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Five Dumbest Things on Wall Street: July 31

SEC's GM Joyride

Don't worry folks. They may have missed the Madoff and Stanford scandals, but the SEC and FINRA are on the case of the worthless GM stock trades.

Regulators from the Securities and Exchange Commission and the Financial Industry Regulatory Authority are looking into the heavy trading of valueless shares of Motors Liquidation (MTLQQ), according to last week. Motors Liquidation is the new name for the former General Motors, the one that became a repository for the assets and liabilities that remain to be liquidated in bankruptcy court.

The Five Dumbest

It has no relationship with the new GM, which emerged from bankruptcy on July 10. Nevertheless, daytraders have been active in Motors Liquidation stock since it began trading on July 13 at $1.15 a share on the Pink Sheets, an exchange often referred to as the Wild West due to its lax oversight and listing requirements. Almost 20 million shares changed hands on Tuesday between 37 and 45 cents a share.

"We'll be looking at who was buying, who was selling and what the rationale was," said Finra spokeswoman Nancy Condon.

Look, we have no idea why a bunch of buffoons are choosing to traffic in the bankrupt automaker's shares even after being warned multiple times not to. But if that's their idea of a fun time, well, it's a free country, even for fools intent on parting with their money.

What bugs us, however, is why our regulators always seem to get involved after everyone already lost a ton of money.

Dumb-o-meter score: 80 -- No case is too small or too big for the SEC to ignore.

Before joining, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.
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