NEW YORK ( TheStreet) -- Sony's ( SNE) massive security breach was considered the dumbest thing on Wall Street this week by readers of TheStreet.
As of late Friday, about 34% of the 237 readers that took our poll thought that Sony's Swiss-cheese security system was particularly dumb. This week, it was revealed that hackers gained access to yet another 24.6 million accounts, at least 12,700 non-U.S. credit or debit card numbers and expiration dates (although not the 3-digit security code on the back of credit cards), and about 10,700 direct debit records of certain customers in Austria, Germany, Netherlands and Spain. The latest reported breach took place in the Sony Online Entertainment division -- which makes multiplayer online games including Free Realms and DC Universe Online -- and was directly tied to the infiltration of Sony's online PlayStation Network that the company copped to just a week ago and put roughly 77 million users' account information in jeopardy. Sony hasn't exactly given PlayStation 3 users much confidence in the company's ability to keep information safe anytime soon. In fact, security expert Dr. Gene Spafford of Purdue University testified against Sony during a meeting of the House Subcommittee on Commerce, Manufacturing and Trade on Wednesday. He explained that not only was Sony using outdated versions of Apache Web server software that were "unpatched and had no firewall installed," but that the problem was "reported in an open forum monitored by Sony employees" two to three months before the security breaches. Sony claims the breach and the service outages that followed have cost the company upwards of $20 million. Gamers who've spent the last week calling credit agencies, cutting up credit cards and changing passwords surely don't feel much sympathy, especially in light of Sony's lax security.
With approximately 28% of votes, CNBC featuring First Solar ( FSLR) shorter Jim Chanos on the day the company reported its quarterly results was voted the second dumbest thing on Wall Street this week. On Tuesday, CNBC's Maria Bartiromo introduced Chanos by referring to the famed investor as being "long known for his accurate predictions including the collapse of Enron" and said she was anxious to hear Chanos' "viewpoint and investment savvy." Of course, Chanos was ostensibly appearing to discuss China -- as if the world doesn't know how he feels about China by this point -- and even though the world also knows how Chanos feels about First Solar, CNBC seemed to go out of its way to provide a platform for Chanos' First Solar case for the second time this month, and didn't even have its facts straight. After First Solar reported its results, Bartiromo referenced Chanos' short position in First Solar, and told viewers the results came in "weaker than expected." Turns out, First Solar's first-quarter numbers easily beat the average analyst expectation on the top and bottom line. Still Chanos restated the case that he made on CNBC on April 14, saying that First Solar insiders are selling, executives are leaving, and added a vague comment about "accounting issues" that he had with First Solar. On cue, First Solar's stock went down right after the earnings report, right as Bartiromo and Chanos were speaking. A few solar investors weighed in on the issue to TheStreet in written comments: "Bartiromo and Chanos did a real hatchet job on FSLR, and misstated the facts," said one reader. Another wrote, "CNBC should be held accountable for their blatant lies.... To have a guy come on and comment on FSLR who they know is short and then FLAT out LIE about them missing when they beat is disgusting to say the least." That might not be "saying the least," and to be fair, the case can be made that giving a investor who is short on a particular stock airtime as that company reports is no different than allowing a Wall Street analyst who has a buy rating on a stock to come on and discuss that company under similar conditions. There is a distinction to be made however. An analyst isn't allowed to own shares in the stock he is covering, while Chanos is specifically going to profit from his First Solar trade only if the stock goes down.
Almost 24% of voters thought the judge's ruling in the Boeing ( BAF) case was pretty dumb. Back in 2008, two Boeing employees, Matthew Neumann and Nicholas Tides, were fired after leaking concerns about a software security flaw to the Seattle Post-Intelligencer. On Tuesday, a San Francisco-based federal appeals court ruled that the company was within its rights to fire them, concluding that they were not protected under the Sarbanes-Oxley Act. Sarbanes-Oxley, as written, only offers protections for those who sound their concerns internally or to "authorities," such as elected officials or government regulators. The "media" is not explicitly included. However, the ruling brushes aside another significant statute, the Whistleblower Protection Act, and ignores a catch-all allowance that allows snitching in matters of gross malfeasance, fraud or threats to public safety. According to the tipsters, a security hole in Boeing's accounting infrastructure has placed the company in consistent violation of legal requirements since 2004. Defending itself, Boeing has not disputed that the problem exists -- just that the two employees didn't squeal to the right folks. They were apparently appalled that the duo felt they had to resort to tipping off the media after years of inaction on the company's part. Boeing stresses that the security hole was related only to its accounting infrastructure, but any security hole can be exploited for broader hazard. Hackers and corporate spies rarely wage an assault in the most complex aspect of a system; they find the weakest link and branch out from there. Were it not for the brave folks who spilled the beans on its epic fraud to the media, many more people would have lost even more money. The Fourth Estate saved the day, empowered in its mission by whistleblowers.
Close to 7% of voters thought that Citigroup's ( C) apparent trouble with outside debt collectors was pretty dumb. The company often touts its growth potential in emerging markets, but Citigroup has had a few inernational problems lately. In fact, Citi was temporarily banned from helping rich people manage their money in Indonesia, since one of the bank's employees was arrested under suspicion of managing a few million dollars' worth of client money right into her own hands. Then there is the case of Irzen Octa, who died shortly after visiting a Citigroup branch, according to several news reports. The police are investigating, though Budi Irawan, a local police official told the Jakarta Post that Octa had been attacked by debt collectors after he protested a credit card bill from Citi that was far higher than he had been expecting. Indonesia's central bank told Citigroup to stop recruiting new credit card customers while the police investigate, according to a report in The Wall Street Journal. Meanwhile, Citigroup has hired more than 1,400 people and will be now be doing its own debt collecting in Indonesia, The Journal reported, though it appears this was done to comply with regulatory guidelines, rather than out of any internal sense that rent-a-thugs might not be the way to go. Citigroup has had trouble with outside debt collectors before, according to The Journal, which cites a Citigroup customer in Mumbai in 1999 who said outsourced debt collectors held a knife to his throat and threatened to kill him. A spokeswoman for the bank told the newspaper Citigroup has "appropriate controls in place," even though, according to the report, she "couldn't say how many outside agents it previously used or whether its use of outsourced collectors is common practice in other countries." Cisco's ( CSCO) attempt to get its business back on track was considered dumb by about 7% of voters. The company, after wrestling with execution problems and slumping shares, announced another round of restructuring Thursday. Following several quarters of weak sales and guidance, the networking giant is desperate to placate investors. "Cisco has driven transformational change before, and we are again transitioning to the next stage of the company's evolution," said Cisco CEO John Chambers, in the statement. "It's time to simplify the way we execute our strategy, and today's announcement is a key step forward." Cisco said that as a part of its new streamlining and reorganization, it plans to organize its worldwide field operations into three geographic regions; Americas, EMEA and Asia Pacific/Japan/Greater China. The company aims to re-organize its services business around key customer segments, and become more closely aligned with its field operations segment, as well as reshuffle its engineering division, creating a dedicated emerging business group, led by senior vice president Marthin De Beer. This group will focus on "select early-phase businesses" and will integrate Cisco's Medianet video technology across the company. And, in a clear nod to critics who have slammed Cisco's agility, the company is reducing the number of internal decision-making "councils" from nine to three, with specific focus on enterprise, service providers and emerging countries. Last month, Chambers admitted that the networking behemoth had disappointed investors, and vowed to turn the company around. Two consecutive quarters of weak performance had raised big questions about Cisco's long-term strategy, and the company's stock is down almost 34% over the last 12 months. Since then, Chambers has promised to throw resources at the company's video efforts and started to remold the firm's problematic consumer business. -- Written by Theresa McCabe in Boston. >To contact the writer of this article, click here: Theresa McCabe. >To follow the writer on Twitter, go to @TheresaMcCabe. >To submit a news tip, send an email to: email@example.com.