The Five Dumbest Things on Wall Street This Week

2. Cyber Space Cadets

Cyberonics (CYBX Quote) found a way to stimulate some investor interest.

The Houston-based maker of vagus-nerve stimulation devices broke with its checkered past this week. CEO Skip Cummins and financial chief Pamela B. Westbrook resigned Monday after the audit committee found that six years of misdated stock options had led to some $10 million worth of accounting errors.

"We look forward to moving forward and focusing our efforts on enhancing shareholder value," said audit panel chair Guy Jackson, "now that the audit committee has concluded its review and informed the full board of its conclusions."

One reasonable conclusion, given Monday's 12% rally, might be that investors are pleased to be rid of Cummins, a tireless promoter and relentless bully. In one memorable episode, he emailed a reporter at RealMoney.com -- TheStreet.com's subscription-based investment ideas site -- to calmly debate the merits of the company's proposed depression treatment.

"You have only just begun to eat every word of the garbage you've written over the last six months," Cummins told RealMoney's Adam Feuerstein. "I hope [you're] hungry because you will be doing a lot more eating over the next days, weeks and years."

Cummins himself certainly won't be going hungry. In spite of the apparent backdating, the company said Monday it would give Cummins a big box full of cash and stock as a sort of going-away gift. Dissident shareholder Metropolitan Capital blasted the estimated $5 million award as "inexplicable."

But listening to former board member Thomas Duerden, the board's largess seems all too easy to explain. USA Today reports Duerden served on Cyberonics' compensation committee back in 1994 -- the year Tony Coelho, installed Monday as nonexecutive chairman, got a bunch of favorably priced stock options.

"I don't recall ever being a member of the compensation committee," Duerden told the paper. Of another former board member who reportedly got preferential options treatment, Duerden added, "I didn't know Stan Appel from a bar of soap until he joined the board."

No wonder Metropolitan's in a lather.

Dumb-o-Meter score: 90. Cyberonics says it is merely trying "to remain at the forefront of [the] best practices in corporate governance."