Kevin,
I disagree. The difference between Roger and Cramer is that Cramer is in a position to influence the direction of the market for many issues. Roger is just a guy with an opinion.
The Wall Street Journal -- to cite just one example -- has very tight rules about when it's columnists may trade in a stock. A few years ago they fired, sued, and had criminal charges brought against the "Heard on the Street" columnist for trading in advance of his column.
The precedent was a fairly simple one: The "Heard on the Street" column is widely published and widely respected. It has been shown to have sufficient influence to move markets. Therefore, any advance knowledge of it's contents constitutes material, non-public information which can influence a stock's performance.
Cramer doesn't have quite the influence of "Heard on the Street", but is getting close, at least among those people who follow internet issues. His opinions DO move markets, and IMO also constitute material non-public information.
This problem isn't specific to Cramer. On the short side, Asensio is just as bad. Shorts things, then issues a press release, knowing full well that his press releases can take 50% off a stock overnight.
The investment houses, for all their troubles, do a pretty good job of separating the analysts from the trading decisions, and generally put restrictions on trading in immediately before or after a report is issued.
mg |
