"Doing Business the Dot-Com Way," the cover package in this week's

Fortune

, pretty much explains the underside of the dot-com world the way I see it. As someone who is super critical of the press, I have to tell you that periodically somebody gets it so well, somebody nails the truth and, you think to yourself, man, this is some nasty cesspool I'm swimming in. Reporting can change your mind about things. This package changed mine.

While you'll find excellent pieces in this issue about the shenanigans of revenue and barter recognition in the online world, and the lack of objectivity of analysts in the space, it's the "friends and family" piece by Melanie Warner that deserves the real scrutiny.

Warner is

Fortune's

crackerjack Silicon Valley columnist. (Full disclosure: I am no stranger to her pen. She wrote a critical piece about me saying that maybe I had had my 15 minutes and that I was overexposed to the point of hackdom. The piece was brutal and spot on. It led to a dramatic scaling back of promotional activities for

TheStreet.com

. And lately I'm feeling the same way again, so look out!)

"Friends and family" is a tolerated and intolerable racket that allows people to dole out stock at the deal price to whomever they want. As the deal price is often a low price, friends and family stock is highly prized because it can be flipped at the opening. There is no lockup. If you were lucky enough to get friends and family stock for our IPO and you flipped it into the outrageous opening price that

Knight Trimark

dictated with its overheated opening order, you did just great. Much greater than I did. I haven't sold a share.

Warner focuses on the seamy side, about how companies give friends and family stock to clients and prospective clients to curry favor. How can this stuff be legal?

I was not privy to who got our friends and family stock beyond the shares I got. It's all under the table and hush hush, and, as far as I'm concerned, a license to corrupt otherwise innocent folk.

Me? I took it literally. I gave almost all my "directed" shares to my Dad. What the heck, he and my late Mom made it all happen. Plus, unlike so many others,

he never asked for a share

. I would have given the rest to my sister, who had really had to put up with me through some nasty ups and downs, and who let me live on her Greenwich Village studio floor when I needed to get out of living in my car, but her husband works in the business so she wasn't allowed to get any. Wow, there's a distinction that matters.

Most of the rest went to friends of my wife, because, well, that's how she wanted it, and she has lost the most so far. I wanted to give stock to many of the people who had helped the business, particularly some journalists who had lent a hand, but that, to me, stunk of corruption: me if I gave it, them if they took it. So I didn't. I felt real bad later when I found out that others had done it, but life's too short for kickbacks, which is all these are. Yes, kickbacks.

That's the best word for them.

If I were the

SEC's

Arthur Levitt I would, tomorrow, just ban this practice. It's unnecessary, breeds corruption and should simply be shut down.

Fortune's

got this one right. This license to tarnish shouldn't exist. It's just plain evil. If I get any more stock of any deal, I can tell you what I'm doing with it: I'm going to give it to charity. Or to an organization that will fight the right to have friends and family stock.

Any takers?

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long TheStreet.com, and Cramer was long TheStreet.com. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.