Five Dumbest Things on Wall Street: Dec. 19

National Lampoon's Not-So-Funny Business

The CEO of National Lampoon(NLN Quote) may soon be taking a long, state-paid Vacation.

Federal prosecutors on Monday charged National Lampoon Chief Daniel Laikin and two others with conspiracy and securities fraud for allegedly manipulating the stock price of the company.

Shares of National Lampoon, the company that owns the rights to the "Vacation" and "Animal House" movies, last traded at 73 cents before being halted for 10 days. The company sports a miniscule market cap of $6.9 million.

The U.S. Attorney's office in Philadelphia and the SEC say Laikin paid people to buy and sell the company's stock in order to create the illusion of market interest, a practice known as painting the tape. The stock purchases were timed to coincide with company news releases, according to prosecutors, to make the purchases seem more legitimate.

Prosecutors said Laikin, who owned a majority of shares, allegedly paid thousands of dollars to stock promoters who in turn attempted to push the shares from $2 to $5 between March and June of this year. Shares bounced between $1.50 and $2 during the period in question. The 52-week high for the stock of $2.40 was reached in December 2007.

National Lampoon spokeswoman Marcy Goot declined to comment. U.S. Attorney Laurie Magid, however, told reporters at a news conference, "To borrow a line from 'Animal House,' the rules lost."

Those poor Lampooners. Only a week ago the company proudly announced the acquisition of JerkassClothing.com, a company specializing in youth and college oriented T-shirts. Now it sounds like perfect prison-wear. If Laikin and friends are found guilty, they certainly won't be receiving double secret probation.

Dumb-o-meter score: 85 -- The Animal House of cards has come crashing down.