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Galleon’s Just the Beginning

Tuesday, 20 Oct 2009 | 7:45 PM ET

Regulators’ pursuit of Galleon Group is commendable, Cramer said Tuesday, but there’s another group that so far has escaped the justice system: the money managers who nearly shorted the banks into oblivion, as well as our financial system.

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“Nailing these guys should be the government’s top priority,” Cramer said.

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These bear raiders took heavy short positions in the banks, then spread rumors of their supposed impending collapse as a way to generate tremendous profits. And they almost wrecked an entire sector of the US economy in the process. Cramer was adamant about finding the people responsible and making them pay for it.

It shouldn’t be too hard to do, he said. The government has tapes, but hasn’t yet revealed any potential incriminating evidence on them. There are also brokerage tapes that record every trade. A simple review could produce a long list of potential defendants.

Cramer would never excuse Galleon’s misdeeds, but insider trading is often viewed as a victimless crime. But these bear raiders hurt us all, he said, “and right now they look like they’re going to get away scot-free for doing it.”

So “let’s pursue them as aggressively as the government is pursuing Galleon,” Cramer said.

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