Jim Cramer on Stock Market Manipulation -- Hang him

[David Farber <dave () farber net>]

Begin forwarded message:

From: Bob Drzyzgula <bob () drzyzgula org>
Date: March 14, 2009 8:52:11 AM EDT
To: David Farber <dave () farber net>
Cc: ip <ip () v2 listbox com>
Subject: Re: Jim Cramer on Stock Market Manipulation -- Hang him

On 14/03/09 07:05 -0400, David Farber wrote:
> Begin forwarded message:
>
> From: Wulf%20Losee <qx49 () comcast net>
>
> [...] Is it an offense under current
> Securities and Exhange laws to spread baseless rumors? Cramer says  
> "no"
> -- not if you don't have insider knowledge. So the knowledgeless have 
> power to sway the sentiment of the market, whereas the knowledgeble  
> have
> to keep silent. Ironic?

Um, no. Especially if you are talking specifically about
*baseless* rumors, and the spreading -- as opposed to
creation -- thereof, then someone with no inside knowledge
might possibly be excused under the argument that they
were only reporting what was being said by others [1].
However if someone *with* inside knowledge -- knowledge
that a rumor is in fact baseless -- repeats that rumor
then they are perpetuating the fraud.

While Wulf didn't specifically address this in what he said
here, I certainly hope that Cramer would agree (although
that 2006 video might suggest that he doesn't) that it
should *not* be OK under any circumstances to *create*
baseless rumors, i.e. to make stuff up out of whole cloth
simply for the purposes of manipulating the market. Because
even if you don't have inside information about what is
going on inside a company, you should at least know that
you *don't* know what you are talking about when you are
fabricating such a story, i.e. you at least have "inside
information" about the rumor, if not the company.

--Bob

[1] Although, as Stewart pointed out in the interview, the
reporter could at least do the listener the courtesy of
checking the story out a bit before repeating it.





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