This is Chapter 5 of a 15 chapter series. The entire series is listed here

“SELL! SELL! SELL!” shouted Jim Cramer on March 28, 2007.
The CNBC “journalist” assured his viewers that the FDA advisory panel would vote that Dendreon’s
treatment for prostate cancer was neither safe nor effective (notwithstanding the fact that the FDA had
given the treatment “priority review” status because Provenge had shown strong trial results and was
destined for critically ill patients).
On the following day, when the FDA advisory panel voted unanimously that Provenge was safe and
overwhelmingly that it was effective, Cramer said, once again, that he had made “a mistake.” By way of
explanation, Cramer said that he had mixed up Dendreon’s treatment, Provenge, with Provasic, the
fictional drug from the 1993 Hollywood movie “The Fugitive,” in which Harrison Ford plays a doctor trying
to expose an evil pharmaceutical company called Devlin MacGregor.
But Cramer, again drawing upon his vast medical expertise, continued to insist on his improbable
prediction that Provenge remained unlikely to gain FDA approval.
By this time, a number of bloggers and stock market observers had noted that Cramer, a former hedge
fund manager, had recently made a video available to a limited number of high-paying subscribers to his
financial news website, TheStreet.com. In this video, Cramer advised his viewers – mostly Wall Street
operators — to illegally drive down stock prices.
“Maybe you need $10 million capital to knock [a stock] down,” Cramer had said. “It’s a fun game
and it’s a lucrative game…By the way, no one else in the world would ever admit that, but I don’t
care…Now, you can’t foment…You can’t create yourself an impression that a stock’s down. But
you do it anyway because the SEC doesn’t understand it…This is just actually blatantly
illegal…But I think it’s really important to foment…You get [the CNBC reporter]…talking about it
as if there’s something wrong [with the stock]…Then you would call The Wall Street Journal and
get the bozo reporter…if you’re not doing it maybe you shouldn’t be in the game.”
The bloggers and observers who pointed to this video as evidence of Cramer’s skullduggery also noted
that Cramer had once planned to run his hedge fund out of the offices of Ivan Boesky, the famous coconspirator of the criminal stock manipulator Michael Milken. When Boesky was indicted, Cramer instead
went to work with Michael Steinhardt, the Boesky-Milken crony and “prominent” hedge fund manager
whose father was the “biggest Mafia fence in America” and who was financier for the fugitive billionaire
Marc Rich, for whom Steinhardt later arranged a pardon from Bill Clinton.
By 2007, I had (while working as an editor for the Columbia Journalism Review) spent close to a year
studying the work of Cramer and a clique of influential journalists, most of whom had previously worked in
high-level positions for Cramer’s website, TheStreet.com. I had discovered that the existence of short-

side stock manipulation was denied by these journalists (including Cramer, when he was communicating
to general audiences, as opposed to when he was explaining to select groups of Wall Street operators
how to do the thing he was publicly saying does not exist).
The journalists were especially keen to whitewash the crime of naked short selling, and given the threat
that this crime posed to so many companies and to the very stability of the financial system, it seemed to
me that these journalists were engaged in a cover-up of immense proportions.
I had also discovered that these journalists routinely reported negative stories that contained bias,
falsehoods, and well-timed “mistakes.” The vast majority of these stories were sourced from one
particular network of hedge fund managers and miscreants. Invariably, these stories were about public
companies that the hedge fund managers had sold short. And, invariably, these stories were aired right at
the time that the target companies were getting bombarded with phantom stock.
Moreover, most of the hedge funds and miscreants in this network seemed, like Jim Cramer, to be
connected in important ways to the criminals Michael Milken and Ivan Boesky, or their close associates.
One of them was David Rocker.
Last year, Rocker’s hedge fund, Copper River (previously known as Rocker Partners), was shut down.
Soon after, Carol Remond, a Dow Jones Newswires journalist who had close ties to Rocker, revealed that
Rocker’s most important trading strategy had been to abuse “the Madoff Exemption” allowing market
makers to engage in naked short selling (see “Carol Remond Tells a Joke She Doesn’t Get” for details) .
According to Remond, when the SEC closed this loophole, making it more difficult for Rocker
Partners/Copper River to work with option market makers to manufacture phantom stock, the hedge fund
went out of business. What she left unexplained, however, was that such exploitation was illegal.
Therefore, Dow Jones reporter Carol Remond was in fact bemoaning the tragedy that a hedge fund had
to close because it was not able to break the law anymore.
Rocker had previously worked as a top trader for Michael Steinhardt, the Boesky and Genovese Mafia
crony whose offices had also housed Jim Cramer’s hedge fund. In later years, Rocker became the largest
outside shareholder in Cramer’s financial news website, TheStreet.com.
In 2006, staff at the Securities and Exchange Commission suspected that Rocker and other hedge funds
in his network were working with an “independent” financial research shop called Gradient Analytics and
a select group of journalists to disseminate false information in order to drive down stock prices. The SEC
issued subpoenas to Rocker, Gradient, TheStreet.com, Jim Cramer, Herb Greenberg (a founding editor
of TheStreet.com who was then working for MarketWatch.com and CNBC), and that Dow Jones reporter,
Carol Remond.
In response, Cramer famously vandalized his subpoena on live television.
Other journalists (most of them tied to Cramer) went berserk, claiming that
Rocker had done no wrong and the SEC’s subpoenas had violated the
media’s first amendment right to free speech. Soon after, the SEC said it
would not enforce the subpoenas it had issued to journalists. And a year
later, the commission dropped its investigation of Gradient and Rocker.
In May of 2006, shortly after the SEC announced that it would not enforce its
subpoenas, a recently dismissed SEC attorney named Gary Aguirre wrote an eye-popping letter to the
United States Congress in which he stated that he had led an SEC investigation into allegations of
rampant naked short selling and insider trading at a hedge fund called Pequot Capital.
Aguirre said that his rank-and-file colleagues at the SEC believed that Pequot’s naked short selling had
the potential to “seriously injure the financial markets,” but before he could complete his investigation,

Aguirre’s superiors at the SEC, captured by powerful Wall Street interests, had fired him for political
reasons.
Since then, a U.S. Congressional Committee has investigated and issued a lengthy report noting that
there seemed to be evidence that Pequot was indeed engaged in “stock manipulation” (naked short
selling). As for the SEC’s failure to fully investigate Aguirre’s allegations, the Congressional Committee
concluded that the “picture is colored with overtones of a possible cover-up.”
The SEC inspector general also issued a report that backed up all of Aguirre’s claims.
Late in 2008, the SEC re-opened its investigation into Pequot Capital. And in May, 2009, Pequot manager
Art Samberg shut down the fund, noting that the investigations had made the “situation increasingly
untenable for the firm and for me.” In August 2009, Samberg, along with John Mack, who is now the CEO
of Morgan Stanley and stands accused of participating in Samberg’s insider trading scheme, received
Wells notices. A Wells notice is the SEC’s way of saying, “We are going to bring action against you.”
But from what is known publicly, the SEC is only looking into insider trading at Pequot. As for Aguirre’s
investigation into Pequot’s alleged naked short selling – the crime that had the potential to “seriously
injure the financial markets”—the SEC has said nothing.
Remember, as far as the SEC is concerned, illegal naked short selling is a big secret – “proprietary
trading strategies.”
At any rate, it is worth noting that Cramer’s financial news website, TheStreet.com, had several founding
partners. One was Cramer. Another was Marty Peretz, the Milken-Boesky crony who was–along with
Marc Rich, Boesky, and the Genovese Mafia—a key limited partner of Michael Steinhardt (the fellow who
gave Rocker his start and also incubated Cramer’s hedge fund).
A third founding partner of TheStreet.com was famously alleged to have engaged in rampant illegal
naked short selling, just as David Rocker, once the largest outside shareholder of TheStreet.com, was
reported (by Dow Jones reporter Carol Remond, unwittingly) to have engaged in rampant illegal naked
short selling in cahoots with options market makers.
The name of this third founding partner of Cramer’s website, TheStreet.com, was…Pequot Capital, the
hedge fund whose alleged naked short selling and insider trading were the targets of Gary Aguirre’s SEC
investigation — the investigation that got quashed, leading to one of the greatest scandals in SEC history.
So it goes almost without saying that Pequot Capital was the fifth of seven “colorful” hedge funds that
held large numbers of put options in Dendreon at the end of March, 2007 – right at the time when Cramer
was shouting “SELL! SELL! SELL!” and criminal naked short sellers were flooding the market with at least
9 million phantom Dendreon shares.

In addition to Cramer’s rants, there were other indications that Dendreon might be in the sights of some
powerful players, and might therefore be in trouble – despite the fact that Provenge, its treatment for
prostate cancer, seemed to be on the fast track to FDA approval.
On March 22, 2007, CNBC’s Mike Huckman wrote in a blog that he remembered “sitting at a table at a
rare Dendreon analyst meeting a few years ago and someone from a Connecticut hedge fund leaned
over and whispered in my ear, ‘It [Provenge] doesn’t work.’” Huckman made no indication of questioning
whether the hedge fund might have had a motive for saying that.

There were odd mutterings from other quarters as well. On the day before the FDA’s advisory panel met
to vote on Provenge, Matthew Herper of Forbes magazine published an article casting doubts on
Dendreon’s prospects. He wrote that “researchers, statisticians and Wall Street analysts are fiercely
debating whether there is enough data about [Dendreon’s] radical new treatment.”
In fact, there was no “fierce” debate at all. For most Wall Street analysts, the calculation was rather
simple. Given that Dendreon’s trials had shown that Provenge was safe, and given that the treatment was
destined for end-stage patients (hence its “priority review” status), the advisory panel was likely to vote in
its favor. In 97% of all cases, the FDA had followed the recommendations of its advisory panels. And
when FDA advisory panels had recommended approval for drugs destined for dying patients, the FDA
had accepted its panels’ recommendations 100% of the time.
When the FDA approved treatments, the companies that developed them almost always saw their stock
prices rise. So from the perspective of most Wall Street analysts, the future for Dendreon looked bright.
As for those “researchers and statisticians,” most agreed that Provenge was not only safe, but also
effective. However, a small number of researchers and statisticians (and the hedge funds) were
whispering in reporters’ ears. They were saying that Provenge doesn’t work.
But there were excellent reasons to doubt the words of the researchers who were critical of Provenge.
And, as we will see, the most prominent of them were preparing (with the possible connivance of a
criminal “philanthropist” named Michael Milken and seven “colorful” hedge fund managers) to cash in on
perhaps the strangest occurence in the FDA’s 80 years of existence.