Cramer's Advice for the SEC

Everything seems to be a “total insider’s game” these days, Jim Cramer said Thursday on CNBC's "Mad Money."


U.S. stocks were once again shaken up by uncertainty coming out of Europe, with the Dow Jones closing up 33 points at 12,529, the S&P 500 notching a gain of 0.14 percent to trade at 1,320 and the Nasdaq losing ground by 0.38 percent at 2,839.

While the U.S. has inevitably fallen hostage to the drama unfolding overseas, Cramer said, a handful of domestic legal disputes have also hurt investors. Many have suffered sharp blows from the likes Facebook’s questionable IPO proceedings and JPMorgan’s trading fiasco, though CEO Jamie Dimon said the situation was overblown.

So, how is it they have been able to get away with all of this? Cramer said the problem was threefold.

First, he said the average, everyday shareholder does not enjoy enough protection from Washington, because the administration does not place enough relevance on shielding shareholder rights. “They act as if stockholding is the province only of the rich, and the rich can take care of themselves,” he said.

Second, Congress does not take enough action where stockholders are concerned, because behemoth corporate entities like JPMorgan generally have much more power and many more lobbyists on their side. “Think about how these big banks have been able to beat back or water down regulation time after time after time,” Cramer said. He also proposed that instead of getting a raise, Dimon should be handing back his bonus and accepting none at all this year.

And lastly, the “Mad Money” host said federal regulators like the SEC should be bringing down the gavel on individual actors, rather than entire firms. Too often do the firms battle the government with shareholder money, he said. Apart from more specific scandals like insider trading, Cramer said the shareholders pay, not the executives who committed the transgressions.

“You don’t want institutions being prosecuted criminally, because that wipes out a company and takes away a huge number of jobs for just a couple of rotten apples,” he said. “But you do want those rotten apples to pay and suffer.”

The bottom line: “The outrages will continue because the government lets them continue,” he said. “And frankly, I don’t expect any change as long as no one in Washington speaks up for you — the courageous, but outgunned individual investor.”

When this story was published, Cramer’s charitable trust owned JPMorgan.

Call Cramer: 1-800-743-CNBC

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