Jim Cramer’s TheStreet in Trouble With SEC
March 18, 2010
(ChattahBox)—- It seems the SEC is still not satisfied with the financial dealings of Jim Cramer’s financial Web site TheStreet.com. Due to accounting mishaps at a former subsidiary called Promotions.com, federal regulators took a keen interest in the business relationship between the two companies, delaying earnings results for TheStreet, as the investigation continued. But after dumping Promotions.com, the SEC is taking another hard look at Cramer’s accounting issues.
Jim Cramer is a former hedge-fund manager and the off-the-wall CNBC host of “Mad Money.” He was blamed by many, especially Comedy Central’s Jon Stewart, for his complicity in Wall Street’s financial meltdown, with his irresponsible financial reporting. Cramer is the co-founder and Chairman of the Board of TheStreet. And he provides commentary for the site for an annual subscription of $399.95.
According to the report in the NY Post, federal regulators first looked into TheStreet’s dealings with Promotions.com last summer, but appeared satisfied with the the company’s internal probe and backed off:
“Last summer, TheStreet.com announced there were “issues” related to how it had been recording revenue at Promotions.com, the marketing company it acquired in 2007. An internal probe ensued and resulted in several quarters of delayed earnings results for the parent company, frustrating investors.”
Cramer then unloaded Promotions.com for $3.1 million and finally released TheStreet’s delayed earnings reports. But “a person close to the company” says the SEC is now conducting another investigation.
TheStreet’s CEO Daryl Otte, told the paper the company is “is cooperating fully with the investigation.”