Investment Guru's Ethical Lapse?
March 23, 2007 — -- 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."
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