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EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Is Japan in Trouble?; SAC Capital: Cramer's Best Blogs

Stocks in this article: EXPESBUXGILDSWKAMZNWY

I don't think that's the case and it wasn't my sense of what the government would do when I interviewed Preet Bharara, the U.S. attorney for the Southern District of New York, last week at the Delivering Alpha conference.

To me, the government is saying, "look, Cohen recruited people who had an edge, typically an illegal edge, people who knew more than you do, people who were meant to find out things you couldn't, including genuine inside information that should not have been traded on, including information about all of those stocks mentioned above and many others."

The document then alleges that Cohen paid these recruits gigantic bonuses if they had the kind of perfect information that makes for fabulous, but illegal, gains, the kinds you always thought someone was getting all along.

The key to this case isn't that Cohen then took the inside information and then bought stocks on it. In fact, it's the opposite. The fraud the government believes happened here involves a process where Cohen was deliberately kept in the dark about why these analysts wanted to buy these stocks. The government alleges that the whole firm was predicated on the notion of "don't ask, don't tell," where Cohen wasn't supposed to ask why the analyst liked or disliked a stock and the analyst wasn't supposed to volunteer it.

If the government's right, then SAC was pretty much a criminal enterprise, an outfit set up to violate the law and keep the top guy insulated, the exact opposite of what's supposed to be happening at an honest firm. That kind of firm should be put out of business. It wrecks the level playing field. It makes us all feel like mugs. Firms, like people, are innocent until proven guilty, so I am anxious to see what Cohen says in response. But the main takeaway here is that you weren't being paranoid about stocks, you weren't wrong to think that someone did indeed have tomorrow's paper today and the government's just not going to let the firm keep what they perceive to be illegal gains, and, for that matter, let it continue to rig the game against you.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.

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