The Five Dumbest Things on Wall Street This Week

2. Citizen Cayne

Jimmy Cayne, Bear Stearns' (BSC Quote) cigar-chomping CEO, may have bitten off more than he can chew.

Bear shares tanked Thursday on a report in The Wall Street Journal that Cayne was busy playing golf and bridge this summer while the firm's hedge funds collapsed. The article, citing people who were there, also said Cayne smoked pot in a hotel men's room in Nashville back in 2004.

Cayne denied that the marijuana incident happened, telling the Journal there's "zero chance" of such a thing. Bear Stearns also emphasized that Cayne isn't inaccessible to the firm when he's out on the golf course, even though he goes without a cell phone or email device.

Still, the exec felt compelled to issue a staffwide memo Thursday urging Bear's workers to ignore the media hubbub. In the memo, Cayne denied doing anything "inappropriate," without being more specific.

Cayne made his comments to staffers on a day in which the stock tumbled as low as $108.15 a share -- putting it within $10 of a low reached in early August. This past summer's selloff came as investors wondered if the firm had enough money to see its way through a mortgage-related credit crunch.

This time around, the threat is less to Bear's solvency than to its reputation. An out-of-touch CEO isn't exactly what investors are looking for in the midst of the biggest credit-market storm in a decade. But Cayne's comments in the memo may not dispel worries about what's going on in Bear's smoke-filled boardroom.

"Don't be distracted by the noise," he wrote in the memo, TheStreet.com's Mark DeCambre reports. "I am certainly not."

It's not the noise we're worried about, Jimmy.

Dumb-o-Meter score: 91. "I stand by the record of success the firm has had over the 14 years that I have had the privilege of leading this great organization," Cayne said.