Should You Trust Jim Cramer?

by Alan M. Dershowitz
July 18, 2011 at 12:30 pm

http://www.gatestoneinstitute.org/2276/jim-cramer-trust

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You know Jim Cramer. He's the star of Mad Money, the guy who tells you how to make lots of dough by taking his advice about hot stocks (such as Bear Sterns just before it crashed). Before that he made lots of money for himself and his clients by running a successful, if controversial, hedge fund. And before that, he briefly worked for me as a research assistant while he was a student at Harvard Law School.

In each of these positions, he was in a fiduciary relationship of trust—with his listeners, with his clients, and as a research assistant with me and with my clients. I recently learned that he breached the last of these fiduciary relationships in a particularly troubling fashion.

Here is the story.

A few weeks ago was the 26^th anniversary of Claus Von Bulow's acquittal on charges he attempted to murder his wife by injecting her with insulin. On that anniversary, Scott McCabe wrote in the Washington Examiner that I had won Claus Von Bulow's freedom, even though I believed him to be "supremely guilty." I was flabbergasted, since I had never made any such statement. I immediately dashed off a letter stating the following.

In his article on the anniversary of Claus Von Bulow's acquittal, Scott McCabe purports to quote me—he places my alleged words—as saying that I believe that Claus Von Bulow was "supremely guilty." This is a categorical untruth. I never uttered these words. I never even thought them. I do not believe them to be true. I challenge McCabe to put up or retract his false and defamatory words.

The red-faced author of the article acknowledged that he was wrong in quoting me and that I had never made any such statement. Instead, he attributed the statement to my former research assistant, Jim Cramer. This is what the corrected article said.

On this day, June 10, in 1985, British socialite Claus von Bulow was acquitted on charges he tried to murder his wife at her Rhode Island estate.

Von Bulow's previous conviction for attempted murder of his wife, Sunny von Bulow, was overturned on appeal after he hired Harvard law professor Alan Dershowitz. Dershowitz was assisted by Jim Cramer, who went on to become a host of CNBC's "Mad Money."

Cramer later acknowledged that Claus von Bulow was "supremely guilty." Prosecutors believed von Bulow tried to kill his wife by administering an insulin overdose in 1980, but at the retrial, top-notch defense experts testified that Sunny von Bulow likely killed herself.

I couldn't believe that my former research assistant would ever make such a statement about my former client—and his. It is absolutely unethical for a lawyer to "acknowledge" his client's guilt, when his client adamantly insists on his innocence. I then checked and, sure enough, Cramer had made such a statement in his 2005 book Real Money: Sane Investing in an Insane World. This is what he said.

"At Harvard Law School, I managed in my spare time to work for Alan Dershowitz, helping to get the supremely guilty—at least in my view—Claus Von Bulow acquitted on procedural grounds."

Cramer was, of course, in no position to know whether Von Bulow was supremely innocent, supremely guilty or somewhere in between. I am not sure whether he ever met Von Bulow, and his research on the case was minimal and did not involve issues of guilt or innocence. Moreover, he got the facts of the case completely wrong. Von Bulow was not "acquitted on procedural grounds," as Cramer stated. He was acquitted by a unanimous jury on the ground that he didn't do it. Indeed, several jurors, when questioned, stated that no crime was committed at all, and that the evidence at the second trial proved conclusively that Sunny Von Bulow had died of a self-administered overdose of barbiturates combined with other drugs and food she had ingested. Nor did we win the appeal on "procedural grounds" alone. The primary ground was that Von Bulow had been denied access to evidence—notes taken by Sonny Von Bulow's lawyer—that proved his innocence. Indeed it was this evidence, when presented to the second jury, that contributed to his acquittal.

The reason it is particularly wrong for a defense lawyer—or a research assistant for a defense lawyer—to "acknowledge" a client's guilt (to say nothing about supreme guilt) is that the reader of such a statement is likely to believe that it is based on confidential information or other privileged knowledge that the defense team has but that the general public lacks. Indeed, the word "acknowledged"—the word used by Scott McCabe to characterize Cramer's statement—derives from the word "knowledge." But Cramer, as a minor research assistant, had absolutely no knowledge upon which to base his uninformed opinions that Von Bulow was "supremely guilty." His opinion was based on abysmal ignorance and a desire to make a point about why he hated law school and rarely attended his "bor[ing] classes."

Maybe if Cramer had gone to class and paid attention to his teachers, he would have learned not to breach his fiduciary obligation to clients.