Jim Cramer may still be yelling "booyah" on the set of his CNBC program, but a recent confession that surfaced this week on YouTube sounded more like "fooled ya."
Cramer, who co-founded TheStreet.com, made comments in a Wall Street Confidential interview that was posted on the Web site last December that revealed how he manipulated stock prices to suit his purposes as a hedge fund manager.
He claims everything he did was legal, but that other hedge fund managers he knew were involved in illegal activities.
"A lot of times when I was short at my hedge fund -- meaning I needed [a stock] down -- I would create a level of activity beforehand that could drive the futures," said Cramer. "It's a fun game, and it's a lucrative game."
The original Web video didn't get much attention. But it was recently posted to YouTube, where it started making the rounds.
Cramer says that hedge fund managers often pass along rumors about a company to reporters at major financial publications in the hopes that it will move the stock in the direction the hedge fund manager wants. He said the tactics are illegal but never said he personally used them himself.
Now, Cramer may have investigators as well as investors hanging on his every word.
He recently spent some time trying to clear up the YouTube inspired mess, telling national radio talk show host Don Imus he "ran a clean shop," and "tried not to be a bad guy."
Hedge funds have long been a murky part of the investment world. Unlike stocks and mutual funds they are not directly regulated by the Securities and Exchange Commission or the National Association of Securities Dealers.
They are called hedge funds because they were originally conceived as a means of hedging investment risk by combining both the buying of stocks in the hope they go up and the investment in others in the hope they go down.
Jim Cramer had great success as a hedge fund manager before coming to television. And now that he's talked about how he had it, not everyone thinks that it's a bad thing -- especially those on the outside of the investment world but on the inside of studying ethics in society.
Michael Josephson is the founder of the Josephson Institute of Ethics in Los Angeles.
He doesn't see Cramer as a villain but rather as someone who could potentially affect Wall Street practices for the good. "He hasn't admitted he's a Mafia hit man. He's saying he manipulated the system to get an edge."
Josephson believes Cramer should reveal more about how hedge funds really work and likened him to former Major League star Jose Conseco, who blew the whistle on the widespread use of steroids in baseball. Cramer could do a lot to clean up the industry, he said, by telling the public things that it doesn't know.
"I believe he said these things because he has come over from the other side," said Josephson. "His viewers love him, and he relishes his following. He's trying to be like a Dutch uncle who wants to give his best advice."
Having a platform to give investment advice or even just reporting on stocks and businesses is something that broadcasters and journalists must handle carefully.