The Five Dumbest Things on Wall Street This Week

3. Hangover

Tenet's (THC Quote) tribulations in San Diego have left it with a throbbing headache.

The Dallas-based hospital chain agreed to pay $21 million to settle federal kickback charges at its Alvarado Hospital Medical Center. Tenet also agreed to divest itself of Alvarado after it spent three years defending the San Diego hospital in court. Two criminal trials in the case ended in hung juries that led to mistrials.

The feds accused Alvarado of improperly lining doctors' pockets in a bid to boost admissions. Tenet has long denied the allegations, claiming that doctor-relocation payments are commonplace. At times Tenet even took aim at prosecutors.

"I can't get into too many of the details of the Alvarado case, but I can tell you this..." Tenet general counsel Peter Urbanowicz said in a December 2004 conference call, "it is not only unfortunate, but it is wrong that a local federal prosecutor has sought to criminalize physician-relocation agreements, which are a long-established practice used by hospitals around the country to bring needed medical professionals to their communities."

But the company -- which has been eager to put the Alvarado case to rest so it can pursue a global settlement of other federal inquiries -- backed down after the feds threatened the hospital's federal insurance standing.

So Tenet ended up paying the big fine and signing off on an "explanatory statement." In it, Tenet concedes that "certain host physicians had obtained excessive payments." It adds, despite Urbanowicz's strong words in the 2004 call, that "we have never disputed that there are aspects of how the recruitment program operated that are troubling."

"The Alvarado case has been a sobering event for Tenet," Tenet says.

Now there's a staggering admission.

Dumb-o-Meter score: 85. No word on which of the 12 steps Tenet has embraced.

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