March 2007 – Financial Treason & Crime

Daniel Pannone, The Signal, 26 March 2007

When I wrote the story about Jim Cramer two weeks ago, I had the feeling that it would not be the last time I mentioned him. However, I’m surprised how quickly Cramer provided me with controversy to criticize.

Cramer has recently gotten himself into trouble after he made comments that could be construed as a discussion of stock and market manipulation on a Wall Street Confidential video segment from thestreet.com.

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03/22/200702/19/2021

Article: Cramer vs. Cramer

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Cramer vs. Cramer

Henry Blodget, Slate, 22 March 2007

Jim Cramer and I had a bit of a tiff a few weeks ago, so some readers might view this column as just another round in that fight. Others might see it as the pot calling the kettle black, orschadenfreude. Think what you will—but as the author of a column about bad investment advice, I feel compelled to comment on what just might qualify as the worst financial counsel ever offered.

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03/21/200702/19/2021

Article: Jim Cramer Admits To Stock Manipulation When At Hedge Fund

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Jim Cramer Admits To Stock Manipulation When At Hedge Fund

Philip David, Seeking Alpha, 21 March 2007

My thanks to Trader Mike, who wrote a nice article on a subject we had been discussing all weekend on the member site as all the market manipulation of the past two days made me forget to talk about the evidence of market manipulation we uncovered last week.

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03/20/200703/04/2021

Article: Cramer bragged of manipulating stock prices

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Cramer bragged of manipulating stock prices

In an interview for a financial website, Jim Cramer, the extroverted host of CNBC’s “Mad Money,” boasted about manipulatin Cramer g stock prices when he was a Wall Street trader.

In a webcast on TheStreet.com that has been widely viewed on YouTube, Mr. Cramer spoke about bringing down the prices of a high-flying stock and admitted that his actions might have been illegal.
“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,” he said in the interview with TheStreet.com’s executive editor Aaron Task.

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03/14/200705/15/2020

Article: Goldman to pay $2M to settle SEC case

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Goldman to pay $2M to settle SEC case

Associated Press, 14 March 2007

Goldman Sachs Group Inc.’s clearing unit has agreed to pay $2 million in civil penalties to settle allegations that it allowed customers to illegally profit by selling securities short just before public offerings of stock, regulators said.

It marks the first settlement of a Securities and Exchange Commission and NYSE Regulation Inc. case alleging that a prime brokerage firm played a role in a type of abusive short-selling practice that has prompted some companies to launch a high-profile campaign against “naked” short selling. That involves selling borrowed shares without having first borrowed the shares.

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03/14/200705/15/2020

Article: Goldman Snared In Naked Shorting Probe

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Goldman Snared In Naked Shorting Probe

Liz Moyer

Forbes, 14 March 2007

One of Wall Street’s biggest prime brokers has been taken to task by the Securities and Exchange Commission and the Big Board for not catching on to its customers’ illegal trading activities.

Goldman Sach’s clearing and execution division is paying $2 million to settle accusations it relied too heavily on what its customers told it without investigating trading activity that showed signs of something being amiss.

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03/13/200704/01/2021

Article: Bloomberg TV Examines ‘Phantom Shares’ in Special Report Tonight

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Bloomberg TV Examines ‘Phantom Shares’ in Special Report Tonight

Bloomberg , 13 March 2007

NEW YORK, March 13 /PRNewswire/ — Tonight BLOOMBERG TELEVISION(R) examines a little-known stock trading practice that can be affecting your portfolio and your company. The special report, titled “Phantom Shares,” explores the problem of “naked shorting” in the stock market. The half-hour BLOOMBERG TELEVISION program is scheduled to air on Tuesday, March 13, 2007 at 7:00, 9:00 and 10:00 p.m. ET.

Every day, millions of shares of stock are sold but can’t be delivered because of an obscure trading practice called “naked short selling.” In a normal short sale, an investor borrows shares and sells them, making a profit if the price falls by replacing the borrowed shares with cheaper ones. In a naked short sale, an investor doesn’t borrow the shares, but sells them anyway. In extreme cases, the investor sells “Phantom Shares,” shares that don’t exist. The BLOOMBERG TELEVISION report, anchored by Mike Schneider, explains this practice, how it’s executed and what the Securities and Exchange Commission is doing in an effort to control it. Continue reading “Article: Bloomberg TV Examines ‘Phantom Shares’ in Special Report Tonight”