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Deutsche Bank’s Board Can't Seem To Grasp Corporate Governance · Bloomberg Intelligence

• 0:05
  Speaker 1: Welcome to the Bloomberg pm L Podcast. I'm Pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Bramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
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• 0:17
  Speaker 1: or the trading floor. Find the Bloomberg p m L
• 0:20
  Speaker 1: Podcast on Apple Podcasts, SoundCloud and Bloomberg dot com. Deutsche
• 0:28
  Speaker 1: Bank has been having a terrible year and it has
• 0:31
  Speaker 1: just gotten or. Joining us to discuss is Leonel Ronky
• 0:35
  Speaker 1: is a Bloomberg opinion columnist. Let's talk about what happened
• 0:38
  Speaker 1: officials rated Deutsche Bank offices. What were they looking for?
• 0:43
  Speaker 1: Why now? And how much lower can these shairs go? Um? Well,
• 0:49
  Speaker 1: I mean they can always go a lot lower, as
• 0:51
  Speaker 1: we've seen over the past a few years in terms
• 0:54
  Speaker 1: of what they were looking forward. Why now? I mean, look,
• 0:57
  Speaker 1: there's a lot we don't know. But the fact is this,
• 0:59
  Speaker 1: this seems to be linked to the Panama Papers scandal,
• 1:04
  Speaker 1: the leaks a couple of years ago, a huge whate
• 1:07
  Speaker 1: of documents detailing offshore accounts and assets you know, squirreled away, uh,
• 1:15
  Speaker 1: and it seems to have caught up with Deutsche Bank
• 1:18
  Speaker 1: and a couple of unnamed employees who seems to be
• 1:21
  Speaker 1: part of the part of the probe. So I guess
• 1:24
  Speaker 1: one more, one more thing to worry about on a
• 1:26
  Speaker 1: long list of things to worry about, Leonel, the shares
• 1:29
  Speaker 1: of Deutsche Bank. They are lower by more than five percent.
• 1:31
  Speaker 1: They've lost more than fifty percent of their value this year,
• 1:34
  Speaker 1: and just earlier today, as Lisa was referencing, six different
• 1:39
  Speaker 1: Deutsche Bank properties were searched by police. Police vehicles lined
• 1:45
  Speaker 1: up outside of Deutsche Bank's central Frankfort headquarters and according
• 1:50
  Speaker 1: to a person who's familiar with the matter, one of
• 1:53
  Speaker 1: the two people being probe by Frankfort prosecutors and the
• 1:56
  Speaker 1: money laundering investigations works in the bank's anti financial crime section. Yeah,
• 2:07
  Speaker 1: and look, bigger picture is right, money laundering, as we've
• 2:11
  Speaker 1: seen at the Danska bank scandal. This, you know, money
• 2:14
  Speaker 1: laundering is not something that's restricted to one bank or
• 2:17
  Speaker 1: unique to one bank, and sadly, even banks that say
• 2:21
  Speaker 1: they have the right controls often failed at the hurdle.
• 2:24
  Speaker 1: I just think the bigger picture goes beyond the sort
• 2:28
  Speaker 1: of the shot can or of this investigation. You know,
• 2:30
  Speaker 1: Deutsche Bank is a bank that has had a lot
• 2:34
  Speaker 1: of problems to do with its compliance and its controls
• 2:37
  Speaker 1: even before this. It's the reason why it failed the
• 2:39
  Speaker 1: US stress test. It's it's the reason why I had
• 2:41
  Speaker 1: a bunch of fines. It's part of the reason why
• 2:43
  Speaker 1: it's lost money for three years in a row. I
• 2:45
  Speaker 1: think even if you, even if you didn't know about
• 2:47
  Speaker 1: today's probe, you would really have reason to worry about
• 2:49
  Speaker 1: the simple operational control at this institution. It's a it's
• 2:55
  Speaker 1: a serious concern. Who is to blame for the institutional
• 2:59
  Speaker 1: laps that seemed to be coming up again and again
• 3:01
  Speaker 1: here at George Bank. So I think that's not wishing
• 3:05
  Speaker 1: to point the finger anyone in particular, but you really
• 3:08
  Speaker 1: have to question the board's the board's behavior, that the
• 3:12
  Speaker 1: board's way of acting over the past couple of years.
• 3:15
  Speaker 1: We had the previous CEO, John cry and do it
• 3:18
  Speaker 1: do a pretty good job of at least trying to
• 3:20
  Speaker 1: get the bank to survive in the face of fines
• 3:23
  Speaker 1: and just trying to adapt to the post crisis world.
• 3:26
  Speaker 1: And he did, he did, He did actually succeed in
• 3:28
  Speaker 1: raising capital at the bank, and he was pushed out
• 3:31
  Speaker 1: in a very messy, very hasty way, earlier this year
• 3:35
  Speaker 1: and the new CEO seems to not be getting a
• 3:36
  Speaker 1: handle on things at all, and there's now talk of
• 3:39
  Speaker 1: a whole new round of executives being pushed out. And
• 3:43
  Speaker 1: I think at some point, if if this keeps getting worse,
• 3:45
  Speaker 1: people are going to have to look at the board
• 3:46
  Speaker 1: and think what's happening? Why is the chairman still here?
• 3:50
  Speaker 1: Why is the board the way it is? This clearly
• 3:52
  Speaker 1: has got to stop. But the accountability goes way beyond
• 3:55
  Speaker 1: the CEO and the current management. You know, does this
• 3:58
  Speaker 1: create operation of paralysis at an institution such as Deutsche Bank?
• 4:04
  Speaker 1: I think it's worse than paralysis. It's it just seems
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  Speaker 1: like it's completely disorderly. If you think about it, wouldn't
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  Speaker 1: it be worth a bit of paralysis just to control things?
• 4:14
  Speaker 1: If if this is a control failure, wouldn't it be
• 4:16
  Speaker 1: worth spending all You've got to at least throw a
• 4:19
  Speaker 1: line under all this? Think of all of the trading
• 4:21
  Speaker 1: mishaps that every year there's a risk management blow up.
• 4:24
  Speaker 1: They try and protect against risk but also make money
• 4:27
  Speaker 1: and it doesn't work, you know though, I mean to
• 4:30
  Speaker 1: be fair, right, all banks are involved in different mixes
• 4:34
  Speaker 1: of businesses and some are more risk prone than others, right,
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  Speaker 1: I mean, just let's get that out there. I mean,
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  Speaker 1: if you're dealing with for private wealth, for example, you
• 4:42
  Speaker 1: have to be really careful not to be dealing with
• 4:44
  Speaker 1: tax evasion or money laundering or other things like that.
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  Speaker 1: Correspondence banking similar risk issues here. So is joy to
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  Speaker 1: Bank unique in some of its transgressions or is this
• 4:56
  Speaker 1: just the mix of businesses that it's got itself in
• 5:00
  Speaker 1: higher risk and perhaps they didn't amp up the risk
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  Speaker 1: management as much as they should have. Let me put
• 5:06
  Speaker 1: it this way, we we there is no secret to
• 5:08
  Speaker 1: dorture banks issues. It has a gigantic balance sheet, it
• 5:12
  Speaker 1: is primarily exposed to investment banking. But given that we
• 5:16
  Speaker 1: have been in this downward spiral since do you not
• 5:20
  Speaker 1: think that this goes beyond some kind of sectoral issue.
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  Speaker 1: Isn't it time that there was a question made about
• 5:26
  Speaker 1: who is controlling this bank and what the operational control is.
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  Speaker 1: I genuinely don't see how the current situation where you
• 5:34
  Speaker 1: have the old CEO pushed out in favor of a
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  Speaker 1: new CEO in a completely messy way, but the bard
• 5:39
  Speaker 1: remains unchanged, and the current situation where you find the
• 5:43
  Speaker 1: rate is one thing, but forget even the rate. The
• 5:45
  Speaker 1: reports coming out that the CEO is considering replacing the
• 5:47
  Speaker 1: head of regulation, the head of US banking, and the
• 5:51
  Speaker 1: head of the investment bank potentially all in one go.
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  Speaker 1: And I just think that tells you that there is
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  Speaker 1: a complete lack of under standing of how to get control,
• 6:03
  Speaker 1: how to get a grip on this. And I think
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  Speaker 1: this goes way beyond saying well, this is the business
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  Speaker 1: of banking. That's that's that's my view. Thanks very much
• 6:11
  Speaker 1: for being with us, Leonel laurent Is Bloomberg Opinion columnists.
• 6:16
  Speaker 1: He joins us from London speaking about Deutsche Bank and
• 6:20
  Speaker 1: the raid that was initiated today on their Frankfort headquarters.
• 6:25
  Speaker 1: Shares of Deutsche Bank are lower by five percent, and
• 6:28
  Speaker 1: as we mentioned, they are lower by more than fifty
• 6:31
  Speaker 1: percent so far this year. I want to bring in
• 6:37
  Speaker 1: our own legal expert here at June Grosso or legal
• 6:41
  Speaker 1: analyst and co host of Bloomberg Law, to tell us
• 6:44
  Speaker 1: more about this rather extraordinary turn of events. Tell us
• 6:49
  Speaker 1: a little bit about what the plea deal with Michael
• 6:52
  Speaker 1: Cohen would involve, and why does pleading guilty to lying
• 6:56
  Speaker 1: to the Senate Intelligence Committee in why is that a
• 7:00
  Speaker 1: big deal? It's a big deal because of the significance
• 7:04
  Speaker 1: of this to the Mueller investigation. When Michael Cohen pleaded
• 7:09
  Speaker 1: earlier this year to federal charges, that was not that
• 7:13
  Speaker 1: was at the Southern District of New York. It was
• 7:14
  Speaker 1: not related to the Mueller investigation. In fact, Mueller had
• 7:17
  Speaker 1: handed off Michael Cohen so to speak to the Southern District.
• 7:21
  Speaker 1: So everyone assumed that, oh, he has nothing to contribute
• 7:24
  Speaker 1: to the Mueller investigation. Then you remember that his attorney,
• 7:27
  Speaker 1: Lannie Davis, went on TV several times and talked to
• 7:30
  Speaker 1: different outlets and said he has a lot to give here.
• 7:33
  Speaker 1: It was almost as a plea to the Special Council.
• 7:36
  Speaker 1: Talked to Michael Cohen because we want to we want
• 7:38
  Speaker 1: to deal Michael Cohen's other plea. There was no deal involved,
• 7:43
  Speaker 1: which was sort of shocking to most lawyers. Why make
• 7:45
  Speaker 1: a plea when you don't have a deal. This is
• 7:48
  Speaker 1: now a cooperation agreement with the Special Counsel. He's pleading
• 7:52
  Speaker 1: to new charges and it's about the statements that he made.
• 7:57
  Speaker 1: And you heard President Trump referred to us refer to
• 7:59
  Speaker 1: that statement that Michael Cohen well, Michael Cohn is now
• 8:02
  Speaker 1: saying that was a lie. We didn't end negotiations for
• 8:05
  Speaker 1: the Russia tower in Moscow in January. They continued until June,
• 8:11
  Speaker 1: when he was the presumptive GOP nominee. Yeah. Well, let's
• 8:15
  Speaker 1: let's find out more about that Russia deal that President
• 8:18
  Speaker 1: Trump said everybody knew about. Let's bring in Larry Liebert,
• 8:21
  Speaker 1: who is in Washington, d C. For Bloomberg News. Larry,
• 8:24
  Speaker 1: thank you so much for being with us. Can you
• 8:26
  Speaker 1: give us a sense of what this Moscow property deal
• 8:30
  Speaker 1: was and how it's relevant to this whole ongoing discussion
• 8:34
  Speaker 1: of conspiracy or collusion. I think, first of all, there's
• 8:39
  Speaker 1: been a lot of talk that the Muller pro will
• 8:42
  Speaker 1: peter out in regard to the President. You know, he
• 8:45
  Speaker 1: doesn't really have anything direct on the President. He's about
• 8:48
  Speaker 1: to close shop, not at all to suggests. Uh. And
• 8:52
  Speaker 1: and the plea here uh indicates uh that there was
• 8:57
  Speaker 1: an effort to cover up or at least minimize this
• 9:01
  Speaker 1: talk of a Trump tower in Moscow as an issue
• 9:06
  Speaker 1: that was indeed settled in January, when in fact it
• 9:09
  Speaker 1: was June. And uh, you know, in his uh now
• 9:14
  Speaker 1: erroneous Uh deceptive testimony to Congress. Uh. Cone had made
• 9:21
  Speaker 1: a big point that we stopped talking about this way
• 9:23
  Speaker 1: before the Iowa caucuses or any of the primaries. Uh,
• 9:26
  Speaker 1: Today's saying no, the talks continued now. The President shrugged
• 9:29
  Speaker 1: it off. He said, UH that first of all, that
• 9:33
  Speaker 1: Cone is a liar, but secondly that Uh, there was
• 9:36
  Speaker 1: nothing wrong about pursuing a deal. Uh. But mother may
• 9:42
  Speaker 1: have different ideas on that. In terms of the reasons,
• 9:44
  Speaker 1: he had said, is the motives to collude with Russia
• 9:48
  Speaker 1: June Crosso. The President also during this impromptu news conference,
• 9:53
  Speaker 1: said that one of the reasons why the conversations continued
• 9:58
  Speaker 1: about the tower of the real estate project in Russia
• 10:01
  Speaker 1: is he did not know, obviously the outcome of the U.
• 10:05
  Speaker 1: S election, and that by foregoing the possibility of a
• 10:09
  Speaker 1: business deal, he would be hurting his business. It's not
• 10:13
  Speaker 1: about the deal. It's about what was said about the
• 10:16
  Speaker 1: deal and what the intent was and what went on
• 10:18
  Speaker 1: about the deal. So it's not the deal itself. That's
• 10:20
  Speaker 1: sort of a diversion. You know, he could make a deal.
• 10:23
  Speaker 1: It's a business. But in Michael the information for Cohen's plea,
• 10:27
  Speaker 1: what he says, and this really goes to the heart
• 10:29
  Speaker 1: of what you're asking. He said that he made false
• 10:31
  Speaker 1: statements to minimize the links between the Moscow project and
• 10:34
  Speaker 1: individual one that's President Trump, to give the false impression
• 10:38
  Speaker 1: that the Moscow project ended before the Iowa Caucus. That's
• 10:42
  Speaker 1: the first primary. And to limit in the hopes of
• 10:45
  Speaker 1: limiting the ongoing Russia investigation. That's the key here, the
• 10:49
  Speaker 1: hopes of limiting. And also for all the people who
• 10:52
  Speaker 1: ask about you know, people say are speculating about what
• 10:55
  Speaker 1: is President Trump's connection to Soviet President Vladimir Putin? Russian
• 11:00
  Speaker 1: President Ladimir Putin. In this information, Cohen agreed to travel
• 11:04
  Speaker 1: to Russia, and they mentioned that the conversations that were
• 11:08
  Speaker 1: had between the press secretary for President Putin, he received
• 11:13
  Speaker 1: response from the office of Russian official won the press
• 11:16
  Speaker 1: secretary for the President of Russia. So and then there
• 11:19
  Speaker 1: was an email where he said, it's about the President
• 11:22
  Speaker 1: of Russia. They called today, So behind this is all
• 11:25
  Speaker 1: the connections to Vladimir Putin. All right, Larry, can we
• 11:28
  Speaker 1: take a step back and just talk about what you
• 11:30
  Speaker 1: kind of initially said, which is any signs that Robert
• 11:34
  Speaker 1: Mueller was winding down his investigation are probably misplaced, and
• 11:38
  Speaker 1: this sort of shows that they're very deep in it.
• 11:40
  Speaker 1: So what have we learned about the stage of the
• 11:44
  Speaker 1: investigation when we'll get a final report? And you know,
• 11:48
  Speaker 1: how much does this change the calculus about whether this
• 11:52
  Speaker 1: ultimately does go back to President Trump and in some
• 11:55
  Speaker 1: way imperil his presidency, because right, I mean, that's that's
• 11:57
  Speaker 1: at the end of the day, what everybody is wondering, Well,
• 12:00
  Speaker 1: we haven't heard any firm guidance that from sources that
• 12:04
  Speaker 1: suggest that there's been a change in our early reporting
• 12:08
  Speaker 1: that Mueller was closing in on some some of his
• 12:11
  Speaker 1: major conclusions. Uh. But uh, you know, even if he
• 12:16
  Speaker 1: issues conclusions, he's set uh in the course for prosecutions,
• 12:21
  Speaker 1: for inquiries, uh, not only by his office, but but
• 12:25
  Speaker 1: by other U S attorneys that may go on for
• 12:28
  Speaker 1: a good while and and trials as well. So uh,
• 12:32
  Speaker 1: this thing isn't ending in any case. Um. And the
• 12:36
  Speaker 1: the ultimate question, uh, in part is how strongly he
• 12:42
  Speaker 1: condemns the president knows around him, Uh, even if he
• 12:45
  Speaker 1: finds this has been the general view that you can't
• 12:49
  Speaker 1: indict a sitting president. So the plot is thinking now
• 12:53
  Speaker 1: that we're past the elections and we will see a
• 12:57
  Speaker 1: lot more happening, but exactly the pace and exactly how
• 13:01
  Speaker 1: close to the president gets uh, you know, we don't
• 13:04
  Speaker 1: yet know. But this is a clue. But it's not
• 13:06
  Speaker 1: all over yet. June Grosso, you want to talk about timing,
• 13:11
  Speaker 1: I do, because the timing of this is important and
• 13:15
  Speaker 1: you might say peculiar. Remember that President Trump submitted answers
• 13:20
  Speaker 1: under oath to the Special Counsel's office, and now he's
• 13:24
  Speaker 1: locked into those answers, and now all of a sudden
• 13:27
  Speaker 1: we have the Cohen Plate, which contradicts perhaps and we
• 13:32
  Speaker 1: would say probably contradicts those answers. So the timing is
• 13:36
  Speaker 1: really unusual. Also, the Manafort deal falling apart on Monday
• 13:40
  Speaker 1: because of information the Special Counsel has. The timing is
• 13:44
  Speaker 1: really important and the thing that President Trump is locked
• 13:47
  Speaker 1: into those answers really interesting. And we will continue to
• 13:52
  Speaker 1: tap both of you for more insight as this develops.
• 13:56
  Speaker 1: June Grosso, legal analyst and co host of Bloomberg Law.
• 13:58
  Speaker 1: Larry Leebert, national security editor for Bloomer, coming to us
• 14:02
  Speaker 1: also from Washington, d C. Thank you very much for
• 14:06
  Speaker 1: being with us. Our guest is the honorable Vic Fideli.
• 14:13
  Speaker 1: He is the Finance Minister of Ontario. Ontario one of
• 14:17
  Speaker 1: thirteen provinces and territories of Canada, and it is home
• 14:21
  Speaker 1: to the largest manufacturing segment of the Canadian economy. More
• 14:25
  Speaker 1: than fifty of manufacturing happens in Ontario. Minister, thank you
• 14:29
  Speaker 1: very much for being here. Tell us currently, what are
• 14:32
  Speaker 1: the finances and the economic health of Ontario? While I
• 14:36
  Speaker 1: can say that Ontario, while we had a previous government
• 14:41
  Speaker 1: in power for fifteen years, our conservative government has now
• 14:45
  Speaker 1: been in for five months. And uh, the first thing
• 14:48
  Speaker 1: that we did was begin with efficiencies, and we found
• 14:51
  Speaker 1: three point two billion dollars worth of efficiencies in the
• 14:54
  Speaker 1: last eleven weeks and returned two point seven billion dollars
• 14:58
  Speaker 1: back to individuals, families and businesses. So Ontario is back
• 15:03
  Speaker 1: and we're open for business. I'm just wondering a lot
• 15:06
  Speaker 1: of people from the US when they think about Ontario
• 15:09
  Speaker 1: right now here, about what we've heard about the Toronto
• 15:11
  Speaker 1: housing market, how much is this on your radar and
• 15:14
  Speaker 1: play into your day to day just the incredible surgeon pricing. Well,
• 15:17
  Speaker 1: we ended up with what we'll call a soft landing.
• 15:20
  Speaker 1: Two things happened over the last year. We put a
• 15:23
  Speaker 1: foreign investment tax that the previous government put in and
• 15:27
  Speaker 1: that helped to slow down the market. And the federal
• 15:31
  Speaker 1: government changed the mortgage availability rules in January, so that
• 15:37
  Speaker 1: also so affected the market. So between the two of them,
• 15:40
  Speaker 1: it brought us in for a softer landing, so we
• 15:43
  Speaker 1: didn't see any kind of abubble at all. Uh And
• 15:46
  Speaker 1: now in our fall economic statement, we just announced that
• 15:51
  Speaker 1: we will remove rent control for new developments, so it's
• 15:55
  Speaker 1: opened up. The business community is now ready to invest
• 15:59
  Speaker 1: because they can build and know that they've got a growing,
• 16:03
  Speaker 1: a growing return. A rent control will stay for those
• 16:06
  Speaker 1: existing owners are renters. Now, as I mentioned, Ontario is
• 16:12
  Speaker 1: Canada's leading manufacturing province, accounting for more than fifty of
• 16:17
  Speaker 1: total manufacturing shipments. That means a relationship with the state
• 16:21
  Speaker 1: of Michigan. Can you tell us what trade confrontations and
• 16:26
  Speaker 1: conciliations between the United States and Canada have meant for
• 16:31
  Speaker 1: the province of Ontario. Well, I can tell you that
• 16:33
  Speaker 1: our Premier, Doug Ford has been talking to all of
• 16:38
  Speaker 1: the governors from the nineteen states where we are number
• 16:41
  Speaker 1: one trading partner, and I think it's six states where
• 16:44
  Speaker 1: we're the number two trading partner or nine other states
• 16:46
  Speaker 1: where the number two trading partner. Uh. And you'll find
• 16:49
  Speaker 1: a premier Ford. He's a business person and he's he's
• 16:53
  Speaker 1: not an idealogue. It's not about being on the right
• 16:55
  Speaker 1: or the left to him, It's all about pragmatism. If
• 16:57
  Speaker 1: it's the right thing to do, let's do it now. Manufacturing,
• 17:00
  Speaker 1: although we do account for, is really a twelve percent
• 17:05
  Speaker 1: of our economy, and Ontario fintech and financial services are nine. Agriculture,
• 17:11
  Speaker 1: while it's a smaller percentage, is still a huge employer,
• 17:15
  Speaker 1: one of the largest employers in the province as well.
• 17:17
  Speaker 1: So we have a truly a diversified economy right across
• 17:21
  Speaker 1: the province of Ontario. We we do about three billion
• 17:24
  Speaker 1: dollars worth of movies are filmed in Toronto and further north.
• 17:28
  Speaker 1: I live about four hours north of Toronto, where there's
• 17:30
  Speaker 1: two feet of snow today. Uh. And we do a
• 17:33
  Speaker 1: lot of Hallmark Christmas movies that are filmed, a tremendous
• 17:38
  Speaker 1: amount of film activity as well. I'm just wondering also
• 17:41
  Speaker 1: about cannabis legalization in in Canada. I'm just wondering whether
• 17:46
  Speaker 1: you've accounted for much higher revenues in taxes or anything
• 17:50
  Speaker 1: else from the legalization of cannabis. You know, that's an
• 17:54
  Speaker 1: excellent question. Uh. And what we decided to do uh
• 17:58
  Speaker 1: that so that this is non at tax revenue play
• 18:01
  Speaker 1: for the Province of Ontario. It's unlike the other we
• 18:04
  Speaker 1: call them at home syntax is alcohol and tobacco that
• 18:07
  Speaker 1: generally see an increase at budget in the budgets. This
• 18:10
  Speaker 1: is not going to happen. This is all about Uh.
• 18:13
  Speaker 1: This was federally regulated, so it's a law that was
• 18:16
  Speaker 1: brought in by the federal government right across Canada. We
• 18:19
  Speaker 1: opted to make our price point low so that we
• 18:23
  Speaker 1: can First of all, it's all about the safety of
• 18:25
  Speaker 1: our children, the safety on our roads, and crushing the
• 18:30
  Speaker 1: illegal market. So that's really where we are. So it's
• 18:32
  Speaker 1: not about a financial play. We're not going to make
• 18:34
  Speaker 1: money at this in the first year of the second
• 18:36
  Speaker 1: year at all. We're returning forty million dollars to the
• 18:39
  Speaker 1: municipalities to help them with with the rollout of cannabis.
• 18:45
  Speaker 1: Just real quick twenty seconds here, I'm wondering how much
• 18:48
  Speaker 1: Toronto and the interior region has benefited from the crackdown
• 18:51
  Speaker 1: on immigration in the United States. Uh. Given the fact
• 18:54
  Speaker 1: that that you've been much more open. It's quite interesting.
• 18:57
  Speaker 1: We we were at about one point eight percent of growth,
• 19:00
  Speaker 1: will probably hit about one point five percent this year.
• 19:04
  Speaker 1: So we've had a huge influx. More than two hundred
• 19:06
  Speaker 1: thousand people have come into the Province of Ontario and uh,
• 19:10
  Speaker 1: this we're we're encouraging this to happen. We we look
• 19:14
  Speaker 1: forward to it and they're absolutely Uh the employees of
• 19:18
  Speaker 1: the future. Thank you so much for being with us.
• 19:20
  Speaker 1: That is Ontario Finance Minister, the honorable Vic Fidelli, talking
• 19:26
  Speaker 1: about all things Canada as well as Ontario. Him. When
• 19:32
  Speaker 1: I was fourteen, I did some things. I was into
• 19:36
  Speaker 1: art and dance. I was not building robotic arms in
• 19:41
  Speaker 1: my bedroom. But our next guest that this, our nice
• 19:45
  Speaker 1: guest went beyond Lego sets Eastern Lasha Pale joins is
• 19:48
  Speaker 1: now he's founder of Unlimited Tomorrow, which is based in Colorado,
• 19:52
  Speaker 1: but he joins us here in our eleven three oh studios.
• 19:55
  Speaker 1: So you're twenty three and you made your first prosthetic
• 19:58
  Speaker 1: arm when you were fourteen. What inspired you to do that? Yeah,
• 20:03
  Speaker 1: So I grew up in a very small town in
• 20:05
  Speaker 1: Colorado named Mankus. Uh. There was a population about people.
• 20:08
  Speaker 1: My graduating class in high school was twenty three kids,
• 20:11
  Speaker 1: so you can imagine it's very limited resources. And that
• 20:14
  Speaker 1: really made me excited, and I started learning outside my school,
• 20:17
  Speaker 1: would run home, take things apart. I love curiosity and tinkering,
• 20:21
  Speaker 1: and I came up with an idea to make a
• 20:23
  Speaker 1: robotic hand and piece together legos. Fishing line plastic supports
• 20:27
  Speaker 1: legos to piece it all together and turn this idea
• 20:29
  Speaker 1: into reality. UM. A couple of years after that, I
• 20:32
  Speaker 1: started advancing these designs using three D printing, making four
• 20:34
  Speaker 1: robotic arms, and I met a small girl out of
• 20:37
  Speaker 1: science for that had an eighty dollar prosthetic limb that
• 20:39
  Speaker 1: I was simpler than what I was creating for a
• 20:41
  Speaker 1: couple hundred dollars out of my bedroom, and that was
• 20:43
  Speaker 1: my AHA moment. Tell us about how you met Tony Robbins,
• 20:47
  Speaker 1: who was a founding partner of your company, and how
• 20:51
  Speaker 1: did you demonstrate the ability to custom make prosthetics based
• 20:57
  Speaker 1: on three D scan technology. Well, it was it was
• 21:01
  Speaker 1: a busy year. When I was seventeen years old. I
• 21:03
  Speaker 1: was I was doing an internship at NASA. I started
• 21:06
  Speaker 1: creating these these arms and started getting national media attention.
• 21:09
  Speaker 1: I was traveling around the world doing talks and speeches
• 21:12
  Speaker 1: and I was invited to give a TED talk in
• 21:14
  Speaker 1: Denver and that was a really big milestone for me.
• 21:16
  Speaker 1: That's actually how Tony Robbins he he saw this TED talk.
• 21:19
  Speaker 1: He gave me a call one day pretty much and said,
• 21:21
  Speaker 1: I hope people around the world psychologically and I would
• 21:24
  Speaker 1: love to help them physically. Let's partner together to make
• 21:26
  Speaker 1: this a reality. And this is when I was just
• 21:28
  Speaker 1: about to graduate from high school. I was seventeen years old.
• 21:31
  Speaker 1: Right when I turned eighteen, we partnered together to form
• 21:33
  Speaker 1: Unlimited Tomorrow and since then we've been refining the technology.
• 21:36
  Speaker 1: This was almost four years ago now and UH and
• 21:38
  Speaker 1: we just recently about two years ago, we partnered with
• 21:41
  Speaker 1: Microsoft and they helped create the first procect device for
• 21:45
  Speaker 1: a small tenual grow named Momo, and that really set
• 21:48
  Speaker 1: the bar for us. So we sent scanners down to
• 21:50
  Speaker 1: her in Florida. We scanned her arm that she's missing
• 21:53
  Speaker 1: and her other arm, her full arm, and we used
• 21:55
  Speaker 1: that data to make him your image. We included fingernails,
• 21:59
  Speaker 1: custom skin to own. UH incorporated a lot of technology
• 22:02
  Speaker 1: into this and it really highlights the enabling technology, which
• 22:05
  Speaker 1: is three D printing for this technology, is it. I
• 22:08
  Speaker 1: just want to know a little bit more about Unlimited Tomorrow,
• 22:11
  Speaker 1: which can create these advanced prosthetics that even match the
• 22:15
  Speaker 1: skin tone for about of the cost of the available
• 22:20
  Speaker 1: prosthetics that are comfortable out there. Are you designing the prosthetics,
• 22:25
  Speaker 1: do you work with designers? What sort of uh, the
• 22:28
  Speaker 1: sort of function here that Unlimited Tomorrow place. Yeah, that's
• 22:31
  Speaker 1: a great question. When I first started looking into this industry,
• 22:34
  Speaker 1: there's I saw there's a lot of problems there. It's
• 22:37
  Speaker 1: kind of a scattered uh kind of market where prosthetic
• 22:39
  Speaker 1: manufactures up charges Celtic clinicians, they then sell to the amputee.
• 22:45
  Speaker 1: It's an insurance game and into the end user. It's
• 22:47
  Speaker 1: a really inefficient, expensive process that can take months on end.
• 22:50
  Speaker 1: And so we really designed this from the ground up.
• 22:52
  Speaker 1: We design every aspect from the software to custom electronics,
• 22:56
  Speaker 1: all the mechanics. You do all that in house. And
• 22:58
  Speaker 1: we've also introduced a new business model which is going
• 23:00
  Speaker 1: directly to the consumer. And so we cut out all
• 23:02
  Speaker 1: these middlemen that caused a lot of inefficiencies and cost
• 23:05
  Speaker 1: and we find that we can produce a better result,
• 23:07
  Speaker 1: that has increased functionality, It weighs less, it looks better
• 23:11
  Speaker 1: um within a matter of days versus months, and for
• 23:14
  Speaker 1: about five to ten thousand dollars versus about eighty thousand dollars.
• 23:17
  Speaker 1: And so we've really hit the bar on on a
• 23:19
  Speaker 1: lot of these problems. How are you raising money in
• 23:22
  Speaker 1: order to keep the company afloat and expand manufacturing. So
• 23:26
  Speaker 1: early on I made a I made a conscious decision
• 23:29
  Speaker 1: to really turn to the people, you know, a limited tomorrow.
• 23:31
  Speaker 1: We we affect people's lives around the world, and we
• 23:34
  Speaker 1: were people business powered by people. Uh So we turned
• 23:36
  Speaker 1: a crowdfunding and crowdfunding is a perfect application for for
• 23:39
  Speaker 1: what we're doing. It's involving cutting edge technology, very humanitarian,
• 23:43
  Speaker 1: philanthropic you know, mission behind this, and we're doing it
• 23:46
  Speaker 1: in new ways. Early this year, we went through equity crowdfunding,
• 23:49
  Speaker 1: which allows for accredited and unaccredited investors to invest in
• 23:53
  Speaker 1: the company. We ended up raising one point six million
• 23:56
  Speaker 1: dollars in about thirty days with investors, which actually broke
• 23:59
  Speaker 1: reck and and and equity crowd funding world. Uh So,
• 24:02
  Speaker 1: this is this is one step of of what we're
• 24:04
  Speaker 1: doing today. About a couple weeks ago, we launched a
• 24:07
  Speaker 1: new indieogal campaign which is more of a standard crowd
• 24:11
  Speaker 1: funding campaign that you see on Kickstarter indigo Go, and
• 24:13
  Speaker 1: the goal is to raise money to be able to
• 24:15
  Speaker 1: donate the first one hundred devices to one hundred amazing
• 24:18
  Speaker 1: amputees around the world, a lot of children and adults.
• 24:20
  Speaker 1: Where we called the campaign one hundred Tomorrows. And as
• 24:23
  Speaker 1: of right now, we have about sixty seven devices of
• 24:25
  Speaker 1: the one hundred devices already raised, so about four hundred
• 24:28
  Speaker 1: forty dollars. Uh, So we're we're we're working to meet
• 24:31
  Speaker 1: the five thousand dollar goal and really start to start
• 24:34
  Speaker 1: scaling from here. I find out really compelling when you
• 24:37
  Speaker 1: start talking about the inefficiencies built into the whole prosthetics world.
• 24:42
  Speaker 1: And I'm wondering whether during your explorations and the evolution
• 24:46
  Speaker 1: of this business, you've seen other avenues or other aspects
• 24:50
  Speaker 1: of the healthcare industry that you think some of the
• 24:52
  Speaker 1: three D printing and the technology will could be applied to. Absolutely.
• 24:56
  Speaker 1: I mean there's countless examples. Um a lot of them
• 24:58
  Speaker 1: are physical medical device aces and really comes back to
• 25:01
  Speaker 1: the philosophy of Unlimited Tomorrow. It's really augmenting the human body.
• 25:05
  Speaker 1: We want to use technology to unlock someone's full potential.
• 25:07
  Speaker 1: So this could be giving a child a procetic limb
• 25:10
  Speaker 1: that they go to school very confident they can get
• 25:13
  Speaker 1: past all these you know, physical limitations of just everyday life.
• 25:17
  Speaker 1: I could also mean that you know someone who's paralyzed,
• 25:19
  Speaker 1: and what are your options. It's either a wheel chair
• 25:22
  Speaker 1: or a couple other devices out there for rehabilitation. When
• 25:25
  Speaker 1: you look at this technology and and some of the
• 25:27
  Speaker 1: technology that we've patented and developed, and we can easily
• 25:30
  Speaker 1: accommodate for exoskeletons and other system devices. So essentially a
• 25:34
  Speaker 1: robotic para legs. And it's a very similar process and
• 25:37
  Speaker 1: industry with the with procetics that it's a very expensive,
• 25:41
  Speaker 1: you know, hundred thousand dollar device. It's out of reach
• 25:44
  Speaker 1: for you know, the people who really need to use
• 25:46
  Speaker 1: it um but it's not it's not extreme. It doesn't
• 25:49
  Speaker 1: need cost a hundred thousand dollars. We can produce it
• 25:51
  Speaker 1: for far less, and by using three D printing a
• 25:53
  Speaker 1: new manufacturing techniques, we can very can be very slim
• 25:56
  Speaker 1: and you know, be a startup and compete with this
• 25:58
  Speaker 1: large medical world. Well that competition obviously takes a lot
• 26:02
  Speaker 1: of courage, and you've shown that by building this company
• 26:05
  Speaker 1: from scratch. What are the challenges that you face to
• 26:10
  Speaker 1: get people aware that this is an up an option
• 26:14
  Speaker 1: for them rather than to go in a more traditional
• 26:17
  Speaker 1: prosthetic direction. Well, we actually haven't had any any type
• 26:20
  Speaker 1: of problem. We actually get emails probably hundreds of emails
• 26:23
  Speaker 1: a day from people around the world, um from yeah, amazing,
• 26:26
  Speaker 1: direct directly from people right right, and and it's it's
• 26:30
  Speaker 1: a known problem, especially if you are on the other
• 26:32
  Speaker 1: side of it, right you know, we you know, if
• 26:35
  Speaker 1: we're sitting here, we've all seen people that are missing limbs.
• 26:38
  Speaker 1: But you don't really know the process of what it
• 26:40
  Speaker 1: takes to you know, if you were, you know, to
• 26:42
  Speaker 1: get run over and and had an injury or or
• 26:45
  Speaker 1: has it have a disease and you have you had
• 26:48
  Speaker 1: your arm amputated, you wouldn't really a person want to
• 26:51
  Speaker 1: know the whole process. So that's part of my job
• 26:53
  Speaker 1: is also educated. You know, there's over thirty million amputees worldwide.
• 26:56
  Speaker 1: Only five percent of the have acts to proceect devices
• 26:59
  Speaker 1: and that's big problem. Uh, and not a lot of
• 27:01
  Speaker 1: people realize that, and so part of this is educating,
• 27:04
  Speaker 1: you know. Part of this is is creating a model
• 27:06
  Speaker 1: that they can actually reach out and and uh, you know,
• 27:09
  Speaker 1: get a device through us very easily, which is what
• 27:11
  Speaker 1: we're solving with this new business model and technology. We actually,
• 27:14
  Speaker 1: if you were to approaches today, we send you a
• 27:16
  Speaker 1: three D scanner, so you can actually scan yourself in
• 27:19
  Speaker 1: the comfort of your own home. We get that data remotely,
• 27:22
  Speaker 1: we can process that, we three D print it, and
• 27:24
  Speaker 1: uh and you're off to the races. It's a it's
• 27:26
  Speaker 1: a really amazing process. Thanks very much for sharing this
• 27:29
  Speaker 1: story with us. Eastern La Chapelle. He is the founder
• 27:33
  Speaker 1: of Unlimited Tomorrow. They are based in Colorado. Thanks for
• 27:38
  Speaker 1: listening to the Bloomberg P and L podcast. You can
• 27:41
  Speaker 1: subscribe and listen to interviews at Apple podcast, SoundCloud, or
• 27:45
  Speaker 1: whatever podcast platform you prefer. I'm Pim Fox. I'm on
• 27:48
  Speaker 1: Twitter at pim Fox. I'm on Twitter at Lisa Abramo.
• 27:52
  Speaker 1: It's one before the podcast. You can always catch us
• 27:55
  Speaker 1: worldwide on Bloomberg Radio.