Something of a scandal has erupted over remarks made by Mad Money host Jim Cramer in the above video from TheStreet.com explaining how traders attempt to play the market price of stocks they take short positions in. One way of doing this--which Cramer describes as widespread although perhaps illegal--is for a hedge fund trader to call reports and analysts to spread negative stories about the stock. Reactions to Cramer's remarks are divided about whether he is performing a public service in revealing widespread market manipulation and whether he is providing how-to guide to manipulating stocks.
The New York Post broke the story this morning:
In the video from TheStreet.com's "Wall Street Confidential" Webcast, Cramer boasts about manipulating the price of a high-flying stock down, and even acknowledges that doing so might have been illegal. The video is making the rounds on YouTube."A lot of times when I was short, I would create a level of activity beforehand that would drive the futures. . . . It's a fun game," Cramer said in the Webcast, which was moderated by TheStreet.com Executive Editor Aaron Task.
Cramer later said that "no one else in the world would ever admit that, but I don't care."
One added thing to watch for: Jim Cramer takes a swipe at easily manipulated financial reporters, who he calls "the Bob Pisani's of the world." We're sure his CNBC colleague appreciates it.
Cramer Reveals A Bit Too Much [New York Post]
Posted by Ben_H, Mar 20, 2007 10:28AM
Elliot Spitzer's good buddy. Guess now that The Monopolist of Virtue has moved on to the Governor's mansion he can say it is no longer his place to go after behavior like Cramer's... though jurisdictional issues never stopped him in the past...