Cramer Names Certain Stocks That Should Be Banned From Trading

According to Cramer, the listing of a stock on an exchange does not guarantee the underlying viability of the company. Cramer said that he can rattle off a few household names that are trading long after their expiration date had crossed.

Jim mentioned that most of such companies continued to trade in the open market since the bourses as well as the brokers were making money on these transactions. He referred to General Motors (GM), American International Group (NYSE: AIG), Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM), saying that all these registered excellent volumes despite being on life support. This was a clear indication of substantial cash going in the pockets of certain people. Jim believes that these equities should be canceled and not allowed to trade.

Cramer gives the example of GM, which entered into bankruptcy and was surviving on the government’s support. The company was still allowed to trade, despite the fact that the old shares were supposed to be canceled and new shares issued. He considered this “the height of irresponsibility,” especially when even the company’s bondholders were going to lose their money.

Similarly, traders were buying and selling shares of FRE and FNM when they were overseen by the government. Cramer rests the blame for letting the public trade in these companies with the regulators, specifically the SEC.

Cramer sadly pointed out that the regulations applicable on Wall Street were far less than those in gambling.

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