied the benefits of the revolving door other than knowing what our processes are, knowing how to most effectively navigate the SEC process. There's certainly a benefit, if you come from the SEC and go to private practice, because you understand this place. I will tell you, I worked with the SEC for probably a decade and a half as a federal prosecutor — or 12 years as a federal prosecutor. And I only knew a narrow piece of the SEC. I knew the anti-fraud violations. I knew the enforcement division. And when I got here, it is such a broad remit. The policy divisions do such incredible work, the rulemaking divisions. And so, you know, you don't know how the SEC process works until you work here. So there's an advantage to folks who leave here and know how to navigate the SEC. And I think they'll probably tell you that you're more effective if you really guard your credibility, because a lot of times that's all you have when you're having a tough negotiation. And, you know, along the way, like, I've heard great speeches. I've heard from a lot of leaders. One that sticks with me, which speaks to this point, is Jim Comey, when he was deputy attorney general and came to the US attorney's office in Brooklyn. I was probably a year or two there as a federal prosecutor. And he came there because morale was at an all-time low in the Justice Department. There were all types of scandals taking place. And, you know, the US attorney firings, I think, were happening or had happened. And he came there and he said, to all of us assembled — and I remember it vividly, we were assembled in the ceremonial courtroom, this is probably like 2007 — and he comes in and he says, listen, each of you were given an incredible gift when you became a federal prosecutor, when you took that oath. And you might not realize that you received that gift. And you might not realize it till the first time you tell somebody what it is that you do. And it might be at a party and you say, you know, I'm a federal prosecutor. And you might not notice, but those people will begin to listen to your words a little bit more carefully. And you may not realize you received this gift till the first time you go to a court and you're arguing a tough motion. And the judge could go either way, but goes with you, because you have this gift. And you may not realize this gift till the first time you go to a victim who is hesitant to speak to you, but learns who it is you are and who you work for, and opens up to you and tells you about what they've undergone or experienced. That gift that you don't realize you carry with you is a reservoir of trust and credibility. It's with you when you take that oath, and it's with you throughout everything you do in this job. And that reservoir of trust and credibility is a reservoir that's been filled by all the good deeds of the people who came before you, who did this job the right way, didn't cut corners, and added to that reservoir and left it more full for the next person than they themselves found it. But Comey said, the thing about reservoirs is that while it takes generations to fill them, they could be drained in an instant. So your job as the recipient of this great gift is to guard that reservoir and leave it more full for the next person than you found it.
Khurram Naik: Do you have something else you want to add on that?
Gurbir Grewal: No, but I think that's it for me. Like, does that solve all these problems that we're seeing in the legal profession? No. But does it underscore the value of credibility in this profession, because it is a small world? Certainly. Does it underscore the need to do the job the right way? In my mind, it does.
Khurram Naik: I think that perfectly captures how I think people should be practicing. So with this reservoir metaphor, I think it would be interesting to jump to another point of your testimony. And so one of the things that you spelled out is, you know, trust — Americans' trust in financial markets and institutions is at near historic lows. And you said, while there's no single cause, this decline — repeated lapses by big businesses, large businesses, gatekeepers, and other market participants, coupled with the perception that we, the regulators, are failing to hold them appropriately accountable — have contributed to this decline. So on the subject of the reservoir, what are things you think that your predecessors did that drained that reservoir?
Gurbir Grewal: I don't think my predecessors drained that reservoir. And I don't think that's what I was implying in any of those statements. I think my predecessors have all done this job with integrity and have done it incredibly well. I think there's a perception out there that we're failing to hold folks accountable. People say, why aren't you holding individuals accountable, right, when they engage in misconduct, and you're only penalizing corporations? That may be true on the criminal side at the Department of Justice. But when you dig deep, my predecessors — 70% of the resolutions we've brought over the last five years have involved individual accountability. That message is not getting out there. And that ties back to what we were talking about earlier, that there are these perceptions out there. There are repeated lapses by gatekeepers. That's why we need to send a strong deterrent message. And so that's a priority for me. I'm not saying my predecessors didn't hold gatekeepers accountable. But I know in this particular moment, I need to emphasize holding gatekeepers accountable. So when I had a matter involving Ernst & Young recently — big four audit firm — what I chose to do in that case was make sure that there were admissions in that case. Usually most of our resolutions are neither admit nor deny. But in that particular case, because of a heightened need for public accountability, because they were a gatekeeper, I wanted admissions, and our team negotiated admissions. I wanted a significant penalty. So we had a 100-plus, 125 million dollar penalty, I believe it was, in that particular case. I wanted to include in that remedy undertakings where they were going to put in place compliance consultants — and not only just compliance consultants to make sure they had adequate policies and procedures, but that they were also going to put in a separate consultant to review the misconduct in that case. In that case, the misconduct was auditors cheating on professional, you know, continuing professional education exams, including ethics exams. It was CPAs who were studying to be CPAs cheating on the ethics exams to become a CPA. And there's nothing more foundational to an auditor than to have good ethics. And so that's an example of how, in fashioning a remedy, I'm trying to address what I'm seeing out there, which is this deterioration of trust. That's not to say that my predecessors didn't do that. They brought these cases. They brought great cases. But they may have chosen to view penalties in a different way, or not pursued certain remedies, and they were dealing with a different moment. I'm dealing with this particular moment, and given the circumstances that I'm seeing right now, I think we need to pursue robust penalties and we need to pursue robust remedies, and we need to create a culture of proactive compliance, because, yeah, that trust gap and deterioration is real in my mind.
Khurram Naik: So those are solutions for the problem. So you have a theory that an admission is a solution for public trust. What gives you the impression that an admission has — like, if I asked someone on the street, hey, does it matter to you, do you have more faith in public markets because Ernst & Young admitted this wrongdoing? How do you know what the answer is going to be?
Gurbir Grewal: Well, I think the people, you know — well, I'll flip it on you, because the criticism I'm getting, and that we get as regulators, is, why do you resolve everything with the neither-admit-nor-deny? How are you holding people accountable? What's that all about? You know, they're saying that they violated the securities laws, but in the resolution they're neither admitting nor denying the violation. They're not saying anything. They're paying you a big penalty and maybe there's some other remedies attached to that. But how is that promoting accountability? So that's out there. And so the flip side of that — I don't think there's anything that is more attention-grabbing and can address people's concerns that folks aren't being held accountable than exacting admissions in a particular case. And so, you know, I haven't done the studies there, but I just think, based on those two scenarios, in the right cases — because we can't do it in every case. The majority of our resolutions will still be neither admit nor deny, because otherwise we're not going to get things resolved. It's just not practical. But in the right cases where there's a heightened need for public accountability, where there's a real recidivist, let's say, or where there's a threat to the public markets, where there's something that we need to send a strong message on — in those cases we'll pursue admissions. And in those cases, we'll be willing to litigate if we don't get admissions. And so, you know, I think it's effective. And I'm sure folks have looked at it too. I don't know how you measure it. It's hard, I think, to find measures to say, did this deter misconduct altogether in a particular space, right? That's a tough question to answer. But I will tell you that it's caused market participants to change their behavior, because they don't want to be the next firm to have a resolution involving admissions. Because there are a lot of knock-on effects too when people admit to certain types of misconduct. They lose certain privileges. You know, when they're broker dealers, they lose certain waivers and registration exemptions and things like that. So people are really, you know — whether the public latches on to it, market participants know how significant it is, and they're changing behavior.
Khurram Naik: And so I think something else interesting you're saying about comparing previous regulatory eras is, it's not apples to apples, because it's just a different era that we're in. And so recognizing that — you know, when you said, okay, so now you're approaching remedies and compliance and just using these different tracks as ways to increase public trust — but it seems like public trust is the North Star, and that's what you're optimizing for now. What were your predecessors optimizing for instead? Because it sounds like, you know, say on the subject of admissions and going with neither admit nor deny, why was that — what was the relevant trade-off that made that, in the calculus, more attractive?
Gurbir Grewal: Again, I can't — I don't want to speak for my predecessors and what motivated them. I know my immediate predecessors, and the ones I know were focused on the same thing that I'm focused on. You know, our core mission is investor protection. It's ensuring the fair and efficient operation of our markets. It's ensuring and facilitating capital formation. That's the tripartite mission of the SEC. They believed in it. And they did what they thought was the right thing and the most effective thing to do to achieve that mission. I think to achieve investor protection, we also have to focus on restoring public trust and confidence in our markets. And that's something that I've keyed in on. And I think it's born out of my prior experiences, because as AG, I did have the opportunity to speak to folks around the state and to speak in town halls across the country. And the feedback I got — and I think it's still true — is that whole pockets of this country have lost confidence in their government. We know that. We've seen that. We've seen that play out in our electoral politics. And at the same time, they've lost confidence in our financial institutions, because they don't think that the markets work for them. And because of that, you know, is it any wonder why the crypto crashes hurt more minority groups and other groups? There are studies to that effect. Because these are folks who, in some cases, felt like the markets didn't work for them and saw crypto as something different and invested heavily in certain crypto products, which, you know, the bottom fell out of. And so that's something we need to be mindful of, because if there's confidence in our markets, we're better able to protect investors.
Khurram Naik: So the three-part mission — protecting investors, maintaining fair and efficient markets, and facilitating capital formation. What are ways in which those can be trade-offs or in tension with each other?
Gurbir Grewal: In tension with each other — I don't think they're trade-offs. I mean, I think, you know, we have other divisions that are focused on making sure that market structure issues are addressed, and, you know, corporation finance is addressing our registration regime, that it's operating effectively. Investment management is making sure that, you know, investment advisors and private funds and others that are operating in that particular space are regulated. So all of that — a well-regulated market, a robust disclosure regime — allows for investor protection. It allows for the fair and efficient operation of our markets, and it allows — so that's just when all that is working — for capital formation. When you don't have trust, right — just to bring it back to the trust point — are you really going to part with your retirement invested in the market, right? If you don't really think that the market works for you, are you really going to invest in a retirement account? If you're not, then that affects everybody down the line. It affects capital formation, it affects the fair and efficient operation of markets. If folks are not putting their money in the markets, that's bad for all of us. And so I think all of this works in harmony.
Khurram Naik: So one of the — and I'm mindful that our time is running short here, so I want to just get in a few more questions to explore your worldview. Because I think it sounds like you are looking to leave your mark on this organization. And so I want to explore some of the things that you're going to do, because our previous conversation touched on some of the legacies that you wanted to leave behind. So I guess, do you have a thesis at this point — what is the mark you want to leave on this institution?
Gurbir Grewal: Yeah. Like, you asked me that previously. And so again, I don't want to be — I'm not trying to be difficult here at all. Like, I don't think in those terms. I really don't. Like, I didn't come into this job thinking like, I'm going to leave a particular mark. I didn't get into the AG job thinking I was going to leave a particular mark. I didn't get into the county prosecutor job thinking I would leave a particular mark. I didn't become a federal prosecutor to leave a particular mark. But I talked to you about my motivations for entering public service. And, you know, I don't think my career strategies lend themselves well to this lens of opportunity costs and trade-offs and things like that. I've just tried to do the right thing, you know. And I think if I could continue to make that impact that I wanted to make as a federal prosecutor, as a county prosecutor — I made that decision. I know there were consequences to my family as a result of it. When I had the opportunity to become AG, I could do those same things that I was trying to do first as a federal prosecutor, then as a county prosecutor, as an AG. And along the way, the mark I wanted to leave was just to make sure that I did it the best I could, right, that I was just doing the work, that I was making it better for the residents of my county as a county prosecutor, that I was making it better for the residents of my state, that I was pushing back on things that I thought were unjust, that I was addressing things that were important to me, issues that were important to me. And one of the things we haven't talked about is the rise in bias offenses and crimes that we saw over the last number of years in New Jersey. I know how that type of intimidation affects whole communities, right? We lived it. I don't know how old you are, but in Jersey, when we had the Dotbusters, you had people in Hudson County afraid to go to their mandirs and afraid to leave their homes, because you had a whole group of folks terrorizing the Asian American community, the Indian American community in Jersey City. So when things started to percolate again, and, you know, more recently the rise in anti-Asian hate, I was in a position to do something about it, because I knew how deep those wounds cut. And so that's why I do this job. It's not like intentional in the way that, you know, I want to leave this mark here or leave that mark there. I think that the way in which I leave a mark is just to say I came in here, I focused on these things that were important to me, and I empowered the people who worked here, I had their backs and I supported their work, and we protected investors as best we could and we tried to restore confidence in our markets. I firmly believe that that's the case. Like, I don't need to look at studies. I just think, whether it's real, whether it's borne out in granular scientific data — there's this perception out there. And so we need to continue doing our work, and we need to do it in a way that lets folks, that lets people know that we are placing an emphasis on accountability, and we're not letting people price in penalties as the cost of doing business, that we're taking bad actors and repeat violators out of the profession, that we're being super thoughtful in the way we're crafting remedies, whether it requires admissions in a particular case or maybe not in that particular case. I'm just too focused on the now to think about legacy, right? So, you know, people are going to say what they want to say. Some people love the stuff I did in Jersey. Other people hated it. I didn't do it because a particular group loved it, and I didn't do it to attack a different group. I did it because I thought it was the right thing in that particular moment. And I made a lot of hard choices. But really, when I was AG, I thought — we were then talking about policing issues — we were in a particular moment where I thought we were going to finally fix a lot of these structural issues, and that moment's gone, and unfortunately the momentum's not there anymore to make those choices. And I'm happy about the legacy we left and the policies we put in place. I'm disappointed that more hasn't been done since, but I wasn't doing that because of concern over legacy. I was doing that because, in the wake of the killing of George Floyd and in the wake of the Black Lives Matter protests, I wanted New Jersey to be a model of how we could get it right, how we could actually promote transparency and professionalism and accountability in law enforcement and bring communities together. And that's why Jersey didn't have that same experience other parts of the country did, where we had hundreds of protests, but we didn't have the same types of violence that we saw in other parts of the country, because we were doing that hard work — not because we wanted to leave that legacy, but because we thought that was the right thing to do in that particular moment. And so, you know, that's why we did it.
Khurram Naik: Yeah, it's interesting. I mean, I think there's probably some distinction between the word legacy that we're using, because when I hear the things you're talking about, I hear about a lasting impact. And I think maybe you're hearing me saying, oh, like, what's the perspective change I want to create here? But I guess, I mean, another way of saying it is, you know, your predecessors that are coming into your roles in Bergen County — I mean, if you heard they just undid everything you did, it can't be the case you would say, oh, that's totally fine, you're doing whatever's best. It can't be the case that anything you did had no enduring value.
Gurbir Grewal: I think we're just talking around each other. I think what I hear your question to ask is like, you know, when I hear "legacy," it's like, you know, it's about me, right?
Khurram Naik: Yeah, I'm not — yeah.
Gurbir Grewal: So I'm like, none of this is about me. And so, as a county prosecutor, I wanted to use all the levers that were available to me to make the lives of our residents better, to address all those issues that we've talked about, as effectively as I could. Of course, I'd be upset if people unwound those policies, right? I was hopeful that a lot of the policies we implemented at the AG's office would be codified in law, but there hasn't been that will. And again, we've lost that moment, I think, to implement that type of lasting change. But I'm happy that I have those directives that are still in place there. Yeah, I'd be terribly upset, because we put in a lot of hard work. We're the only state that changed our use-of-force policy to make it more about respecting the sanctity of life than about talking about how and when we could use force. It was a real sea change, and cops bought into it, and we retrained cops — we retrained 37,000 cops right before I left. The last thing I did was attend those trainings, in my last week as AG, because that's the legacy I wanted, I guess, if I'm going to borrow your word. I wanted to change the way we did things for the better. And that's the same thing here, right? There's so much we could do more effectively. We could make the lives of our staff better. We could give them more tools. We could push more authority back to them so they could work more efficiently. We could message out more effectively that we're holding people accountable. But I don't view that as anything that I'm doing for me. I'm more doing all I can in this time that I have here to address those issues that I care about.
Khurram Naik: Yeah, I think we're talking the same thing now. Okay. So you and I talked about a shared enjoyment of a really great writer on finance, and that's Matt Levine. And, you know, when I mentioned Matt Levine, you said, oh, "Elon," which was just like the catchphrase that told me, okay, you know the deep cuts. So what do you think is — I feel like Matt Levine always has really interesting frameworks for thinking about markets, market participants. What do you think is the most interesting or funny framework that just struck you and is something that you've thought about since you read it from him?
Gurbir Grewal: You know, I don't know if I know another reporter in this space who's able to just sort of break down complex financial instruments, to break down crypto and crypto lending and break down all these — what are really, in some cases, difficult issues to understand, in a way that anyone can understand it. And like, that's such a skill. And how prolific he is, and how quick — you know, we could issue news this morning, and by his afternoon when the newsletter hits, he'll already have an analysis and have relatable real-world examples, and, you know, related to his own experiences. He's a really talented lawyer and a really talented reporter, I think, in my mind. He's able to sort of dive deep into what we're doing and explain it in such a clear way and get it right most of the time. Yeah, that's Matt Levine. I can't — I'm not going to talk about a specific storyline or a specific article that resonates, because he's largely writing about what we're doing.
Khurram Naik: I mean, there's always interesting — there's, like, say, the bored markets hypothesis or the Elon markets hypothesis. I mean, do any of those influence your worldview or resonate with you in any way?
Gurbir Grewal: I'll just say that I read a lot, and, you know, I'm not going to sort of highlight a specific theme that's resonated or informed my enforcement philosophy.
Khurram Naik: Okay, very good. I thought I had you there. But yeah, okay, this is really great. I'm glad we took the time to talk. This is an interesting tour of your worldview and your experience, and, yeah, I really appreciate you taking the time to sit down here.
Gurbir Grewal: It's my pleasure. And, you know, I don't know, maybe when I sit down and look back at it, there's probably more structure to what I've done, or something that I haven't thought about. But I really do mean it that — it's, I was literally sitting in Disney World when I got the call for the AG opportunity. I was on vacation with my family and I was at The Little Mermaid with my then four-year-old when somebody called me and asked me about my interest in the AG position. I started the interview process. I was at the AG's office. It was on May 20th of last year — it's my anniversary. I get a text from somebody who wants to talk about this current opportunity. I wasn't soliciting it. You know, plenty of people have tried to audition for these roles. It's a great — I think it's the best job for white collar government lawyers. Like, it's the best position. A nationwide reach. You have such ability to do good here in a very complicated and challenging space, and really set priorities. Again, I wasn't looking for it. I got that email out of the blue. And you and I have talked about this before, and maybe this is something that's worked for me, but I do think there's something to be said about just doing the work, about just putting your head down and doing the work, because I think people notice. People notice at the law firm, people notice at the US attorney's office, people notice in government, people notice wherever you are. The work speaks more than you could speak by trying to sort of hustle for a role and angle for an opportunity. Now, not that there's anything wrong with that, but I just think sometimes that becomes more — you know, it's just, it's obvious to me, the people around me in these different roles who are just looking to get a leg up and cut a corner, to use that expression I used earlier. But it's different, because I also notice the people who do the work and do the work for the right reasons. And I think that means more to me than a lot of things when I'm sort of assessing talent.
Khurram Naik: Great. Fun, all worth it. All right, man.
Gurbir Grewal: Now I've got to go by a lot.