Feds charge former hedge fund manager in big insider-trading case









WASHINGTON -- Federal prosecutors on Tuesday charged a former hedge fund portfolio manager with securities fraud in connection with what they said was the most lucrative insider-trading case ever prosecuted.


In complaints filed in New York, authorities said investment advisors and hedge funds made more than $276 million in illegal profits or avoided losses by trading before the announcement in 2008 of negative results from clinical trials for an Alzheimer's disease drug being developed by Elan Corp. and Wyeth.


Prosecutors charged Mathew Martoma, a former portfolio manager at CR Intrinsic, an unregistered investment adviser, with securities fraud for allegedly illegally using information about the clinical trial results that he obtained from a neurologist at a hospital involved in the testing.





The criminal complaint did not name the neurologist, which it said was a cooperating witness in the case.


The Securities and Exchange Commission filed a a related civil suit Tuesday against Martoma, CR Intrinsic and Dr. Sidney Gilman, a neurology professor at the University of Michigan Medical School. The SEC suit said Gilman was chairman of the safety monitoring committee overseeing the clinical trials of the Alzheimer's drug.


Martoma met Gilman some time between 2006 and 2008 through paid consultations, the SEC complaint says. "During these consultations, Gilman provided Martoma with material, nonpublic information about the ongoing trial," the SEC complaint said.


In mid-July 2008, "Gilman provided Martoma with the actual, detailed results of the clinical trial" before an official announcement on July 29, 2008, the SEC said.


The FBI, SEC and U.S. attorney's office in New York scheduled a 12:30 p.m. EST news conference to discuss the case.


"The charges unsealed today describe cheating coming and going – specifically, insider trading first on the long side, and then on the short side, on a scale that has no historical precedent," said Preet Bharara, U.S. attorney for Manhattan.  "As alleged, by cultivating and corrupting a doctor with access to secret drug data, Mathew Martoma and his hedge fund benefited from what might be the most lucrative inside tip of all time."


Follow Jim Puzzanghera on Twitter and Google+.


Also:


Senate moves insider trading bill to Obama's desk.


Baseball star Eddie Murray settles insider-trading investigation.


Former Goldman Sachs director Rajat Gupta guilty of insider trading.





http://articles.latimes.com/2012/aug/17/business/la-fi-sec-murray-20120818






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Interpublic exits Facebook
















(Reuters) – Interpublic Group of Cos said it sold its remaining investment in Facebook Inc for $ 95 million in cash.


Interpublic said it expects to record a pre-tax gain of $ 94 million. It had recorded a pre-tax gain of $ 132.2 million for the third quarter of last year from the sale of half of its 0.4 percent stake in Facebook.













Interpublic paid less than $ 5 million for the stake in 2006.


Shares of Facebook, which debuted with a market value of more than $ 100 billion in May, have lost nearly half their value since then on concerns about money-making prospects.


“We decided to sell our remaining shares in Facebook as our investment was no longer strategic in nature,” Chief Executive Michael Roth said in a statement.


Interpublic also authorized an increase in its existing share repurchase program to $ 400 million from $ 300 million. The company repurchased shares worth $ 151 million, as of September 30.


Shares of the company were up 1 percent at $ 10 on the New York Stock Exchange on Tuesday.


Facebook shares were marginally up at $ 23.00 on the Nasdaq.


(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das)


Internet News Headlines – Yahoo! News



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Elmo actor Kevin Clash resigns amid sex allegation

NEW YORK (AP) — Elmo puppeteer Kevin Clash has resigned from "Sesame Street" in the wake of an allegation that he had sex with an underage youth.

In its statement Tuesday, Sesame Workshop said "the controversy surrounding Kevin's personal life has become a distraction that none of us want," leading Clash to conclude "that he can no longer be effective in his job."

"This is a sad day for Sesame Street," the company said.

In a statement of his own, Clash said "personal matters have diverted attention away from the important work Sesame Street is doing and I cannot allow it to go on any longer. I am deeply sorry to be leaving and am looking forward to resolving these personal matters privately."

As the announcement was made, a lawsuit was being filed in federal court in New York charging Clash with sexual abuse of a second youth. The lawsuit alleges that Cecil Singleton, then 15 and now an adult, was persuaded by Clash to meet for sexual encounters.

The lawsuit seeks damages in excess of $5 million.

Clash, who had been on "Sesame Street" for 28 years, created the high-pitched voice and child-like persona for Elmo, a furry, red Muppet that became one of the most popular characters on the show and one of the company's most lucrative properties. Sesame Workshop produces "Sesame Street" in New York.

Clash's exit followed a tumultuous week that began on Nov. 12 with a statement from the company that Clash had requested a leave of absence following the charge by a man in his early 20s that he had had a relationship with Clash when he was 16.

Clash denied the charge from that man, who has not been publicly identified, calling it "false and defamatory."

Clash, the 52-year-old divorced father of a grown daughter, acknowledged that he is gay in that statement.

Sesame Workshop, which said it was first contacted by the accuser in June, said it had launched an investigation that included meeting with the accuser twice and meeting with Clash. Its investigation found the charge of underage conduct to be unsubstantiated.

The next day Clash's accuser recanted his charge, describing his sexual relationship with Clash as adult and consensual. Clash responded that he was "relieved that this painful allegation has been put to rest."

In addition to his marquee role as Elmo, Clash had served as the show's senior Muppet coordinator and Muppet captain. He won 23 daytime Emmy awards and one prime-time Emmy.

In 2006, he published an autobiography, "My Life as a Furry Red Monster," and was the subject of the 2011 documentary "Being Elmo: A Puppeteer's Journey."

Though it remained unclear who might take over for Clash performing as Elmo, other "Sesame Street" puppeteers have been trained to serve as his stand-in, Sesame Workshop said.

"Elmo is bigger than any one person," the company said last week.

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Global Update: Meningitis Vaccine Gets Longer Window Without Refrigeration





In what may prove to be a major advance for Africa’s “meningitis belt,” regulatory authorities have decided that a new meningitis vaccine could be stored without refrigeration for up to four days.




The announcement was made last week at a conference in Atlanta of the American Society of Tropical Medicine and Hygiene. While a few days may seem trivial, the hardest part of protecting poor countries is often keeping a vaccine cold while moving it from electrified cities to villages with no power. In antipolio drives, for example, the freezers, generators and fuel needed to make ice for the shoulder bags of vaccinators can cost more than the vaccine.


The new vaccine, MenAfriVac, made in India for 50 cents a dose, was introduced in 2010. In bad years, epidemics during the hot harmattan winds have killed as many as 25,000 Africans and disabled 50,000 more. In Chad this year, vaccination drove down cases to near zero in districts where it was used, while others nearby had serious outbreaks.


Experts decided that the vaccine is safe for four days as long as it stays below 104 degrees.


While temperatures get higher than that in Africa, said Dr. Godwin Enwere, medical director for the Meningitis Vaccine Project, teams normally get the vaccine out of coolers at dawn, drive to villages and finish before the day heats up. Other experts said it should be kept in the shade and monitored with colored paper “dots” that darken after hours in the heat.


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HP reports massive $8.8-billion charge; shares plummet









Hewlett-Packard Co. reported a hefty $8.8-billion charge in its fourth quarter, largely due to serious accounting problems stemming from its 2011 purchase of a British software maker.


The Palo Alto company released its earnings Tuesday and revealed that it had to take a massive charge to align the accounting value of Autonomy Corp., which it bought for $10 billion last year, with its real value.


The writedown, combined with a weak first-quarter outlook for struggling HP, caused shares to plunge in morning trading. The company's stock was down $1.44, or 10.8%, to $11.86 at 9:20 a.m. PST.








"The majority of this impairment charge is linked to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corp. plc that occurred prior to HP's acquisition of Autonomy and the associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long term," HP said in a statement. "The balance of the impairment charge is linked to the recent trading value of HP stock."


Quiz: The week in business   


HP Chief Executive Meg Whitman said the company began to realize something was amiss after Autonomy founder and Chief Executive Mike Lynch left on May 23, according to the Associated Press. A senior Autonomy executive then volunteered information about the accounting improprieties, which led to an internal investigation.


The case has been referred to the U.S. Securities and Exchange Commission and the UK's Serious Fraud Office, the AP said, citing Whitman. HP will also try to recoup some of what it paid for Autonomy through lawsuits.


Autonomy is a software company that helps organizations understand the meaning in information, according to the firm's website: "A pioneer in its industry, Autonomy's unique meaning-based technology is able to make sense of and process unstructured, 'human information,' and draw real business value from that meaning."


Quiz: How much do you know about California's economy?


Autonomy was founded in 1996 and has more than 65,000 customers worldwide.


HP's fourth-quarter revenue was $30 billion, down 7% from the same quarter in 2011 and down 4% when adjusted for the effects of currency. The company reported a loss of $6.9 billion, or $3.49 a share, compared with a profit of $200 million, or 12 cents, a year earlier.


Across business categories, personal systems revenue was down 14% year-over-year; printing revenue declined 5%; services revenue fell 6% and enterprise servers, storage and networking dropped 9%.


Software revenue, however, grew 14% year over year, including the results of Autonomy.


For the first quarter of fiscal 2013, HP estimated earnings per share to be in the range of 34 to 37 cents.


ALSO:


HP to cut 27,000 jobs by 2014


Stocks mostly flat, HP taking a hit


Can CEO Meg Whitman turn around HP?





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Existing-home sales and builder confidence rise









WASHINGTON -- The housing market recovery showed signs it is continuing to strengthen as sales of existing homes increased 2.1% in October from the previous month and a measure of home-builder confidence jumped in November to its highest level since 2006.


Sales of existing homes rose to a seasonally adjusted annual rate of 4.79 million last month, up from a downwardly revised 4.69 million rate in September, that National Assn. of Realtors reported Monday. Sales were up 10.9% in October from a year earlier.


Stronger demand helped push up the median home price nationwide to $178,600 in October, an increase of 11.1% from a year earlier, the group said. It was the eighth-straight month to show a year-over-year increase, the first time that's happened since 2005-2006.





Fewer houses on the market also helped drive price increases. There were 2.14 million existing homes for sale in October, down 1.4% from September. That translates to a 5.4-month supply at the current sales rate, the lowest level since February 2006.


Sales by distressed homeowners still accounted for a large chunk of activity. Foreclosures and short sales made up 24% of October's sales. That was the same level as in September, but down from 28% a year earlier.


Superstorm Sandy had some negative impact on sales, the group said.


The Northeast, which was hit hard by the storm, was the only region to show a decrease in sales in October from the previous month. Sales were down 1.7% there, while they increased 1.8% in the Midwest, 2.1% in the South and 4.4% in the West.


"Home sales continue to trend up and most October transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the country," said Lawrence Yun, chief economist at the Realtors group. 


He expected more of an impact in the Northeast in coming months.


The improving housing market led to a boost in builder confidence, according to a measure released Monday.


The National Assn. of Home Builders/Wells Fargo Housing Market Index rose five points in November to 46 from the previous month. It was the seventh straight monthly increase, lifting the index to its highest level since May 2006, before the crash of the subprime housing market.


The index remained below 50, indicating that builders who view sales conditions as poor still outnumber those who view them as good. But the index is up sharply from its 19 reading a year ago, the home builders group said.


“Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country,” said Barry Rutenberg, a home builder from Gainesville, Fla., and chairman of the builders' group.


“In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today’s favorable prices and interest rates,” he said. 


ALSO:


FHA's reserves fall into the red


California home sales pop in October


Most aid from mortgage settlement in state going to short sales



Follow Jim Puzzanghera on Twitter and Google+.





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MaleSurvivor Conference Examines Sexual Abuse in Sports





It was the summer before high school, and Christopher Gavagan, then 13, was preparing to leave the safe familiarity of the friends he had known during his boyhood. With a plan to excel at ice hockey, he began training on inline skates, moving through his New York City neighborhood, up and down the streets until, he said, “I turned down the wrong street.”




Gavagan, now a filmmaker, was one of eight panelists who participated Friday in a discussion about young athletes who have been sexually assaulted or abused by their coaches. The panel was part of the MaleSurvivor 13th International Conference, held this year at John Jay College of Criminal Justice. The conference brought together men who have been sexually abused, as well as psychologists, social workers, academics and members of the legal community.


A dour procession of stories about sexual misconduct by coaches toward their male charges has come to light in recent months. Jerry Sandusky, a former assistant football coach at Penn State, was sentenced in October to 30 to 60 years in prison on 45 counts of child molesting. Sugar Ray Leonard wrote in his autobiography last year that he was sexually molested by an Olympic boxing coach. The N.H.L. players Theo Fleury and Sheldon Kennedy were sexually abused as teenagers by their hockey coach Graham James.


The prevalence of sexual abuse among all boys 17 and under has been variously estimated to be as low as 5 percent and as high as 16 percent. For some of the millions of children who participate in sports nationwide, and their parents, sexual assault in a sports context has its own dynamic.


“Sports is a place where parents send their boys to learn skills, to learn how to be teammates and how to work together — to make boys stronger and healthier,” said Dr. Howard Fradkin, author of “Joining Forces,” a book about how men can heal from sexual abuse. “It’s the place where we send our boys to grow up. The betrayal that occurs when abuse occurs in sports is damaging because it destroys the whole intent of what they started out to do.”


When Gavagan, now 38, turned down that fateful street, and stepped briefly into the house of a man recommended as a hockey coach by a couple of female acquaintances, what greeted him, he said, was “a young boy’s dream come true.”


The dream Gavagan glimpsed was embodied in the trophy room of the house.


“It was everything I wanted to be right there,” recalled Gavagan, who is working on a feature-length documentary on sexual abuse in youth sports, in which he interviews other sexual-abuse victims and his own attacker, against whom he has never pressed charges. In addition to the shiny relics that seemed to give testimony to the man’s coaching prowess, Gavagan said, the trophy room had pictures of hockey teams the man had coached and workout equipment — the physical tools promising the chance to get bigger and stronger.


“To a skinny 13-year-old, it was like winning the lottery,” Gavagan said.


Christopher Anderson, the executive director of MaleSurvivor, said sexual abuse — basically nonconsensual touching or sexual language — is devastating under any circumstance, but coach and player often have a special relationship.


“Especially as you progress higher and higher, the coach can become just as important in some ways to an athlete as the relationship with his parents might have,” Anderson said. “In some cases, it’s a substitute for parents.”


He added: “There’s also a fundamentally different power dynamic. When you’re a young star, the coach can literally make or break your career as an athlete.”


But caution has to extend beyond coaches who guide future Olympians, Gavagan said, noting that his coach was not of that caliber.


“The entire grooming process was so subtle,” Gavagan said. “It’s not like when I first went into his house that he tried to grope me.”


First, Gavagan said, the coach said it was all right to curse in that house. On another visit it was fine to have a beer, which led on another day to Playboy magazine and on subsequent days to harder pornography and harder liquor. It was six months before the coach laid an explicitly sexual hand on him, Gavagan said.


“I didn’t feel like a sudden red line had been crossed — the line had been blurred,” Gavagan said, explaining that he avoided his parents when he returned home with liquor on his breath by telling them he was exhausted and going straight to his room. (Unlike many sexual-abuse victims, Gavagan said his parents, with whom the coach had ingratiated himself, were supportive of their son, and his was a loving family. He said that if he had approached them about the coach, they would have listened.)


Another aspect of sexual abuse in sports is the environment, which emphasizes a kind of macho ethic.


“What is most different about abuse is the sports culture itself,” Fradkin said. “It is a culture that promotes teamwork and teaches boys to shrug it off. When a boy or man is abused, he risks being thrown off the team if he should speak the truth because he’ll be seen as being disloyal — and weak.”


At 17, after four years with his coach, Gavagan said he “aged out” of his coach’s target age.


“At the time I had no idea of how it would impact my life, but the unhealthy lessons about relations, trust and the truth set a time bomb that would detonate my relationships for the next 10 years,” Gavagan said.


As a word of caution, Anderson said the lesson for parents should not be that sports are dangerous.


“It should be that there are sometimes dangerous people who gravitate to sporting organizations and our safeguards aren’t good enough yet to adequately protect our children,” he said. “That doesn’t mean that we should be pulling our kids from soccer and baseball and basketball. What it means is that parents need to be vigilant.”


He added: “They need to be proactive with athletic organizations to make sure that policies are in place — such as doing criminal background checks on staff and having a procedure where young athletes can complain about inappropriate behavior — that make sure children are protected.”


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More small businesses to give parties, bonuses, time off for holidays









Small-business owners are increasingly feeling the holiday cheer, with more giving bonuses and throwing parties than in recent years, according to a new report.


A survey of 501 bosses managing fewer than 100 employees each found that, on average, they plan to give out a 9% paycheck boost to their workers this year. Some 35% of small-business owners will give bonuses, up from 29% last year, according to the poll from American Express.


And four in 10 supervisors said they’ll throw a holiday party, up from 35% in 2011. But they’ll cut back slightly on fete costs, spending $959 on average instead of $1,029. Half of companies will give their workers time off for the holidays, an improvement on 2011.





More than half of bosses will give their clients and customers gifts, up from 43% last year. Their Santa budgets will average out to $958 each, compared with $827 last year and $740 the year before.


Scrooging is falling out of favor: A third of small-business owners last year said they wouldn’t do anything special for the holidays, a portion that this year is closer to two in 10.


But don’t look to small businesses to extend the goodwill to shoppers. Just 19% said they will offer discounts or other deals to boost holiday sales, down 24% from last year and far below the 41% of retailers who said they would do the same.


ALSO:


Companies still not in the mood for big holiday parties


Fly on Thanksgiving Day to save money and avoid delays


Scam watch: Avoid getting conned during the holiday season





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A young shooting victim wrestles with his fears









After the nightmares started, Davien Graham avoided his bicycle.


In his dreams, he pedaled his silver BMX bike through his neighborhood, heard gunfire and died.


If I stay off my bike, I'll be safe, he thought.





He placed it in a backyard shed, where it sat for months. But Jan. 12, 2008, dawned so spectacular that Davien decided to risk it.


He ate Cap'n Crunch Berries cereal, grabbed the bike and rode a half-mile west to Calvary Grace, a Southern Baptist church that was his haven.


Davien lived with an unemployed aunt and uncle, a former Crip, and five other kids in a cramped four-bedroom house in Monrovia, about 20 miles east of Los Angeles.


Yet as a 16-year-old junior at Monrovia High School, Davien earned A's and B's, played JV football and volunteered with the video club. He cleaned the church on Saturdays for minimum wage.


If I live right, God will protect me.


That afternoon, sweaty from cleaning, Davien reached for his wallet to buy a snack — only to realize he had forgotten it at home.


After returning to his house, he caught his reflection in the front window. He was 6 feet 2 and wiry. His skinny chest was beginning to broaden. He was trying to add weight to his 160-pound frame in time for varsity football tryouts.


He showered, told his aunt he would be right back and again jumped on his bike, size-14 Nike Jordans churning, heading for a convenience store near the church.


At the store, he bought Arizona fruit punch and lime chili Lay's potato chips. He recognized a kindergarten-age Latino boy and bought him Twinkies.


Davien pedaled down the empty sidewalk along Peck Road. He could hear kids playing basketball nearby. As he neared the church, a car passed, going in the opposite direction. He barely noticed.


He heard car tires crunching on asphalt behind him. He glanced back, expecting a friend.


Instead he heard: "Hey, fool."


The gun was gray. It had a slide. Davien recognized that much from watching the Military Channel.


Behind the barrel, he saw forearms braced to fire and the face of a Latino man, a former classmate.


The gunman shouted, "Dirt Rock!," cursing a local black gang, the Duroc Crips.


Davien's mind raced: Don't panic. Watch the barrel. Duck.


Suddenly, he was falling. Then he was on the ground, looking up at the church steeple and the cross.





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Summary: A look at the 4 new Kindle Fire models
















Amazon.com Inc. started shipping a large-screen version of its Kindle Fire tablet computer on Thursday, ahead of schedule. Here is a look at the new Fires announced in September:


— Kindle Fire, with 7-inch screen, 1024 by 600 pixels. $ 159, with 8 gigabytes of storage. Weighs 14.1 ounces. Battery life of 8.5 hours. Started shipping Sept. 14.













Kindle Fire HD, with 7-inch screen, 1280 by 800 pixels. $ 199 with 16 GB of storage or $ 249 with 32 GB of storage. Weighs 13.9 ounces. Battery life of 11 hours. Started shipping Sept. 14.


— Kindle Fire HD 8.9″, with 8.9-inch screen, 1920 by 1200 pixels. $ 299 with 16 GB of storage or $ 369 with 32 GB of storage. Weighs 20 ounces. Battery life of 10 hours. Started shipping Thursday.


— Kindle Fire HD 8.9″ 4G LTE Wireless, with 8.9-inch screen, 1920 by 1200 pixels. $ 499 with 32 GB of storage or $ 599 with 64 GB of storage. Can connect to AT&T Inc.‘s 4G LTE wireless network. Weighs 20 ounces. Battery life of 10 hours. Will start shipping Tuesday.


Gadgets News Headlines – Yahoo! News



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