The Five Dumbest Things on Wall Street This Week

Ergen Errata Charlie Sorry

1. Charlie Both Dishes It Out and Takes It

Remember last month when we told you how dumb Charlie Ergen was acting?

Well, this week we found someone new to agree with us: Charlie Ergen.

As we at the Five Dumbest Things Research Lab reported a month ago, Ergen behaved egregiously on a late-March conference call with analysts and investors regarding fourth-quarter results for 2003.

For some incomprehensible reason, Ergen -- CEO of EchoStar Communications (DISH Quote), operator of the Dish Network satellite TV service -- refused to answer a simple, commonplace question: What was the price at which EchoStar repurchased its stock in the most recent quarter?

Though this figure is based on publicly available information, and though companies have been answering this question for decades, Ergen grumpily clammed up -- much to the surprise of the respected EchoStar shareholder who asked the question, Wall Street veteran Leon Cooperman.

Odd and inexplicable, we thought. We pressed the company on Ergen's apparent rudeness, but EchoStar remained publicly unapologetic.

Until Thursday. That's when, on the company's first-quarter conference call, an analyst made a joke about how he wasn't going to ask any question about the price at which EchoStar bought back its stock this quarter.

That remark prompted Ergen to say he'd received a "really nice letter" from Cooperman on the subject.

"I made a mistake by not giving that number out," Ergen said. "I think we've disclosed it this time. ... You know, I made a mistake, and he asked a very legitimate question, and he was also kind enough to take the time to articulate that to me by letter, and I appreciated that."

Wow. A public expression of regret by a CEO who isn't at a sentencing hearing.

2. Brooking No Quattrone

Poor Frank Quattrone.

The former Credit Suisse First Boston banker, the onetime financial king of Silicon Valley, was found guilty this week of obstruction of justice and witness-tampering.

It turned out to be deceptively easy for Quattrone to get a shot at jail time: All he had to do was forward an email advising staffers it was "time to clean up those files."

Like others before us, we'll point out the obvious: As smart as Frank Quattrone and Martha Stewart Living Omnimedia (MSO Quote) founder Martha Stewart must be, they never learned the famous lesson inadvertently taught by another smart guy, Richard Nixon: It isn't the crime that gets you in trouble, it's the cover-up.

For some nonobvious thought, we'll turn to journalist/blogger Chris Nolan, who has been covering Quattrone both on his way up and his way down. ("Covering" Quattrone might be the understatement of the year, actually; Nolan broke the story about how Quattrone's investment banking clients enjoyed privileged access to hot initial public offerings, as well as the existence of the infamous "clean up those files" memo.)

Email Franking Privileges Oh Quattrone you don't

So how could Quattrone be found guilty on a foundation as slender as a single email? That evidence wasn't strong enough, evidently, at his first trial on these counts, which ended in a mistrial.

Nolan has an answer, we think.

This time around, the jurors couldn't understand how Quattrone "could make $120 million a year and only kinda know what was going on," writes Nolan. "They're right. That's always been my problem with the defense.

"The Frank Quattrone who sat in court, and the Frank Quattrone who advised some of the smartest people in the country on how to run their companies, weren't the same guy," Nolan explains. "Silicon Valley Frank was a relentless, detailed-oriented guy who often drove his clients crazy. Courtroom Frank was a nice man overwhelmed by email and subordinates' queries and comments.

"Silicon Valley Frank would have fired Courtroom Frank in a heartbeat."

Well said, frankly.