Instagram Reversal Doesn’t Appease Everyone

Peter DaSilva for The New York Times

Kevin Systrom, right, co-founder of Instagram, with employees in the company office in San Francisco last year.

SAN FRANCISCO — Facebook may have quelled a full-scale rebellion by quickly dumping the contentious new terms of use for Instagram, its photo-sharing service. But even as the social network furiously backpedaled, some users said Friday they were carrying through on plans to leave.

Eric Piermont/Agence France-Presse — Getty Images

Kevin Systrom, Instagram’s co-founder, said the company would complete its plans, then explain its ad policy.

Ryan Cox, a 29-year-old management consultant at ExactTarget, an Indianapolis-based interactive marketing software company, said he had already moved his photos to Flickr, Yahoo’s photo-sharing app, where he could have better control.

Mr. Cox said the uproar this week over whether Instagram owned its users’ photos was “a wake-up call.”

“It’s my fault,” he continued. “I’m smart enough to know what Instagram had and what they could do — especially the minute Facebook acquired them — but I was a victim of naïve optimism.”

“Naïve optimism” is as good a term as any for the emotion that people feel as they put their private lives onto social networks.

Companies like Google, Twitter, Yelp and Facebook offer themselves as free services for users to store and share their most intimate pictures, secrets, messages and memories. But to flourish over the long term, they need to seek new ways to market the personal data they accumulate. They must constantly push the envelope, hoping users either do not notice or do not care.

So they sell ads against the content of an e-mail, as Google does, or transform a user’s likes into commercial endorsements, as Facebook does, or sell photographs of your adorable 3-year-old, which is what Instagram was accused of planning this week.

“The reality is that companies have always had to make money,” said Miriam H. Wugmeister, chair of Morrison Foerster’s privacy and data security group.

Even as Instagram was pulling back on its changed terms of service on Thursday night, it made clear it was only regrouping. After all, Facebook, as a publicly held corporation, must answer to Wall Street’s quarterly expectations.

“We are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work,” Kevin Systrom, Instagram’s youthful co-founder, wrote on the company’s blog.

Instagram’s actions angered many users who were already incensed over the company’s decision earlier this month to cut off its integration with Twitter, a Facebook rival, making it harder for its users to share their Instagram photos on Twitter.

Users were apprehensive that the new terms of service meant that data on their favorite things would be shared with Facebook and its advertisers. Users also worried that their photos would become advertising.

Instagram is barely two years old but has 100 million users. Last spring, Facebook announced plans to buy it in a deal that was initially valued at $1 billion. The deal was closed in September for a somewhat smaller amount.

For some users, Mr. Systrom’s apology and declaration that “Instagram has no intention of selling your photos, and we never did” was sufficient.

National Geographic, which suspended its account in the middle of the uproar, held a conference call with members of Facebook’s legal and policy teams. Afterward, the magazine, which has 658,000 Instagram followers, said it would resurrect its account.

Also mollified was Noah Kalina, who took wedding photographs earlier this year for Mark Zuckerberg, the founder of Facebook. In a widely circulated post on Twitter, Mr. Kalina said the new terms of service were “a contract no professional or nonprofessional should ever sign.” His advice: “Walk away.”

On Friday, the photographer said he had walked back. “It’s nice to know they listened.”

Kim Kardashian, the most followed person on Instagram, said on Tuesday that she “really loved” the service — note the past tense — and that the new rules were not “fair.” She had yet to update her 17 million Twitter followers on Friday, but since she is pushing her True Reflection fragrance it is a safe bet that she has forgiven and forgotten.

Read More..

Next Move Is Obama’s After Boehner’s Tax Plan Fails

Brendan Hoffman for The New York Times

Speaker John A. Boehner of Ohio leaving a meeting Thursday with fellow House Republicans on talks over the “fiscal cliff.”

WASHINGTON — With House Republicans’ revolt over their leader’s tax plan the evening before, President Obama on Friday faced the challenge of finding a new tax-and-spending solution — perhaps working now with Senate Republicans — to prevent a looming fiscal crisis in January.

Brendan Hoffman for The New York Times

Early in a disappointing day, Speaker John A. Boehner was flanked by senior Democrats.

Yet as the day dawned, officials at the White House remained as incredulous and bewildered as the rest of Washington after Speaker John A. Boehner, short of votes from his Republican majority, was forced to cancel Thursday’s vote on what he called his “Plan B.” It would have extended the soon-to-expire Bush-era tax cuts for all income up to $1 million to avert a tax increase for more than 99 percent of Americans but also, to the anger of the anti-tax conservative mutineers, would have raised the top tax rate for higher income to the level of the Clinton years.

Now Mr. Obama is looking for his own Plan B, just four days before Christmas and 10 days before a deadline for a deal to avoid the tax increases and deep, across-the-board cuts in military and domestic programs scheduled after Dec. 31.

Officials in the administration and Congress, and in both parties, suggested the likeliest route was for Mr. Obama to seek a bipartisan accord with Senator Harry Reid, the Nevada Democrat who is the Senate majority leader, and Senator Mitch McConnell of Kentucky, the Senate Republican minority leader, and hope that it could get through the House under deadline pressure. Last year, when the president and Mr. Boehner were at an impasse over getting Congress to approve the essential increase in the nation’s borrowing limit, it was the wily Mr. McConnell who first suggested the legislative way out of the mess. But Mr. McConnell faces re-election in 2014 and will be very reluctant to engage in any deal-making that could draw him a primary challenge in his conservative state.

Mr. McConnell has given no indication of his next move, but a spokesman, Don Stewart, offered no hint on Friday morning of an immediate helping hand. “I sure hope they have a plan of their own,” said Mr. Stewart, referring to Democrats Mr. Obama, Mr. Reid and the House minority leader, Representative Nancy Pelosi.

A number of Senate Republicans, unlike most party colleagues in the House, say they could support a deficit-reduction plan raising tax rates on high incomes, if Democrats agree to significant reductions in the growth of Medicare and Social Security. But both Republicans and Democrats are being assailed by party allies – groups on the right against any tax increases and on the left against cuts in entitlement-program spending.

If Mr. Obama were to reach some agreement that passes in the Senate, it still must get through the House. That, people in both parties say, could confront Mr. Boehner – who controls the Republican Party’s one lever of power -- with a decision about whether to allow a vote on a measure that presumably could not pass with Republican votes, but would have to be carried over the line with Democrats’ votes.

That prospect in turn gives rise to the question of whether Mr. Boehner can survive the House vote for speaker on Jan. 3, when the new Congress will include fewer Republicans given party losses last November.

Adam Jentleson, spokesman for the Senate Democratic leader, Mr. Reid, said in a statement, “It is now clear that to protect the middle class from the fiscal cliff, Speaker Boehner must allow a bill to pass with a combination of Democratic and Republican votes.”

The House, at Mr. Boehner’s direction, closed down until after Christmas and members dispersed. The president, who once had planned to leave on Friday with his family for its traditional Christmas vacation in Hawaii, would stay at the White House pending “the next moves,” said a senior administration official, who, like most others interviewed, would not be identified given the uncertainty about the next step. “If there is action this weekend, he will be here.”

Read More..

Country singer Tate Stevens wins Fox's 'X Factor'

NEW YORK (AP) — Tate Stevens, who was mentored by music exec L.A. Reid on the second season of "The X Factor," has won the Fox singing competition.

The 37-year-old country singer from Belton, Mo., beat runner-up Carly Rose Sonenclar, a 13-year-old schoolgirl from Westchester, N.Y., and teenage girl group Fifth Harmony on the finale that aired live Thursday night.

Stevens wins a $5 million recording contract.

More than 35 million votes were cast by viewers after Wednesday's performance show.

Besides Reid, judges this season included Demi Lovato, Britney Spears and series creator Simon Cowell.

Thursday's show was also the grand finale for Reid. Earlier this month, he said he wouldn't be returning to "The X Factor" next year. No replacement has been announced.

Read More..

About New York: One Boy’s Death Moves State to Action to Prevent Others

Prompted by the death of a 12-year-old Queens boy in April, New York health officials are poised to make their state the first in the nation to require that hospitals aggressively look for sepsis in patients so treatment can begin sooner. Under the regulations, which are now being drafted, the hospitals will also have to publicly report the results of their efforts.

The action by New York has elated sepsis researchers and experts, including members of a national panel who this month formally recommended that the federal government adopt standards similar to what the state is planning.

Though little known, sepsis, an abnormal and self-destructive immune response to infection or illness, is a leading cause of death in hospitals. It often progresses to severely low blood pressure, shock and organ failure.

Over the last decade, a global consortium of doctors, researchers, hospitals and advocates has developed guidelines on early identification and treatment of sepsis that it says have led to significant drops in mortality rates. But first hints of the problem, like a high pulse rate and fever, often are hard for clinicians to tell apart from routine miseries that go along with the flu or cold.

“First and foremost, they need to suspect sepsis,” Dr. Mitchell M. Levy, a professor at Brown University School of Medicine and a lead author of a paper on the latest sepsis treatment guidelines to be published simultaneously next month in the United States in a journal, Critical Care Medicine, and in Europe in Intensive Care Medicine.

“It’s the most common killer in intensive care units,” Dr. Levy said. “It kills more people than breast cancer, lung cancer and stroke combined.”

If started early enough, the treatment, which includes antibiotics and fluids, can help people escape from the drastic vortex of sepsis, according to findings by researchers working with the Surviving Sepsis Campaign, the global consortium. The tactics led to a reduction of “relative risk mortality by 40 percent,” Dr. Levy said.

Although studies of 30,000 patients show that the guidelines save lives, “the problem is that many hospitals are not adhering to them,” said Dr. Clifford S. Deutschman, director of the sepsis research program at the Perelman School of Medicine at the University of Pennsylvania and the president of the Society of Critical Care Medicine.

About 300 hospitals participate in the study, and the consortium has a goal of having 10,000. “The case is irrefutable: if you take these sepsis measures, and you build a program to help clinicians and hospitals suspect sepsis and identify it early, that will mean more people will survive,” Dr. Levy said.

At a symposium in October, the New York health commissioner, Dr. Nirav R. Shah, said that he would require state hospitals to adopt best practices for early identification and treatment of sepsis. Gov. Andrew M. Cuomo intends to make it a major initiative in 2013, said Josh Vlasto, a spokesman for the governor. “The state is taking unprecedented measures to prevent and effectively treat sepsis in health care facilities across the state and is looking at a wide range of additional measures to better protect patients,” Mr. Vlasto said.

In April, Rory Staunton, a sixth grader from Queens, died of severe septic shock after he became infected, apparently through a cut he suffered while playing basketball. The severity of his illness was not recognized when he was treated in the emergency room at NYU Langone Medical Center. He was sent home with a diagnosis of an ordinary bellyache. Hours later, alarming laboratory results became available that suggested he was critically ill, but neither he nor his family was contacted. For an About New York column in The New York Times, Rory’s parents, Ciaran and Orlaith Staunton, publicly discussed their son’s final days. Their revelations prompted doctors and hospitals across the country to seek new approaches to heading off medical errors.

In addition, Commissioner Shah in New York convened a symposium on sepsis, which included presentations from medical experts and Rory’s parents.

At the end of the meeting, Dr. Shah said that he had listened to all the statistics on the prevalence of the illness, and that one had stuck in his memory: “Twenty-five percent,” he said — the portion of the Staunton family lost to sepsis.

He said he would issue new regulations requiring hospitals to use best practices in identifying and treating sepsis, actions that, he said, he was taking “in honor of Rory Staunton.”

The governor’s spokesman, Mr. Vlasto, said that “the Staunton family’s advocacy has been essential to creating a strong public will for action.”

Dr. Levy said New York’s actions were “bold, pioneering and grounded in good scientific evidence,” adding, “The commissioner has taken the first step even before the federal government.”

Dr. Deutschman said that initiatives like those in New York were needed to overcome resistance among doctors. “You’re talking about a profession that has always prided itself on its autonomy,” he said. “They don’t like to be told that they’re wrong about something.”

The availability of proven therapies should move treatment of sepsis into a new era, experts say, comparing it to how heart attacks were handled not long ago. People arriving in emergency rooms with chest pains were basically put to bed because not much could be done for them, said Dr. Kevin J. Tracey, the president of the Feinstein Institute for Medical Research at North Shore-Long Island Jewish Health System. Dr. Tracey, a neurosurgeon, has made major discoveries about the relationship between the nervous system and the runaway immune responses of sepsis.

If physicians and nurses were trained to watch for sepsis, as they now routinely do for heart attacks, many of its most dire problems could be headed off before they got out of control, he said. The Stauntons have awakened doctors and nurses to the possibility of danger camouflaged as a stomach bug.

“We are with sepsis where we were with heart attack in the early 1980s,” Dr. Tracey said.

“If you don’t think of it as a possibility, this story can happen again and again. This case could change the world.”

E-mail: dwyer@nytimes.com

Twitter: @jimdwyernyt

Read More..

DealBook: Peter Madoff Is Sentenced to 10 Years for His Role in Fraud

8:48 p.m. | Updated

Peter B. Madoff was sentenced on Thursday to 10 years in prison for crimes that helped his brother, Bernard L. Madoff, swindle investors out of billions of dollars in a Ponzi scheme that collapsed four years ago this month.

A lawyer by training, Peter Madoff is the second figure in the scandal to be sentenced. His older brother, Bernard, pleaded guilty in March 2009 and is serving a prison term of 150 years.

Mr. Madoff, in a slate blue suit and striped blue tie, entered the crowded courtroom accompanied only by his lawyers, although many members of his family and friends had written letters of support for him. The 63 character references stood in stark contrast to his brother’s sentencing, when the judge in that case noted that he had not received a single supportive letter.

Still, a handful of victims attended the hearing, including two who spoke emotionally about the financial and psychological hardships they are enduring and urged the judge to impose a life sentence.

In his own brief statement to the judge, Peter Madoff said he was “deeply ashamed” of his conduct and had “tried to atone by pleading guilty.” He added: “I am profoundly sorry that my failures have let so many people down, including my own loved ones and family.”

In June, Peter Madoff, 67, admitted to a range of crimes, including falsifying documents, lying to securities regulators and filing sham tax returns. Prosecutors said that if Peter Madoff had properly done his job as chief compliance officer at Bernard L. Madoff Investment Securities, regulators would likely have detected the fraud years earlier.

Peter Madoff was not charged with knowing about the Ponzi scheme, and insists that he first learned about it only 36 hours before his brother’s arrest.

During the sentencing in Federal District Court in Manhattan, Judge Laura Taylor Swain expressed skepticism about that assertion.

“Peter Madoff’s contention that he did not know that anything was wrong with the investment advisory business is beneath the dignity” of a sophisticated Wall Street executive, Judge Swain said.

“It is also, frankly, not believable,” she added.

Peter Madoff’s lawyer, John R. Wing, has portrayed his client as a loving, charitable family man who was bullied, betrayed and destroyed by the imperious older brother he had idolized all his life. Bernard Madoff was widely viewed as an honorable and successful trader, Mr. Wing wrote in a letter to the court, “and no one believed it more than Peter did. Peter revered him and trusted him implicitly.”

In the geography of the Madoff offices, the money management business run by Bernard Madoff operated from a separate suite two floors below Peter Madoff’s office and the firm’s trading operations. With separate key cards, Bernard Madoff kept the suite off limits, shutting his brother and sons out of the investment advisory business.

In pleading guilty, Peter Madoff has agreed to a 10-year sentence and a forfeiture order of $143 billion. Though a staggering sum that does not bear any relation to what Mr. Madoff could pay, it is tied to the amount of the crime’s proceeds. The government set the amount that high to send a clear signal that it would seize all of his and his family’s assets and distribute them to victims.

On the day of Bernard Madoff’s arrest, his customers thought their accounts contained a total of $64.8 billion, but most of that wealth was fictitious. Madoff’s customers had actual cash losses of about $17.3 billion in the fraud, according to Irving H. Picard, the Madoff bankruptcy trustee.

Mr. Picard has recovered about $9.3 billion and distributed about $3.7 billion of that to eligible victims. An additional $2.35 billion has been seized by federal prosecutors under forfeiture laws and will be distributed separately by the Justice Department.

Peter Madoff worked alongside his brother for 39 years. Though Bernard was the firm’s sole owner, he paid Peter handsomely. The government said that Peter received about $40 million in compensation from 1998 to 2008. That money was put toward his and his wife, Marion’s, lifestyle that included homes in Old Westbury, N.Y., on Long Island, and Palm Beach, Fla., as well as a $4 million apartment on Park Avenue.

In his letter to the judge, Mr. Wing cited the early patterns of the Madoff family as a reason Peter Madoff dutifully obeyed his brother. “Their mother viewed Bernie as the prince, and Peter longed for the love and approval of his brother and family,” Mr. Wing wrote. “Peter had a large build, and Bernie ridiculed him mercilessly, calling him ‘Rollo,’ which hurt Peter deeply.”

But despite that demeaning abuse, “Peter seemed to be blind to his brother’s flaws,” Mr. Wing wrote.

Judge Swain saw it differently. In her view, Peter knew for decades that the Madoff business operation was “a little bit crooked and he was content to go along with that.” She then added, “We all know that a crooked operation is only rarely, if ever, just a little bit crooked.”

Before Thursday’s hearing, both sides filed letters to the judge highlighting factors they hoped she would consider.

The prosecutors stressed the harm done by Peter Madoff’s willful failure to carry out his duties. They cited a letter submitted by Marion Wiesel, the wife of the Nobel Peace Prize-winner Elie Wiesel, whose foundation lost $15.2 million in the fraud. Mrs. Wiesel said the crime that flourished under Peter Madoff’s neglect caused “the immediate and dramatic loss of a lifetime’s worth of work and savings.”

Judge Swain directed Peter Madoff to report to prison on Feb. 6, implicitly granting a request that he not be incarcerated until after his granddaughter’s bat mitzvah in late January.

In her own appeal to the court, the granddaughter wrote, “I would give anything just to have him see me reading from the Torah even if it was only for a second.”

The judge also complied with a request by Mr. Wing that she ask that Peter be assigned to a nearby prison in Otisville, N.Y., permitting regular visits from his family, though that decision ultimately rests with the Bureau of Prisons.

Besides the two brothers, criminal charges have been filed against a dozen other defendants. Bernard Madoff, 74, is serving his sentence at a federal prison near Raleigh, N.C. Peter’s daughter, Shana Madoff Swanson, was a lawyer at the Madoff firm but has not been charged with any crime.

Frank DiPascali, a longtime Madoff employee, pleaded guilty in August 2009 and is awaiting sentencing. Of the remaining defendants, six have pleaded guilty to violations of tax and securities laws that sustained the scheme. The remaining five defendants have denied the government’s charges and their trial is scheduled for October.

Among the 41 victim letters submitted by prosecutors was an unexpected one from Robert Roman, the brother-in-law of Bernard’s wife, Ruth Madoff. Mr. Roman said that although he and his wife lost their life savings in the fraud, he did not want to see Peter imprisoned.

“Our family is supposed to hate him. But — we do not,” Mr. Roman wrote. “Peter in prison is an answer only to those who seek revenge. It is not a solution.”

Toward the end of the hourlong sentencing, as Peter Madoff fought back tears, Judge Swain counseled the defendant that true atonement required that he fully disclose what happened at his brother’s firm.

“Be honest about all that you have done and all that you have seen,” the judge said. “In other words, all that you know.”

A version of this article appeared in print on 12/21/2012, on page B1 of the NewYork edition with the headline: Peter Madoff Sentenced to 10 Years in Fraud Case.

Read More..

DealBook: Upstart Exchange in $8.2 Billion Deal for N.Y.S.E.

8:39 a.m. | Updated The owner of the 220-year-old New York Stock Exchange on Thursday agreed to an $8.2 billion deal that would give control of the longstanding symbol of American capitalism to an upstart competitor.

NYSE Euronext said that it would sell itself to the IntercontinentalExchange for about $33.12 a share in cash and stock. The combined company would have headquarters in both ICE’s home of Atlanta and in New York.

The takeover signals the revival of consolidation in the world of market operators, after a wave of deals dissipated amid concerns over antitrust and nationalist sentiment. ICE had partnered with NYSE Euronext’s main rival, the Nasdaq OMX Group, in an $11 billion hostile bid for the Big Board’s parent, but that offer was blocked by the Justice Department.

And NYSE Euronext had sought to combine with Deutsche Börse, creating a global giant in the trading of derivatives. But that merger was stymied by European antitrust regulators.

Thursday’s deal is expected to run into fewer problems. ICE and NYSE Euronext have little overlap: the former focuses on the trading of commodities like energy products, the latter on stocks and derivatives.

Indeed, while the New York Stock Exchange, with its opening bell and floor traders, has been the public image of a stock market for two centuries, it is NYSE Euronext’s businesses in the over-the-counter trading of derivatives — including the Liffe market in London — that is the main attraction in the merger talks.

As part of the deal, ICE will consider spinning off NYSE Euronext’s European stock market operations.

Shareholders of NYSE Euronext would own about 36 percent of the combined company.

ICE’s chief executive, Jeffrey C. Sprecher, would keep that role in the newly enlarged market operator. NYSE Euronext’s chief, Duncan L. Niederauer, would be president.

Both companies relied on armies of advisers. ICE was advised by Morgan Stanley, BMO Capital Markets, Broadhaven Capital Partners, JPMorgan Chase, Lazard, Société Générale and Wells Fargo. It received legal counsel from Sullivan & Cromwell and Shearman & Sterling.

NYSE Euronext was advised by Perella Weinberg Partners, BNP Paribas, the Blackstone Group, Citigroup, Goldman Sachs and Moelis & Company. It was counseled by Wachtell, Lipton, Rosen & Katz; Slaughter & May; and Stibbe N.V.

Read More..

Study: Solo stars at higher death risk than bands

LONDON (AP) — Rock 'n' roll will never die — but it's a hazardous occupation.

A new study confirms that rock and pop musicians die prematurely more often than the general population, and an early death is twice as likely for solo musicians as for members of bands.

Researchers from Liverpool John Moores University studied 1,489 rock and pop stars who became famous between 1956 and 2009 and found they suffered "higher levels of mortality than demographically matched individuals in the general population."

American stars are more likely to die prematurely than British ones.

Lead researcher Mark Bellis speculates that could be because bands provide peer support at stressful times.

The research was published Thursday in online journal BMJ Open.

Read More..

DealBook: Leniency Denied, UBS Unit Admits Guilt in Rate Case

UBS on Wednesday became the first big global bank in more than two decades to have a subsidiary plead guilty to fraud.

UBS, the Swiss bank, scrambled until the last minute to avoid that fate. A week ago, in a bid for leniency over interest-rate manipulation, the bank’s chairman traveled to Washington to plead his case to the Justice Department, according to people briefed on the matter. Knowing the long odds, the chairman, Axel Weber, asked the criminal division for a lighter punishment.

But the government did not budge. With support from Attorney General Eric H. Holder Jr., the agency’s criminal division decided the bank’s actions were simply too egregious, people briefed on the matter said.

On Wednesday, UBS announced it would plead guilty to one count of felony wire fraud as part of a broader settlement. With federal prosecutors, British, Swiss and American regulators secured about $1.5 billion in fines, more than triple the only other rate-rigging case, against Barclays. The Justice Department also filed criminal charges against two former UBS traders.

The guilty plea and the individual charges provide the Justice Department with a long-awaited case to prove it is taking a hard line against financial wrongdoing.

Since the financial crisis, the government has faced criticism that it has not brought significant criminal actions. The money-laundering case against HSBC, which averted indictment when it agreed instead last week to pay $1.9 billion, raised more concerns that the world’s largest and most interconnected banks were too big to indict.

Libor Explained

With UBS, prosecutors wanted to send a warning.

The Justice Department’s decision stops short of imperiling the broader financial system because it shields UBS’s parent company from losing its charter, among other major repercussions. But by securing a guilty plea against a subsidiary, the department has shown that it is willing to punish severely one of the world’s most powerful banks. It was the first guilty plea from a major financial institution since Drexel Burnham Lambert admitted to six counts of fraud in 1989.

“We are holding those who did wrong accountable,” Lanny A. Breuer, the head of the Justice Department’s criminal division, said at a news conference on Wednesday. “We cannot, and we will not, tolerate misconduct on Wall Street.”

The rate-rigging inquiry, which has ensnared more than a dozen big banks, is focused on major benchmarks like the London interbank offered rate, or Libor. Such rates are central to determining the borrowing rates for trillions of dollars of financial products like corporate loans, mortgages and credit cards.

The fallout from the UBS case is expected to increase pressure on some of the world’s largest financial institutions and spur settlement talks across the banking industry. The Royal Bank of Scotland has said it expects to pay fines before its next earnings statement in February, while American institutions, including JPMorgan Chase, also remain in regulators’ cross hairs.

The UBS case highlighted a pattern of abuse that authorities have uncovered in a multiyear investigation into the rate-setting process. The government complaints laid bare a 10-year scheme, describing how the bank had reported false rates to squeeze out extra profits and deflect concerns about its health during the financial crisis.

“The settlement reflects the magnitude of the wrongdoing and how critical it is that these be honest and reliable,” said Gary S. Gensler, chairman of the Commodity Futures Trading Commission, the American regulator that opened the UBS investigation.

Six months ago, authorities did not seem ready to take an aggressive stance with UBS.

They had just scored their first Libor settlement, a $450 million payout from Barclays. UBS, which had already struck a conditional immunity deal with the Justice Department’s antitrust division, figured its penalty would be similar.

The immunity deal, some UBS executives contended, would protect the bank from criminal charges. Even officials at the Justice Department were skeptical about the prospect of levying large penalties, according to people briefed on the matter.

Then the tone shifted this fall. After examining thousands of e-mails and hours of taped phone calls, the agency’s criminal division concluded that the conduct at the Japanese subsidiary warranted a criminal charge.

Agency officials also cited the bank’s repeated run-ins with authorities. For example, the Swiss bank had agreed in 2009 to pay $780 million to settle charges that it had helped clients avoid taxes.

Not everyone in the Justice Department agreed on the course of action. According to people briefed on the matter, the antitrust unit pushed for less-onerous penalties, citing the cooperation of UBS. With officials split over how to proceed, Mr. Holder cast the deciding vote in favor of securing a guilty plea from the subsidiary.

The move caught UBS off guard. The bank dispatched several lawyers to Washington to negotiate the fine print of the deal, setting up makeshift offices at the Four Seasons hotel in Georgetown.

Mr. Weber joined the lawyers, in a typical last-ditch appeal to the criminal division. Last Wednesday, Mr. Weber and his general counsel explained to the agency how UBS had overhauled its management ranks, bolstered internal controls and generally tried to clean up its act.

Mr. Breuer and other Justice Department officials agreed to consider the bank’s request to abandon the guilty plea, people briefed on the talks said. But hours later, a prosecutor phoned to say the agency was standing firm.

UBS agreed to the guilty plea, conceding that the Japanese unit would otherwise most likely face an indictment. In turn, prosecutors credited the bank for its recent efforts to improve.

“We are pleased that the authorities gave us credit for the important and positive changes we have already made,” Mr. Weber said in a statement.

The Commodity Futures Trading Commission adopted a similarly tough attitude.

Since Thanksgiving, UBS has tried to negotiate lower penalties with the regulator, according to people briefed on the matter. But David Meister, the agency’s enforcement chief, would not back down from $700 million in fines, an agency record.

“Even for a megabank, that amount serves as a direct deterrent,” said Bart Chilton, a commissioner at the regulator.

Authorities’ strict stance stems from the extent of the bank’s actions. The Commodity Futures Trading Commission cited more than 2,000 instances of illegal acts involving dozens of UBS employees across continents.

The most significant wrongdoing took place within the Japanese unit, where traders colluded with other banks and brokerage firms to tinker with yen-denominated Libor and bolster their returns.

In colorful e-mails, instant messages and phone calls, traders tried to influence the rates. “I need you to keep it as low as possible,” one UBS trader said to an employee at another brokerage firm, according to the complaint filed by the Financial Services Authority of Britain.

As the employees carried out the ostensible manipulation, they also celebrated the efforts, with one trader referring to a partner in the scheme as “superman.” “Be a hero today,” he urged, according the complaint.

The Justice Department also took aim at two former UBS traders, Tom Hayes, 33, and Roger Darin, 41, bringing the first criminal charges against individuals connected to the Libor case.

Like other traders at UBS, Mr. Hayes was willing to reward others for their efforts. He trumpeted the work of an outside broker who had helped, writing in a message, “i reckon i owe him a lot more.” Another broker responded that the person was “ok with an annual champagne shipment,” and “a small bonus every now and then.”

As prosecutors ramped up their investigation, Mr. Hayes even tried to dissuade former colleagues from cooperating, the complaint said. “The U.S. Department of Justice, mate, you know,” he said, they are the “dudes who…put people in jail. Why…would you talk to them?”

Mark Scott, Ashley Southall and Julia Werdigier contributed reporting.

A version of this article appeared in print on 12/20/2012, on page A1 of the NewYork edition with the headline: Leniency Denied, UBS Unit Admits Guilt In Rate Case.

Read More..

Kissam Avenue: Small Victories in Hurricane Cleanup on Staten Island

Marisa and Claudio Finco stood in what was once the living room of their two-bedroom house on Kissam Avenue on Staten Island, taking stock of progress since Hurricane Sandy ravaged their neighborhood.

They had thrown out their sodden furniture and belongings, cleared the property of debris, scrubbed the wood floors and begun tearing out the drywall. And just that morning, six weeks after the storm, Mr. Finco had installed a new mailbox out front. The metal box was bolted to a frame he had fashioned from two-by-fours and sunk in a planter full of soil.

“Hey!” Mr. Finco, an Italian immigrant, said with theatrical exuberance, pointing to his handiwork. “The first sign of recovery!” He chuckled and shook his head in a gesture of recognition that a lot of hard work still lay ahead.

The residents of Kissam Avenue are taking their victories, however small, and holding them tight.

Nobody has moved back home yet; so much remains to be done before that can happen. And in the weeks since the storm, shock and grief have given way, ever so slightly, to resignation and, for many, a muscular determination to restore their lives and move on.

But even as residents press forward, they have had to be vigilant against resurgent sadness. They have learned how easily the sense of loss can surge back, like floodwaters, and overwhelm renascent hope.

“I gotta go,” said Franca Costa, whose bungalow at 14 Kissam Avenue was badly flooded, explaining her motivation. “I gotta go home.”

Ms. Costa has been a model of determination on the street. In the first weeks after the storm, her one-story house was constantly filled with volunteers, who helped gut it and prepare it for renovation. She then hired electrical and plumbing crews to get the systems working again.

It has not all been smooth sailing: her first electrician did inadequate work that had to be redone by a second electrician, and her first plumber disappeared without explanation.

But these setbacks have been outweighed by all the help she has received, much of it from strangers, including another Staten Island resident who has taken it upon herself to refurnish Ms. Costa’s house free.

Building inspectors posted a green tag on Ms. Costa’s door last week — permission to reoccupy the house, one of the first to appear on the block — and she hopes to move back in within a couple of weeks.

“My little handyman special is coming back to life,” she said.

Down the street at No. 27, Arun Vejsel recently learned that he would not receive any insurance money because the adjusters determined that flooding was to blame for all of the damage to his one-bedroom house, and he did not have a flood policy. He expects that repairs will cost him about $50,000, on top of the tens of thousands he spent on renovations after he bought the place in 2006.

This infuriates Mr. Vejsel, a Macedonian immigrant, but it has not slowed him down. He and his son, both contractors, rewired the entire house and put in new walls, and they are about to lay new floors and install a bathroom and kitchen. They hope to be done by the end of the month.

Mr. Vejsel has applied for a loan to help pay for the repairs. “If we get it, good,” he said. “If not, what are you going to do?”

Pedro Correa’s house, which was blown off its foundations, still sits in the middle of an adjoining marsh, and the future of his property, 103 Kissam Avenue, remains unclear. He does not think he will rebuild and is helping to marshal support among neighbors for a campaign to have the government buy the properties on Kissam Avenue, and in other hard-hit areas of Staten Island’s Oakwood neighborhood, and integrate them into a wetlands restoration project.

Amid all of this uncertainty, Mr. Correa has found solace in reminding himself that after a harrowing night during the storm, he is still alive, and his children still have a father.

A few days ago, he took his 7-year-old son, also named Pedro, to visit the property for the first time since the storm. In the boy’s imagination, the house had become “the bogeyman,” Mr. Correa said. “He’d drive near the block and bust out in tears.

“I finally said to my wife, ‘I’m going to take him down and see it, let him see the house is gone.’ ”

Father and son walked around the site, still coated with splinters of the house and some of the family’s belongings. The boy found two of his Matchbox cars, embedded in the debris, and took them with him.

“I said, ‘Do you want to look around a little more?’ ” Mr. Correa recalled. “And he said: ‘No. I just want to go home.’ ” Since then, the boy has stopped asking questions about what happened and what is left.

“He could see everything’s gone, and now he knows everything’s gone,” Mr. Correa said. “I think it’s closure for him.”

Read More..

Facebook CEO Mark Zuckerberg donating $500 million in stock to Silicon Valley charity

SAN FRANCISCO – Facebook CEO Mark Zuckerberg said Tuesday he is donating nearly $ 500 million in stock to a Silicon Valley charity with the aim of funding health and education issues.

Zuckerberg donated 18 million Facebook shares, valued at $ 498.8 million based on their Tuesday closing price. The beneficiary is the Silicon Valley Community Foundation, a non-profit that works with donors to allocate their gifts.

This is Zuckerberg’s largest donation to date. He pledged $ 100 million in Facebook stock to Newark, New Jersey, public schools in 2010, before his company went public earlier this year. Later in 2010, he joined Giving Pledge, an effort led by Microsoft Corp. founder Bill Gates and Berkshire Hathaway Inc. CEO Warren Buffett to get the country’s richest people to donate most of their wealth. His wife, Priscilla Chan, joined with him.

In a Facebook post Tuesday, Zuckerberg, 28, said he’s “proud of the work” done by the foundation that his Newark donation launched, called Startup: Education, which has helped open charter schools, high schools and others.

With the latest contribution, he added, “we will look for areas in education and health to focus on next.” He did not give further details on what plans there may be for funds.

“Mark’s generous gift will change lives and inspire others in Silicon Valley and around the globe to give back and make the world a better place,” said Emmett D. Carson, CEO of the foundation.

Social Media News Headlines – Yahoo! News

Title Post: Facebook CEO Mark Zuckerberg donating $500 million in stock to Silicon Valley charity
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment

Read More..