Stock Price Manipulation
Posted: Tue Mar 20, 2007 3:03 pm
Hardly a new activity, but the very public and almost nonchalant disclosures rather have the markets buzzing today. It seems a bit sad to have to say that the most regulated, transparent market in the world is a bit of a "scam," albeit a legal one. I've read that the top 5 brokerages (Goldman Sachs. Morgan Stanley, Merrill Lynch, et al) now account for more than 75% of the market activity. It is easy to control stock proces when the mere act of buying will raise the price.
Anyway----here's what Cramer had to say according to the NY Post:
Anyway----here's what Cramer had to say according to the NY Post:
This makes those little E-mails we all get, touting unknown pink sheet stocks, seem almost innocuous.By Roddy Boyd
New York Post
Tuesday, March 20, 2007
http://www.nypost.com/seven/03202007/bu ... _bit_too_m...
Flamboyant Wall Street trader turned TV host Jim Cramer, not known for being the shy, retiring type, might have said too much in a video interview he did for a financial Web site.
The host of CNBC's daily program "Mad Money" had hedge fund-trading desks buzzing yesterday after he bragged about manipulating stock prices during his days as a trader.
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."
However, seconds later, he acknowledged, "I'm not going to say that on TV," referring to his show on CNBC.
A remarkably successful money manager when he ran the $450 million Cramer Berkowitz hedge fund, Cramer in the Webcast shared his "tips" on how to drive a stock price down so that a short position -- a bet that a stock price would drop -- remains profitable.
He added that the strategy -- while illegal -- was safe enough because, "the Securities and Exchange Commission never understands this."
A call to Cramer was not returned.