Cramer said: You can’t foment. That’s a violation… But you do it anyway because the SEC doesn’t understand it.
“You can’t foment. That’s a violation… But you do it anyway because the SEC doesn’t understand it,” said Cramer speaking of his strategy of falsely presenting a stock as ‘down.’
Cramer spoke of making use of the media and news establishment to ‘report’ information about companies and encourage the development of stories which may not have hit significant coverage to build favorable reputations for his companies or stocks. Much of Cramer’s technique seems to involve using his exposure and influence in media circles — particularly his operation of the ‘adviser’ show, Mad Money — to create opinions which are complex enough the SEC cannot enforce them as strict fomenting.
One of the basic strategies of Cramer’s fomenting, he said, was, that in the situation a hedge fund (such as his own) was holding a short position in a company which reported excellent quarterly news, the fund would call up brokerage houses and either feed them bad news / blatant lies, or order a huge set of short sales — suggesting that investor confidence in the company was falling. The slew of bad news would create a temporary fall long enough for the manager to resolve his short position and conclude a tidy profit.
The media has always been part of stock manipulation since the beginning of time. The media and journalist are 2 of the top ten psychopaths' professions. I don't believe anything that is in print other than pure facts and figures, but then you have to question them too.