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Pastimes : James Cramer Skeptic Thread

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To: James J. Cramer who wrote (972)	3/25/1999 9:10:00 PM
From: ThomasJeferson	Read Replies (1) of 1254

Cramer: According to Mark Haines of CNBC, trading on take-over rumors is a violation of the SEC's 10b-5 rule per the Supreme Court opinion in US vs O'Hagan. The reason is because the right to benefit from the knowledge of a pending but secret take-over is reserved exclusively for the owners of the bidding corporation. Also, Powell's footnote 13 in Dirks vs SEC says that non-public information should not be traded on if it is obtained by stealth (unless the information is disclosed). You wrote a column in the September 15, 1997 issue of the New York Observer about receiving a take-over tip from a broker. You wrote that you did not make a trade because his information was not reliable, and you also wrote about "Fifteen years of trading on rumors, during the greatest period of takeovers ever...." Sure, everyone does it and everyone gets away with it. Does that make it legal and ethical?

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