The Five Dumbest Things on Wall Street This Week

3. Lemon Tree

Vonage answered Wall Street's call this week.

The New Jersey Internet phone company filed Wednesday for a $250 million initial public offering. No date has been set, but an IPO would give Vonage even greater visibility as it faces off with big companies ranging from AT&T (T Quote) and Comcast (CMCSA Quote) to Verizon (VZ Quote) in the expanding phone-by-computer market.

Vonage, which bills itself as "leading the Internet phone revolution," also said Wednesday that Mike Snyder will take the CEO job from founder and principal shareholder Jeffrey Citron.

The new setup, with Snyder overseeing day-to-day operations, will let chief strategist Citron "get back to working on what I love: the go to market strategy for products, technical vision and core values of the company I founded over five years ago with four engineers and a folding table," Citron said in a Wednesday press release.

Citron's core values are certainly worth considering. He is best known for heading online trading firm Datek during the 1990s bull market. Under his guidance the firm emerged as one of the so-called SOES Bandits that minted money using Nasdaq's Small Order Execution System (SOES). Citron sold Datek years ago, but in 2003 he agreed to pay $22.5 million to settle charges that he illegally manipulated SOES for personal gain. Former Datek trader and shareholder Sheldon Maschler agreed to pay out $29 million to settle similar charges.

Neither man admitted to any wrongdoing, but Vonage concedes in its IPO prospectus that Citron's record hasn't exactly been a selling point. "We believe that some financial institutions and accounting firms have declined to enter into business relationships with us in the past, at least in part because of these matters," Vonage says in its prospectus. "Other institutions and potential business associates may not be able to do business with us because of internal policies that restrict associations with individuals who have entered into SEC and NASD settlements."

Vonage may be the phone company of the future, but obviously some people still have hangups with Citron's past.

Dumb-o-Meter score: 88. "In the past, we projected that we would generate net income during future periods," Vonage's prospectus notes, "but then generated a net loss." Sounds like a good practice.