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Tell-all book on Cramer's TV dealings
By Kristen Gerencher, CBS.MarketWatch.com
Last Update: 4:00 PM ET March 3, 2002
NEW YORK (CBS.MW) -- An upcoming book accuses celebrity investor and market pundit Jim Cramer of manipulating CNBC news anchors and using his own TV appearances to make quick profits on stock trades, according to Forbes.
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"Trading With the Enemy," by a former employee at Cramer's investment firm, says he touted stocks in which his hedge fund had sizable positions, only to dump them shortly after he passed the information on to CNBC anchors Maria Bartiromo and David Faber, according to the Forbes' report.
The book, to be published this month by Harper Business, accuses Cramer of gaining early word from major brokerages of their analysts' upgrades and downgrades, and then taking positions in stocks being affected.
"We were the first firm most brokerage houses told such news [of upgrades and downgrades], and Jim decided to use this early-call status to help the reporters, who all wanted to break a story," former employee Nicholas Maier writes in a passage quoted by Forbes.
Attempts by CBS.MarketWatch.com to reach Cramer for comment on Sunday were unsuccessful. The Forbes report quoted from a CNBC statement in which the network said it stood by the integrity of its reporters. The statement said Cramer denied the accusations.
In its report about the Maier book, Forbes cited only one specific trade. Cramer's firm is said to have told ordered Goldman Sachs to buy 100,000 shares of MCI Group after receiving a call from Faber. Less than an hour later, Faber was on the air reporting MCI was the subject a takeover rumor.
Maier admitted he didn't know what was said when Faber called. "Reporters often called us, asking if we could confirm a rumor in the marketplace," he writes.
Despite paying lip service to stocks he recommended investors hold for the long-term, Cramer would often do the opposite and sell for a quick profit, according to Forbes' account of the book.
"Our real strategy, however, was all about taking profits now," Maier writes in a passage. "Back at the office, we were supposed to dump stocks after a quick half-point gain. On TV, Jim would tout a stock we owned, but if it moved up, we would sell."
Maier, who worked for Cramer from 1994 and 1998 at Cramer & Co., says in the book that the firm had arrangements with investment banks to commit to after-market orders for initial public offerings as a way of "making sure hot deals stayed hot."
Cramer is co-founder of TheStreet.com, an online financial news service and a competitor to MarketWatch.com, publisher of this report. The two companies have a distribution agreement under which MarketWatch.com carries articles published by TheStreet.com.
Kristen Gerencher is a reporter for CBS.MarketWatch.com in San Francisco. |
