The Five Dumbest Things on Wall Street This Week: July 13

Gregg Greenberg

5. Bridgepoint Flunks Out

Sorry Bridgepoint Education(:BPI), but even you folks are smart enough to realize how pathetic it looks when your university fails to make the grade.

Shares of the for-profit education provider sank 34% Monday after its Ashford University, which has a campus in Iowa but mostly caters to online students, was denied initial accreditation by the Western Association of Schools and Colleges because it failed to reach the WASC's standards. As a result of the ruling, Ashford may lose its access to federal financial aid, the major source of revenue for the industry.

Come on dudes, how dumb can you be? This is a test you absolutely cannot fail if you want to survive. And let's be honest guys, we're talking about passing a WASC standards board here, not gaining acceptance into the Ivy League.

Apparently Ashford's main problem is not getting students in the door, but keeping them enrolled. More than 240,000 new students matriculated at Ashford over the past five years, according to the WASC's rejection letter, but roughly 128,000 students dropped out over the same period.

And just to be clear, unlike the stars of the University of Kentucky basketball team, Ashford's so-called students are not taking off for the NBA draft. They are simply taking off.

What's worse is that Ashford could lose its remaining accreditation with the Higher Learning Commission of the North Central Association of Colleges and Schools if it doesn't shape up in a hurry.

Ashford felt it needed to gain the WASC's blessing because so much of its online business was coming from western states. However, due to this latest report, Ashford is now in danger of being left without an accreditation to its name.

Well, that's not entirely true.

Even while the education standards boards were busy flunking Bridgepoint for churning and burning its students, our friends on Wall Street were offering the company their seal of approval. And no, we're not talking about Standard & Poor's or Moody's giving the company a triple-A debt rating, since they seem to only reserve that heady grade for toxic mortgage bonds.

Despite the stock's shellacking, Wells Fargo analyst Trace Urdan, reiterated his outperform rating following the news, saying: "Bridgepoint shares reflect concerns regarding Ashford's viability, which we do not question."

Seriously, Trace? Haven't investors already learned their lesson the hard way about this sorry education stock?

4. Adelson's Wacky Wager

Any high-rollers out there want to try and take a billion off Las Vegas Sands (:LVS) Chairman Sheldon Adelson?

Hey, we're not kidding. The casino kingpin offered 1,000-to-1 odds that nobody will be able to substantiate the claims of former Sands China CEO Steve Jacobs that Adelson promoted prostitution at his hotels and violated the Foreign Corrupt Practices Act by putting a government official on his payroll. Jacobs, who is suing Adelson after being fired in 2010 for allegedly breaking company policy, made the accusations in a court memorandum released last month.

"If someone wants to put up a million they can hope to win one billion -- but that won't happen because there isn't a breach of FCPA. Not even a hint," Adelson told Forbes on Monday.

Take that Mitt Romney you piker! We all remember your ten grand bet during the Republican primaries back when Adelson was backing Newt Gingrich instead of you, but even with all your Bain bucks you can't cover Shelly's action, so suck on that.

Of course, Jacobs could place such whale-like wagers should he collect the entire $100 million in damages he is seeking. However, that figure is as ludicrous as his former boss's bet. Even though the suit has prompted the Securities and Exchange Commission to start sniffing around Sands, neither the company nor Adelson have been charged with anything. The only real hit to the gaming giant, as Adelson told Forbes, was an $8 billion reduction in the company's market value because of the bad press.

Or at least that's the number according to Adelson's calculations. Heck, who knows, maybe the prostitution charges added a few dollars per share to the stock price. You know what they say about what happens in Macau right?

Anyway, this whole Sands showdown is almost as absurd as the legal battle over Wynn's (:WYNN) Macau unit. That fight is currently being waged between Steve Wynn and his former partner Kazuo Okada, and it has also attracted government scrutiny as a result of overblown accusations on both sides. And like his fellow casino mogul Steve Wynn, Adelson has no qualms about going all-in to win.

"I'm going through right to the end. It's the only way I can prove unquestionably that everything he said was wrong. If I settle the case then people would say, 'He settled because there was evidence that would come out to show he truly was a criminal and truly had a prostitution strategy.' ... When the time comes I'll extract what's due," said the Sands CEO.

Alas, Adelson will not hedge his bets, but he obviously will make silly new ones to blow this already puffed-up case even further out of proportion.

3. RIM Jettisons Jet

Now Research In Motion (:RIMM) gets rid of the jet? Now? Is it just us or shouldn't that shuttle have sailed by now?

Presiding over his first annual meeting since taking the reins last January, Research In Motion CEO Thorsten Heins told investors Tuesday he plans to turn the troubled company into a "lean, mean, hunting machine" by streamlining its product portfolio ahead of its big Blackberry 10 rollout.

Shares of the company, down over 75% in the past year as a result of the Apple (:AAPL) iPhone's growing dominance, shrank an additional 5% following Heins less-than-inspiring turn at the podium.

Here's what we were wondering upon hearing Heins pledge to slim down and toughen up: How can RIM get any leaner? Hasn't the kitchen sink already been thrown in by now?

Apparently not, says Bloomberg, who first reported that RIM is looking to unload one of its two corporate jets as part of an effort to save $1 billion in annual costs. The company is putting its nine-passenger jet up for sale, seeking some $6 million to $7 million in return.

RIM, by the way, has $2 billion in cash on its balance sheet and no debt. And while that sounds reassuring, the company is on track to burn through a significant chunk of that savings even before its make-or-break gadget hits the shelves early next year. That's right we said 'next year,' or in other words, after the all-important holiday selling season when consumers will likely be as cash-strapped as RIM.

Bloomberg says RIM plans to hang on to its 14-passenger jet just in case the board members -- who were curiously elected with little opposition Tuesday -- need to get the heck out of Waterloo should Heins's plan fail and the pitchforks come out.

Okay. We're kidding. Bloomberg didn't say that. But for a company in crisis that just laid off 5,000 employees, or almost a third of its workforce, it sure seems to us like that jet should have been jettisoned a long time ago.

2. Duke's Dumbness

That CEO coup down at Duke Energy (:DUK) sure did make our heads spin. Heck, even during the Arab Spring the dictators didn't get overthrown that quickly. Unfortunately, this week's deposition about Progress Energy CEO Bill Johnson's unexpected dethroning only made us dizzier.

Duke's new CEO Jim Rogers told the North Carolina Utilities Commission Tuesday that he was shocked when the board informed him -- just minutes after the merger closed on July 2 mind you -- that they were dumping Johnson from the top job at the combined company and installing him instead. The regulatory board, which approves electricity rate increase requests, is investigating whether it was misled after approving the merger on June 29.

If the regulator believes it was a victim of a bait-and-switch scheme by the energy providers, it could put the kibosh on the deal. Rogers, however, denies that was the case, and told the panel that neither he nor Johnson had a clue about the board's trickery.

"Our board did not feel that his style was appropriate or transferrable to leadership of the combined company," said Rogers. "They felt his style was autocratic and discouraged different points of view."

Really? An 'autocratic' CEO? Wow, we never knew such a species existed! We thought all CEOs were warm, fuzzy and democratic in their decision making. Well if that's the case then we can totally understand the board's decision to ditch a tyrant like Johnson before he gained too much power over people's power bills.

Yeah right!

Not that we don't believe you Jim, but why don't we hear it from the meanie's own mouth? Oh, that's right, Johnson's not talking, preferring to let his lawyer do it for him.

"The fact that he is held in the highest regard by his peers in the utility industry and in the North Carolina business community speaks volumes about his leadership and business capabilities," said Johnson's attorney Wade Smith said in a statement.

We disagree Wade. What really speaks volumes is the $45 million in severance that Johnson is being paid to silently slink off.

Or, in other words, Duke's brass is doing exactly what a publicly overseen utility is not supposed to do: It's leaving its investors and customers totally in the dark.

1. PFG's Less Than Best

Somebody find Jon Corzine and tell him he has company.

Futures broker PFGBest imploded Tuesday after the Commodity Futures Trading Commission accused it of misappropriating customer funds for over two years. The regulator alleges that the firm's Peregrine unit and its owner Russell Wasendorf Sr. tapped into thousands of customer accounts to hide a shortfall that may exceed $200 million. Peregrine filed for Chapter 7 bankruptcy Tuesday night.

"The whereabouts of the funds is currently unknown," the CFTC said in a complaint against PFG and Wasendorf, whose suicide attempt Monday night kicked off the crisis.

Yep, even after MF Global went bust under Corzine's watch last autumn, leaving $1.6 billion in unaccounted client cash, it took an embezzler trying to off himself for the authorities to uncover the fraud at the Cedar Falls, Iowa-based broker.

Seriously guys, just because PFGBest is stuck in corn country doesn't mean it's not crooked. One would think that after the MF debacle you folks would have kicked a few tires to make sure other futures firms were on the up and up, but maybe Iowa is fly-over territory for you folks.

To be fair, however, regulators missed Bernie Madoff's scam and he was operating right under their noses on the tony Upper East side of Manhattan, so inept officials and the swindlers they chase clearly know no bounds.

And like Madoff's scam, Wasendorf's swindle should have been easy to spot considering how simple it was in nature. According to Reuters, Wasendorf used a phony post office box to intercept confidential regulatory documents that were mailed by the National Futures Association, his regulator, to what they believed was PFGBest's bank.

Once he had the papers in hand, Wasendorf (1) forged the necessary signatures, (2) manipulated the bank balances, (3) mailed the altered information back to the Chicago-based NFA and (4) went on his merry way.

Simple as pie. Can of corn if you will. That is, until the NFA switched to electronic confirmations and Wasendorf -- who was breathing but incapacitated at last check -- lost his ability to continue his con game. Ah, thank heaven for technology for shining a light on the criminals among us.

That said, the fact that Wasendorf was able to keep his crime going as long as he did using nothing but a P.O. box and a pen will certainly frighten off traders now on the fence about jumping into the futures markets.

The ones not already scared away by Corzine's malfeasance at MF Global that is.

--Written by Gregg Greenberg in New York.