Posted on 05/10/2002 10:28:11 AM PDT by Rodney King
NEW YORK - Loudmouth CNBC commentator James Cramer has one more reason to yell: His nemesis, disgruntled former employee Nicholas Maier, is turning out to be a bigger thorn in Cramer's side than we predicted. In April, Forbes.com broke the news that Maier, 33, who used to be a trader at Cramer's hedge fund, had been feeding information to the U.S. Securities & Exchange Commission about Cramer & Co.'s allocations of initial public offerings from Goldman Sachs (nyse: GS - news - people ). The SEC is conducting an investigation into the way investment banks apportioned IPO shares to clients during the height of the bull market. Now it turns out that Maier may have also persuaded the office of the U.S. attorney for the eastern district of New York to look into Cramer's trading. Maier boasts that, in March, he spoke with the government and handed over the transcript of his taped interview with another former trader at the hedge fund. The interview was conducted as part of his research for his book, Trading With The Enemy, a tell-all about Maier's days at the raucous Cramer & Co. trading desk. Cramer's lawyer, Eric Seiler, says that his client "is not under investigation by any U.S. attorney on any subject." Linda Lacewell, an assistant U.S. attorney, would not comment either way as to the possibility of an investigation into Cramer. But the trader in the transcript, who spoke on the condition of anonymity, has confirmed that he has since been interviewed by lawyers in the U.S. attorney's office. The transcript includes some eyebrow-raising anecdotes relating to Cramer's cozy relationship with CNBC television personalities Maria Bartiromo, David Faber and Mark Haines. Since leaving his hedge fund, Cramer has joined the network as co-host of the nightly CNBC yakfest, America Now. He also frequently cavorts with Haines and Faber on its morning show, Squawk Box. In some instances, according to the taped interview, Cramer would call the anchors with a possible news lead on a company after he had already established a position in that firm. Says the trader in the taped interview: "Before he'd call Maria maybe we'd buy five or ten thousand shares of something. You know, the name that he was about to mention. He would position the firm so that when it did come out, it would be the positive or negative short or long, depending on, you know, what information he gave." The CNBC relationship allegedly worked both ways, with Cramer making trades based on information he gleaned from the on-air talent. One tale that came up during the trader's interview with assistant U.S. attorneys involved profit made on Salomon Inc. just before an announcement that the investment bank was being bought by Travelers Group in September 1997. The trader recalls Cramer saying, "That's one for Faber." A CNBC spokeswoman denies any wrongdoing and says the network has not been contacted by any legal authorities and has no knowledge of any investigation into the network or its anchors' actions. "CNBC has the highest journalistic standards in the business. David Faber, Maria Bartiromo and Mark Haines have the utmost integrity and any allegations otherwise are completely without merit," says Amy Zelvin. Cramer was too busy to be interviewed by Forbes.com today. In an earlier e-mail, he dismissed Maier's incessant attacks this way: "As someone who had a great record that was made from years of working harder than just about everyone, I find the whole thing insulting." Maier's decision to go public with this latest tidbit may have much to do with his need to bolster his own credibility. His book came under fire when its publisher, HarperCollins, acknowledged that three pages contained false assertions that Cramer traded on inside information about hard drive maker Western Digital. "I regret the error, but it was simply that we were investigated regarding a different stock," says Maier. He also concedes that his book has sold poorly, a fate that is unlikely to befall the glib and popular magazine writer who used to be his boss. This week Cramer is launching a tour promoting Confessions of a Street Addict, his confessional about what went wrong at his once-highflying Web publisher TheStreet.com.
Cramer is about as corrupt as you can get. He used CNBC for his own profit. As far as Haines, Faber and Bartiromo go, what can you say. They just bent over backward trying to minimize the bad publicity for Merrill Lynch. They are up to their necks in the Wall Steet scams no matter how hard they work at least appearing to have integrity. They will do whatever is necessary to protect their paychecks including defending the fraud and corruption of the likes of Cramer and Merrill Lynch.
Richard W.
You're kidding. Cramer was on FOX? How did I miss that? The guy should be in jail, not on TV. I'm not that crazy about Kudlow either after I learned that he was on the take from Enron. Doesn't anyone have any principles or ethics anymore?
Richard W.
He got paid for consulting.
That's hardly "on the take."
Oh I'm sure he did. So did Hugh Rodham. Really now, who would hire either of them to give advice? Kudlow was on the take. He has nothing of value to add to any business.
Richard W.
Oh, sure, blame the Italians! LOL!
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