Subject: File No. S7-12-06
From: Thyra Mangan

March 28, 2007

It is interesting that you continue to accept comments, while failing to enforce the current regulations that you have, and apparently choose to misunderstand.

While you fail to enforce delivery of equity shares, the individual investor is manipulated by the hedge funds who laugh at you and individual investors alike. They don't believe you will enforce the laws and it looks like you are buying time again, perhaps to accommodate your friends in hedge funds.

Jim Cramer was interviewed December 23, 2006 and had this to say about how they manipulate the market, and thumb their nose at you. I've typed out the first half of it, and maybe a little more. It's enough.

Wall Street Confidential: Cramer On Games Hedge Funds Play

Arron Task: Again today we have the misdirection from the futures its an up market right now and stocks are down again. Is this just because of the holiday market that we are seeing this again?

Jim Cramer: You know, a lot of times when I was short at my hedge fund and I was positioned short, meaning I needed it down. I would create a level of activity beforehand that could drive the futures. It doesnt take much money. Or if I were long and I would want to make things a little bit rosy, I would go in and take a bunch of stocks and make sure that they are higher and maybe commit $5million in capital to do it, and maybe effect it. What you are seeing now, it probably is a bigger market and maybe need $10million in capital to knock the stuff down. But, its a fun game, and its a lucrative game, and you can move it up and then fade it. Thats often creates a very negative feel. So lets say you take a longer term view intraday. You say listen, Im going to boost the futures and then when the real sellers, real market comes in they are going to knock it down and create a negative view. Thats a strategy very worth doing, when you are valuing on a day to day basis. I would encourage anyone in the hedge fund to do it. Because it is legal and its a quick way to make money and very satisfying.

By the way, no one else in the world would admit that, but I dont care.

Aaron: Thats right and you could say that here.

Cramer: (heh) Im not going to say it on TV.

Aaron: There are so many more hedge funds today than when you were managing your hedge fund. You think that exacerbates the moves or makes it tougher?

Cramer: The hedge funds are positioned long/short, okay? -- not just long with mutual funds, so its really vital these next 6 days, cause of your payday, youve really got to control the market. You cant let it lift. When youve got a Research In Motion its really important to use a lot of your fire power to knock that down cause its the fulcrum of the market today. So, lets say I was short. So what Id do is I would hit a lot of guys with RIMM. Now you cant foment -- thats a violation of. You cant foment, you cant create yourself the impression that a stock is down. But you do it anyway, because the SEC doesnt understand it, so that is the only sense I would say, that it is illegal. A hedge fund thats not up a lot really has to do a lot now to save itself. So, this is different from what I was talking about buying the queues and stuff. This is actually blatantly illegal. But when you have six days and your company may be in doubt because you are down I think it is really important to foment if I were one of these guys. Foment the impression that RIMM isnt any good because RIMM is the key. You would hit this guy and that guy, when you see a guy is bidding you wipe that guy very quickly. What I used to do was if I wanted to go higher I would take and bid, take and bid, and if I wanted to go lower I would hit and offer, hit and offer and I could get a stock like RIMM for -- that might cost me $15-20 Million ante to knock RIMM down. But it would be fabulous because it would beleaguer all the moron longs who were also keying in on RIMM. Yes, we are seeing that. Again, when your company is in survival mode it is really important to defeat RIMM and get the Pisanis in the world and people talking about it as if there is something wrong with RIMM. Then youd call the Journal and you get the bozo reporter on RIMM and you would feed that PALM has got a killer its going to give away. Those are things you must do on a day like today or maybe you shouldnt be in the game.

Aaron: Another stock that a lot of people are focused on is APPLE

Cramer: Apple is very important to spread the rumor that both Verison and ATT have decided that they dont like the phone. Its very easy one to do because its also you want to spread the rumor its not going to be ready for Mac World. Its also going to be easy because the People who write about APPL want that story. And you can claim its credible cause you spoke to someone at APPL cause apple doesnt refute statements.

Aaron: Theyre not going to comment

Cramer: So, Its really an ideal short. And I would, again, if I were a short apple, I would be working very hard today to get that. And the way you do that is you pick up the phone and call six trading desks, and say listen I just got off the phone with my contact at Horizon and he has already said listen were a Lucky G house, were a Samsung house, were a Motorola house, there is no room for APPL. They want too much, we are not going to let them in, were not going to let them do what they did to music. And I think that is a very effective way to keep a stock down.

Aaron: Right

Cramer: I might also, by the way, because the stock at 84-85. Little bit of capital you go buy some Jan 80 puts that makes it look like there is going to be something going on. So maybe you give Morgan an order to buy 1000 Jan 80 puts. Then you go position limit with a -- use a hat firm that doesnt know what the heck its doing maybe even UBS for puts. You just kind of create an image that there is going to be news next week. And thats going to frighten everybody. They all go out and say large put buyer at UBS. Then they call pasanis. You have to use those guys. Say Listen, Im told there is a big put buyer and its SAC. You would do that too. These are all whats really going on under the market what you dont see. Whats important when you are in hedge fund mode is to dont do anything remotely truthful because the truth is so against your view. And its important to create a new truth -- develop a fiction. The fiction is developed by almost anybody who is down like 2% or up 6% here. You cant take any chances. You cant have the market up any more than it is, if you are up 6, because starting Jan 2 youll have all your money coming out. What would you do if you were in that situation and you feel like youre desperate. You would do this exact thing.

Aaron: Youre talking about the mechanics of the market.

Cramer: Cash is much more important than the fundamentals.

Aaron: Okay, but in terms of fundamentalseven writing about what you think.

Cramer: Who cares about the fundamentals? RIMM just blew out the Q, but look what people can do. I mean that is fabulous thing. Now the great thing about the market it has nothing to do about the actual stuff. Now look maybe over two weeks from now the buyers might come to their senses and realize everything they heard was a lie. But then again Fanny Mae lied about their earnings of $6Billion. Its just fiction, fiction and fiction. I think it is important for people to recognize is that the way the market really works is to have that nexus of hit the brokerage houses with a series of orders that can push it down , and leak it to the press, and get it on CNBC -- that is also really important. Then you have a vicious cycle down. Its a pretty good game. It can pay for a percent or two.

Aaron: and then you get long before Mac World, I mean the expectation?

Cramer: Yes because you drove it down, you have to use the other side. And there is a case where I would say the January 80 puts are justified, because after Ive moved the stock down to 80 I can buy a lot of common and play it into Mac World where they will probably introduce the phone and Verison is going to take it.

Cramer: What Wall Street Confidential is: is not giving you the party line. Oh, here is the party line anyway, I spoke to Apple on the phone, I hear the phones are good and Verison might take it and, as a matter of fact, the RIMM sellers. I dont think they know what they are talking about. The problem with the cell phone business frankly is these killing each other. Woah....

I truely wish you would straighten up and clean up your act.


An Individual Investor