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TheStreet Open House

The 10 Dumbest Things on Wall Street This Summer

Stocks in this article: JPM JCP CHK GRPN C MS KCG HPQ BCS

7. Chesapeake's Collusion -- (Originally published June 29, 2012)

Thank you Chesapeake (CHK - Get Report)! We were worried that the summer doldrums had set in early this year and we would be unable to find enough Dumbest-worthy material to fill our weekly rundown. And then, like the team-player you are, you came to our rescue with this latest headline about colluding with Encana (ECA) to hold down land prices.

Oh Aubrey McClendon, how could we ever repay you?

Wait! Don't answer that Aubrey. It's a rhetorical question. We're just joshing you.

That said, we certainly aren't kidding about the allegations made in Monday's Reuters report that you and your Canadian rival schemed in 2010 to avoid bidding against each other in a state auction and in at least nine prospective deals with private land owners.

And apparently your investors don't think it's a joke either since news of the potential price-fixing sent Chesapeake shares down 8.5% Monday, making the scandal-ridden company the market's worst performer. As for Chesapeake's partner in the discussions (We told you Chesapeake is a team player), Encana's stock closed down 4% on an otherwise green day for stocks.

To cut to the chase -- and good old Aubrey sure is getting chased a lot these days -- the most damning email came on June 16, 2010, when McClendon told a Chesapeake deputy that it was time "to smoke a peace pipe" with Encana "if we are bidding each other up."

Forget the peace pipe Aubrey you moron. That's a smoking gun if the government decides to initiate a collusion investigation!

Almost equally idiotic was the Chesapeake vice president who answered Aubrey by saying he had contacted Encana "to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim."

To which his boss responded: "Thanks."

No, thank you Aubrey. Like your bosom buddies at Encana, we know we can count on you when we are in desperate need of a very dumb idea.

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