Former GOP Rep. wants Cramer 'looked at' for market manipulation
Jon Stewart's blasts at the misleading advice offered over the last year by financial network CNBC have been a comedy staple on The Daily Show for over a week. But not everybody is laughing -- and now one former congressman is suggesting that CNBC's Jim Cramer should be investigated for possible stock market manipulation when he was the manager of a large hedge fund.
"I think he's become a poster child for why hedge funds need more regulation and transparency," former Virginia Representative Tom Davis told CNN on Thursday.
Davis's remarks were sparked by a video from 2006, which has now gone viral, in which Mad Money host Cramer explained on his own website how he could influence stock prices a hedge fund manager.
"You take a bunch of stocks and make sure that they're higher," Cramer suggests in the video. "Maybe commit five billion in capital to it. ... No one else in the world would ever admit that, but I don't care."
When asked, "Is any of this illegal?" Davis replied, "It wasn't, but it should be."
"He may well have crossed the line," Davis continued. "I think that's something somebody ought to be looking at. I think the tragedy is, over the last few years, nobody's been looking at this at all"
Davis, a moderate Republican, served as chairman of the House Government Reform Committee from 2003 to 2007, when it was known for exercising almost no oversight of the Bush administration.
CNBC declined to comment on Davis's remarks, but CNN obtained a statement from Cramer saying, "No one knows and respects the securities laws more than I do. ... When I was a hedge fund trader in the 1990's, I played fair and I did nothing that violated those laws."
The Daily Show's comedy barage began last week when CNBC's Rick Santelli cancelled an appearance with Stewart, then switched its focus to Cramer's erratic record of stock tips. Cramer is scheduled to make a guest appearance on The Daily Show tonight.
This video is from CNN's American Morning, broadcast Mar. 12, 2009.
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