Well: Good and Bad, the Little Things Add Up in Fitness

Phys Ed

Gretchen Reynolds on the science of fitness.

The past year in fitness has been alternately inspiring, vexing and diverting, as my revisiting of all of the Phys Ed columns published in 2012 makes clear. Taken as a whole, the latest exercise-related science tells us that the right types and amounts of exercise will almost certainly lengthen your life, strengthen your brain, affect your waistline and even clear debris from inside your body’s cells. But too much exercise, other 2012 science intimates, might have undesirable effects on your heart, while popping painkillers, donning stilettos and sitting and reading this column likewise have their costs.

With New Year’s exercise resolutions still fresh and hopefully unbroken on this, day two of 2013, it now seems like the perfect time to review these and other lessons of the past year in fitness science.

First, since I am habitually both overscheduled and indolent, I was delighted to report, as I did in June, that the “sweet sport” for health benefits seems to come from jogging or moderately working out for only a brief period a few times a week.

Specifically, an encouraging 2012 study of 52,656 American adults found that those who ran 1 to 20 miles per week at an average pace of about 10 or 11 minutes per mile — my leisurely jogging speed, in fact — lived longer, on average, than sedentary adults. They also lived longer than the group (admittedly small) who ran more than 20 miles per week.

“These data certainly support the idea that more running is not needed to produce extra health and mortality benefits,” Dr. Carl J. Lavie, a cardiologist in New Orleans and co-author of the study told me. “If anything,” he said, “it appears that less running is associated with the best protection from mortality risk.”

Similarly, in a study from Denmark that I wrote about in September, a group of pudgy young men lost more weight after 13 weeks of exercising moderately for about 30 minutes several times a week than a separate group who worked out twice as much.

The men who exercised the most, the study authors discovered, also subsequently ate more than the moderate exercisers.

Even more striking, however, the vigorous exercisers subsequently sat around more each day than did the men who had exercised less, motion sensors worn by all of the volunteers showed.

“They were fatigued,” said Mads Rosenkilde, a Ph.D. candidate at the University of Copenhagen and the study’s co-author.

Meanwhile, the men who had worked out for only about 30 minutes seemed to be energized by their new routines. They stood up, walked, stretched and even bounced in place more than they once had. “It looks like they were taking the stairs now, not the elevators, and just moving around more,” Mr. Rosenkilde said. “It was little things, but they add up.”

And that idea was, in fact, perhaps the most dominant exercise-science theme of 2012: that little things add up, with both positive and pernicious effects. Another of my favorite studies of 2012 found that a mere 10 minutes of daily physical activity increased life spans in adults by almost two years, even if the adults remained significantly overweight.

But the inverse of that finding proved to be equally true: not fitting periods of activity into a person’s daily life also affected life span. Perhaps the most chilling sentence that I wrote all year reported that, according to a large study of Western adults, “Every single hour of television watched after the age of 25 reduces the viewer’s life expectancy by 21.8 minutes.”

I am watching much less television these days.

But not all of the new fitness science I covered this year was quite so sobering or, to be honest, consequential. Some of the more practical studies simply validated common sense, including reports that to succeed in ball sports, keep your eye on the ball; during hot-weather exercise, pour cold water over your head; and, finally, on the day before a marathon, eat a lot.

But when I think about the science that has most affected how I plan my life, I return again and again to those studies showing that physical activity alters how long and how well we live. My days of heedless youth are behind me. So I won’t soon forget the study I wrote about in September detailing how moderate, frequent physical activity in midlife can delay the onset of illness and frailty in old age. Exercise won’t prevent you from aging, of course. Only death does that. But this study and others from this year underscore that staying active, even in moderate doses, dramatically improves how your aging body feels and responds.

Aging also inspired my favorite reader comment of 2012, which was posted in response to a research scientist’s name. “‘Dr. Head,’” the reader wrote. “That shall be the name of my all-senior-citizen metal band,” which, if its members gyrate and vigorously bound about like Mick Jagger on his recent tour, should ensure themselves decades in which to robustly perform.

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Case Study: A Start-Up’s Dilemma: A Lack of Capital, or Lack of Control





Eatwhatever is a two-step, breath-freshening product created four years ago by a then-26-year-old Australian expatriate named Jacqui Rosshandler. Starting with $60,000 in capital, contracting out production and working solo from her New York apartment, Ms. Rosshandler and her company, Jacquii L.L.C., managed to grab a promising but tenuous toehold in the billion-dollar breath-freshening industry.




THE CHALLENGE Running low on inventory early in 2011 and lacking the money for another production run to fulfill orders to her Web site and restock her Manhattan retail accounts, Ms. Rosshandler feared she would have to shut down her start-up. She had been rejected by bank after bank (some citing her lack of American citizenship). She had decided against asking friends for money — or her parents, who had already helped at the outset — and she had come up dry with venture capitalists. As her prospects dimmed, she started interviewing for jobs.


THE BACKGROUND Ms. Rosshandler was working at a Manhattan events and interior design company when, on New Year’s Day in 2007, she decided that like her father, a successful plastics industry entrepreneur in Australia, she would prefer to work for herself. Her idea: to improve upon a South African product called Odor-Go that she had seen in her native country but nowhere in the United States. Her product would have gel caps to be swallowed, similar to Odor-Go, but it would package them with follow-up mints to be sucked. Plus, her breath-freshening duo would be gluten-free and vegan. “I wanted to be able to take my own product,” she said, explaining that most gel caps are made using meat byproducts. She filed to trademark the name Eatwhatever.


It was her understanding that the way to vanquish bad breath caused by oniony, garlicky foods was to go to the source of the problem, the stomach. Having studied acting and law, not chemistry, Ms. Rosshandler left the product formulation to a contract manufacturer. “Parsley has been used for generations to freshen breath,” she said. “People know, just from everyday life, that freshening the mouth only — especially after consuming pungent foods — doesn’t get rid of the smell that comes from within the stomach. We found that the combination of concentrated organic peppermint and parsley oils, when dissolved in the stomach, provides this fresh feeling from within. Your breath actually smells good, from deep inside, not just superficially from the mouth.”


She hired a package designer and prominently displayed the tagline: 2 Steps to Kissable Breath. Also on the packaging was a cheeky instructional mash-up of the two operative steps (swallow and suck). She was, after all, seeking a young demographic. “I had no idea what I was doing,” said Ms. Rosshandler, laughing.


She began her sales efforts in 2008 by walking into the C.O. Bigelow flagship apothecary store in Manhattan and asking, “Who does the buying here?” She left with a sale. A month or so after Eatwhatever’s debut, a friend in public relations helped her get a mention on DailyCandy’s main page. That brought $20,000 worth of orders to her Web site in 12 hours and generated plenty of buzz. With the help of a distributor, Eatwhatever soon cracked New York retail outlets like Ricky’s, Joe Coffee and Zitomer, a specialty department store; Ms. Rosshandler even opened retail beachheads in Paris and Sydney.


But lacking contracts with mass merchants, sales volume remained low. The company’s annual revenue failed to top $40,000 in 2008, 2009 and 2010. Squeezed for cash, Ms. Rosshandler could not pay for marketing or, eventually, even for her next production run. That is when she interviewed for a job selling high-fashion hair accessories.


THE OPTIONS And then in rode her white knight. Or was he? She had networked her way to Arthur T. Shorin, an investor and former chief executive of the Topps Company, a confectionary company known for its baseball trading cards, who promised candy industry expertise and contacts and an immediate infusion of $250,000, with more to come if justified. But Mr. Shorin’s nonnegotiable terms were stark. In return, he wanted 75 percent of the enterprise. Ms. Rosshandler would retain 25 percent with the opportunity to earn back another 15 percent should certain benchmarks be met. The offer included a salaried job in Mr. Shorin’s New York company, Artuitive, an incubator for start-ups.


Friends advised Ms. Rosshandler against the deal, citing the tough terms, even if she were to rebuild her stake to 40 percent. But Mr. Shorin had impressed her in their exploratory meetings, and she asked herself this question: Isn’t 25 percent of something better than 100 percent of nothing?


WHAT OTHERS SAY Steve Schuster, founder of Schuster Products in Milwaukee, maker of Blitz mints: “Ms. Rosshandler finds herself in a precarious cash-flow position and — typical of many start-up entrepreneurs — may not completely grasp how much money she actually will need to grow her brand to a reasonable level of distribution. Arthur Shorin presents a very shrewd and unique proposition. Basically, he is her lifeline. Shorin, who made a staggering amount of money selling Topps to Michael Eisner’s private equity company, has great knowledge of the candy industry. It is imperative for Ms. Rosshandler to move forward with this proposition.” 


Josh Kopelman, a partner at First Round Capital, Philadelphia: “I believe that entrepreneurs, not investors, create great companies. In my experience, if a founder doesn’t retain meaningful equity at the seed stage, it greatly reduces their motivation and creates a real misalignment between investor and entrepreneur. I’d encourage Ms. Rosshandler to keep looking for alternatives, including the possibility of raising money from her friends. If she believes the company is going to create value and be successful, then she is actually doing her friends a favor by letting them invest — assuming she is candid about the extreme level of risk and that they don’t invest money they aren’t prepared to lose. I’d encourage her to consider tweaking the branding to make it more PG-13 than R-rated, as it might reduce some investor’s unease. I know it’s hard to turn down money — especially when a company really needs it.”


Adeo Ressi, founding member of TheFunded and head of The Founder Institute, an early stage business accelerator based in Silicon Valley: “Ms. Rosshandler should definitely not take this deal. First, she loses complete control of the company, and she can be removed or wiped out of her equity at any moment without notice. Second, the deal is very unusual, so she will never be able to attract other investors again. Third, the round values the operating business under $75,000, around two times revenue. As the terms indicate, she will be an employee of Artuitive, so this deal resembles a generous employment offer rather than a viable investment. This is an angel investment opportunity, and there are the largest number of angel investors in history. The volume of investors is both good and bad. On the positive side, if Ms. Rosshandler dedicates four months and meets with a lot of angels, she will raise $500,000 with a seven-figure valuation. On the negative side, she will need to meet with over 150 angels and waste a lot of time pitching to people that will try to take advantage of her, like Arthur Shorin.”


THE RESULTS Offer your thoughts on the You’re the Boss blog at nytimes.com/boss. Next week, on the blog and on this page, we will give an update on what Jacqui Rosshandler decided to do.


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Ruling over bumper-car injury supports amusement park









SAN FRANCISCO — The California Supreme Court, protecting providers of risky recreational activities from lawsuits, decided Monday that bumper car riders may not sue amusement parks over injuries stemming from the inherent nature of the attraction.


The 6-1 decision may be cited to curb liability for a wide variety of activities — such as jet skiing, ice skating and even participating in a fitness class, lawyers in the case said.


"This is a victory for anyone who likes fun and risk activities," said Jeffrey M. Lenkov, an attorney for Great America, which won the case.








But Mark D. Rosenberg, who represented a woman injured in a bumper car at the Bay Area amusement park, said the decision was bad for consumers.


"Patrons are less safe today than they were yesterday," Rosenberg said.


The ruling came in a lawsuit by Smriti Nalwa, who fractured her wrist in 2005 while riding in a bumper car with her 9-year-old son and being involved in a head-on collision. Rosenberg said Great America had told ride operators not to allow head-on collisions, but failed to ask patrons to avoid them.


The court said Nalwa's injury was caused by a collision with another bumper car, a normal part of the ride. To reduce all risk of injury, the ride would have to be scrapped or completely reconfigured, the court said.


"A small degree of risk inevitably accompanies the thrill of speeding through curves and loops, defying gravity or, in bumper cars, engaging in the mock violence of low-speed collisions," Justice Kathryn Mickle Werdegar wrote for the majority. "Those who voluntarily join in these activities also voluntarily take on their minor inherent risks."


Monday's decision extended a legal doctrine that has limited liability for risky sports, such as football, to now include recreational activities.


"Where the doctrine applies to a recreational activity," Werdegar wrote, "operators, instructors and participants …owe other participants only the duty not to act so as to increase the risk of injury over that inherent in the activity."


Amusement parks will continue to be required to use the utmost care on thrill rides such as roller coasters, where riders surrender control to the operator. But on attractions where riders have some control, the parks can be held liable only if their conduct unreasonably raised the dangers.


"Low-speed collisions between the padded, independently operated cars are inherent in — are the whole point of — a bumper car ride," Werdegar wrote.


Parks that fail to provide routine safety measures such as seat belts, adequate bumpers and speed controls might be held liable for an injury, but operators should not be expected to restrict where a bumper car is bumped, the court said.


The justices noted that the state inspected the Great America rides annually, and the maintenance and safety staff checked on the bumper cars the day Nalwa broke her wrist. The ride was functioning normally.


Reports showed that bumper car riders at the park suffered 55 injuries — including bruises, cuts, scrapes and strains — in 2004 and 2005, but Nalwa's injury was the only fracture. Nalwa said her wrist snapped when she tried to brace herself by putting her hand on the dashboard.


Rosenberg said the injury stemmed from the head-on collision. He said the company had configured bumper rides in other parks to avoid such collisions and made the Santa Clara ride uni-directional after the lawsuit was filed.


Justice Joyce L. Kennard dissented, complaining that the decision would saddle trial judges "with the unenviable task of determining the risks of harm that are inherent in a particular recreational activity."


"Whether the plaintiff knowingly assumed the risk of injury no longer matters," Kennard said.


maura.dolan@latimes.com





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The Future Is Now: What We Imagined for 2013 — 10 Years Ago










Predicting the future is hard, but that doesn’t stop us from trying. We’re Wired, after all.


Ten years ago, we boldly declared that we’d be living with phones on our wrists, data-driven goggles on our eyes and gadgets that would safety-test our food for us. Turns out, a lot of the things Sonia Zjawinski conceptualized in our “Living in 2013” feature way back in 2003 were remarkably close to what we’ve seen. We even got the iPhone right (sort of).


And so, as we look back on life in 2013 circa 2003, we’re going to spin it forward once again to tell you what life will be like in 2023.





Mat Honan is a senior writer for Wired's Gadget Lab and the co-founder of the Knight-Batten award-winning Longshot magazine.

Read more by Mat Honan

Follow @mat on Twitter.



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ESPN’s Hannah Storm returns 3 weeks after accident






NEW YORK (AP) — ESPN anchor Hannah Storm returns to the air New Year’s Day, exactly three weeks after she was seriously burned in a propane gas grill accident at her home.


Storm suffered second-degree burns on her chest and hands, and first-degree burns to her face and neck. She lost her eyebrows and eyelashes, and roughly half her hair.






Storm will host ABC’s telecast of the 2013 Rose Parade on Tuesday. Her left hand will be bandaged and she said viewers might notice a difference in her hair texture where extensions have been added.


“I’m a little nervous about things I used to take for granted,” she said by phone this weekend from Pasadena, Calif. “Little things like putting on makeup and even turning pages on my script.”


The award-winning sportscaster and producer was preparing dinner outside her home in Connecticut on the night of Dec. 11 when she noticed the flame on the grill had gone out. She turned off the gas and when she reignited it “there was an explosion and a wall of fire came at me.”


“It was like you see in a movie, it happened in a split-second,” she said. “A neighbor said he thought a tree had fallen through the roof, it was that loud. It blew the doors off the grill.”


With her left hand, she tore off her burning shirt. She tried to use another part of her shirt to extinguish the flames that engulfed her head and chest, while yelling for help. Her 15-year-old daughter, Hannah, called 911 and a computer technician who was working in the house grabbed some ice as Storm tried to cool the burns.


Soon, police and rescue teams arrived at the house. Storm’s husband, NBC sportscaster Dan Hicks, also had returned home with another of the couple’s three daughters. As her mother was being treated, the younger Hannah calmly said something that, days later, her mom could laugh about.


“OK, Mommy, I’m going to do my homework now,” she said.


Storm was taken by ambulance to the Trauma and Burn Center at Westchester Medical Center and was treated for 24 hours.


“I didn’t see my face until the next day and you wonder how it’s going to look,” she said. “I was pretty shocked. But my overarching thought was I’ve covered events with military members who have been through a lot worse than me, and they’ve come through. I kept thinking, ‘I can do this. I’m fortunate.’”


Other than going to Christmas Eve Mass, Storm hadn’t been outside until her trip to California. ESPN reworked its anchor schedule while she was recovering, and NBC and the Golf Channel rearranged their staffing while Hicks attended to his wife.


Storm is set to host her fifth Rose Parade, with some changes. She’s left-handed, and taking notes is almost impossible. Dressing and showering are challenges, too.


Storm said that long before her accident, she’d been inspired by Iraq War veteran, actor and “Dancing With the Stars” winner J.R. Martinez, the grand marshal at last year’s parade. He was severely burned in a land mine accident while serving overseas.


One attraction of this year’s parade that she was eager to see — the Nurses’ Float, and she hoped to use that moment on air to thank everyone who had taken care of her.


Storm wants to anchor “SportsCenter” in Bristol, Conn., next Sunday. After that, the Notre Dame alum is ready to go in person to watch the No. 1 Irish play Alabama in the national championship game at Miami. She said the school reached out after hearing about her injuries and had been very supportive.


“More than anything, I feel gratitude,” she said. “Something like this really makes you appreciate everything you have, even the chance to wake up on New Year’s Day and do your job.”


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Hispanic Pregnancies Fall in U.S. as Women Choose Smaller Families





ORLANDO, Fla. — Hispanic women in the United States, who have generally had the highest fertility rates in the country, are choosing to have fewer children. Both immigrant and native-born Latinas had steeper birthrate declines from 2007 to 2010 than other groups, including non-Hispanic whites, blacks and Asians, a drop some demographers and sociologists attribute to changes in the views of many Hispanic women about motherhood.




As a result, in 2011, the American birthrate hit a record low, with 63 births per 1,000 women ages 15 to 44, led by the decline in births to immigrant women. The national birthrate is now about half what it was during the baby boom years, when it peaked in 1957 at 122.7 births per 1,000 women of childbearing age.


The decline in birthrates was steepest among Mexican-American women and women who immigrated from Mexico, at 25.7 percent. This has reversed a trend in which immigrant mothers accounted for a rising share of births in the United States, according to a recent report by the Pew Research Center. In 2010, birthrates among all Hispanics reached their lowest level in 20 years, the center found.


The sudden drop-off, which coincided with the onset of the recession, suggests that attitudes have changed since the days when older generations of Latinos prized large families and more closely followed Roman Catholic teachings, which forbid artificial contraception.


Interviews with young Latinas, as well as reproductive health experts, show that the reasons for deciding to have fewer children are many, involving greater access to information about contraceptives and women’s health, as well as higher education.


When Marucci Guzman decided to marry Tom Beard here seven years ago, the idea of having a large family — a Guzman tradition back in Puerto Rico — was out of the question.


“We thought one, maybe two,” said Ms. Guzman Beard, who gave birth to a daughter, Attalai, four years ago.


Asked whether Attalai might ever get her wish for a little brother or sister, Ms. Guzman Beard, 29, a vice president at a public service organization, said: “I want to go to law school. I’m married. I work. When do I have time?”


The decisions were not made in a vacuum but amid a sputtering economy, which, interviewees said, weighed heavily on their minds.


Latinos suffered larger percentage declines in household wealth than white, black or Asian households from 2005 to 2009, and, according to the Pew report, their rates of poverty and unemployment also grew more sharply after the recession began.


Prolonged recessions do produce dips in the birthrate, but a drop as large as Latinos have experienced is atypical, said William H. Frey, a sociologist and demographer at the Brookings Institution. “It is surprising,” Mr. Frey said. “When you hear about a decrease in the birthrate, you don’t expect Latinos to be at the forefront of the trend.”


D’Vera Cohn, a senior writer at the Pew Research Center and an author of the report, said that in past recessions, when overall fertility dipped, “it bounced back over time when the economy got better.”


“If history repeats itself, that will happen again,” she said.


But to Mr. Frey, the decrease has signaled much about the aspirations of young Latinos to become full and permanent members of the upwardly mobile middle class, despite the challenges posed by the struggling economy.


Jersey Garcia, a 37-year-old public health worker in Miami, is in the first generation of her family to live permanently outside of the Dominican Republic, where her maternal and paternal grandmothers had a total of 27 children.


“I have two right now,” Ms. Garcia said. “It’s just a good number that I can handle.”


“Before, I probably would have been pressured to have more,” she added. “I think living in the United States, I don’t have family members close by to help me, and it takes a village to raise a child. So the feeling is, keep what you have right now.”


But that has not been easy. Even with health insurance, Ms. Garcia’s preferred method of long-term birth control, an IUD, has been unaffordable. Birth control pills, too, with a $50 co-payment a month, were too costly for her budget. “I couldn’t afford it,” she said. “So what I’ve been doing is condoms.”


According to research by the National Latina Institute for Reproductive Health, the overwhelming majority of Latinas have used contraception at some point in their lives, but they face economic barriers to consistent use. As a consequence, Latinas still experience unintended pregnancy at a rate higher than non-Hispanic whites, according to the institute.


And while the share of births to teenage mothers has dropped over the past two decades for all women, the highest share of births to teenage mothers is among native-born Hispanics.


“There are still a lot of barriers to information and access to contraception that exist,” said Jessica Gonzáles-Rojas, 36, the executive director of the institute, who has one son. “We still need to do a lot of work.”


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DealBook: Major Investigations Could Bring Penalties in 2013

It is not really of question of whether there will be a major white-collar crime that captures the public’s attention in 2013; it’s a question of when and how costly it will be.

If the cases of 2012 can serve as a guide, too many loopholes in the system allow fraud to go undetected.

Take for instance the onetime futures trading firm PFGBest, whose founder confessed to having committed fraud for years at the company, which has about $200 million missing from its accounts. Though futures regulators have spent months wringing their hands on how such a fraud could have gone on for so long, the fact remains that some financiers may keep one step ahead of law enforcement when it comes to white-collar crimes.

Federal prosecutors, however, are likely to remain strongly focused on the insider trading cases. The United States attorney’s office in Manhattan has already racked up an impressive record of winning convictions in every insider trading case that went to trial. They are even winning cases the old-fashioned way by relying primarily on the testimony of cooperating witnesses.

The one black eye that remains for the government is the lack of signature prosecutions emerging from the near collapse of the financial system in 2008. Although the Justice Department and the New York attorney general, Eric T. Schneiderman, have filed civil cases seeking billions in recovery for the sale of questionable securities tied to toxic subprime mortgages, the cases are likely to take years to play out.

Looking ahead to 2013, several major investigations remain open and are likely to bring significant criminal or civil penalties:

Still More to Come on Libor

The investigation of manipulation of the London interbank offered rate, or Libor, had been moving quietly along until the British bank Barclays announced a $450 million settlement in June 2012. The subsequent firestorm in Parliament over the bank’s conduct led to the resignation of its chief executive, Robert E. Diamond Jr., and a push to shift control of the interest rate mechanism into more trustworthy hands.

In hindsight, Barclays got off easily as the first bank to reach a settlement, although it probably did not feel like it in the days after the announcement. UBS has become the new focus of attention for Libor manipulation; it recently paid a $1.5 billion settlement, and its Japanese subsidiary pleaded guilty to fraud.
Other banks caught up in the investigation have to be dreading whether the UBS settlement is the new benchmark. If so, then a billion dollars may be the starting point for any negotiations with the Justice Department and Commodity Futures Trading Commission, which have been leading the investigation in this country. Add to that any penalties assessed by foreign regulators, and the cost of resolving the investigation will be a significant hit to the bottom line of some global banks.

More ominous is the possibility that the Justice Department will demand guilty pleas from banks. That requires an acknowledgement of wrongdoing, which could prove to be useful in the numerous civil lawsuits that have been filed against the banks, meaning more money could be paid out to resolve those cases.

Tackling Bribery and Corruption

As The New York Times has detailed, Wal-Mart is dealing with significant corruption issues in its Mexican subsidiary. The company also acknowledged that it was reviewing its global operations, and had already spent nearly $100 million on its internal investigation.

Though the Foreign Corrupt Practices Act was enacted in 1977, only in the past few years have the Justice Department and Securities and Exchange Commission started to extract significant penalties, often in sectors that had not previously been involved in overseas bribery cases.

For example, among the settlements in 2012 included four companies in the medical field, which all paid significant penalties: Smith & Nephew, $22 million; Biomet, $22.8 million; Pfizer, $60 million; and Eli Lilly, $29 million.

As more companies get caught up in these investigations, it will be interesting to see whether the courts punish repeat offenders more harshly. For instance, I.B.M. reached settlements with the S.E.C. in 2000 and again in 2011 over violations of the Foreign Corrupt Practices Act. A federal district judge in Washington is demanding greater accountability from the company before he will approve the proposed resolution of the case.

Insider Trading in the Cross Hairs

Although insider trading cases have become a staple of federal action in the last three years, the new attention has been on Steven A. Cohen and his hedge fund firm, SAC Capital.

Prosecutors have charged a number of defendants with ties to SAC, and came close to Mr. Cohen in the insider trading indictment of the portfolio manager Mathew Martoma, Although Mr. Cohen is not named in the charges, prosecutors went out of their way to describe the “Hedge Fund Owner” as someone involved in the trading at issue, a sure sign the government is focusing on him.

Mr. Martoma’s lawyer said his client was innocent, which probably means that he will not cooperate with the government if it pursues a case against Mr. Cohen. Without that path to build a case, an interesting question is whether the S.E.C. will use its authority to hold SAC responsible as a “controlling person” for insider trading by its employees, which could result in a triple penalty being imposed. The firm received a so-called Wells notice stating that the agency is considering civil charges.

If the S.E.C. files such a case, this would be a new front in the fight over insider trading that shifts attention to the hedge funds and investment firms that employ the people who capitalized on confidential information. That could potentially expose firms to enormous liability even if their managers were not specifically aware of any legal violations.

Rogue Traders

Every year seems to bring news of a major trading loss as a result of a breakdown in the internal controls at a major financial institution. In 2011, UBS revealed that actions by Kweku Adoboli, a trader in London, cost the bank about $2.3 billion. In 2012, JPMorgan Chase said that a hedging strategy by traders in London had cost the bank at least $6 billion in losses.

On a smaller scale, the boutique brokerage firm Rochdale Securities suffered a $5 million loss when a trader bought about $1 billion in Apple shares, far beyond what he was permitted to do.

Although many of the outsize losses hurt banks’ shareholders rather than the general public, such actions have drawn public calls for accountability.

Prosecutors in London successfully obtained a conviction against Mr. Adoboli this year, and UBS was fined $47.5 million over failing to prevent the actions.

More cases like these are likely to play out. As DealBook reported in October, investigators are looking into the actions of four people who previously worked for JPMorgan in London.

The nature of the markets may allow for more such blowups. Lightning-fast electronic trading allows huge positions to be built up in minutes, heightening the risk of sizable losses if anything goes awry.

And even when there is no sign of intentional wrongdoing, a small error can easily affect global markets. A software glitch at Knight Capital ended up costing the firm about $460 million, while memories of the 2010 “flash crash” are still fresh.

As the new year comes, white-collar cases will continue to serve up new object lessons of the perils and the pitfalls of the financial system. Some will come as a result of creative maneuverings by financiers, and some may call into question whether regulators are effectively overseeing the markets.


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With clock ticking, still no deal to avert 'fiscal cliff'

Efforts to save the nation from going over a year-end "fiscal cliff" are still in disarray as lawmakers continue negotiations to confront the tax-and-spend crisis.









WASHINGTON – Senate leaders remain shy of a deal to avert the automatic tax increases due to take effect at midnight on New Year’s Eve, despite conversations that continued overnight between Vice President Joe Biden and Senate Republican Leader Mitch McConnell (R-Ky.).


Majority Leader Harry Reid (D-Nev.) said on the Senate floor Monday morning that “there are a number of issues in which the two sides are still apart” but that negotiations “are continuing as I speak.”


“We really are running out of time,” he added, about 13 hours before the nation would go over the so-called “fiscal cliff.”








Biden and McConnell, after trading phone calls Sunday afternoon, spoke again at 12:45 a.m. and again at 6:30 a.m. Monday. Biden’s role in the negotiations emerged on Sunday as McConnell, his former colleague of two decades in the Senate, appealed for a “dance partner” in his effort to find a workable solution on tax rates.


QUIZ: How much do you know about the fiscal cliff?


Republicans have said they are willing to raise taxes on wealthier households while stopping the tax increases for most Americans. But one of the sticking points remains the threshold at which current tax rates would be maintained. On Sunday, Republicans suggested taxing income of more than $550,000 for couples, while Democrats set their latest offer at $450,000.


Despite Biden’s lead role, there’s no guarantee any solution would meet with Democratic’ support. Sen. Tom Harkin of Iowa said Monday that he was concerned about the reported details of the deal, indicating that he believed it was preferable to see all tax rates revert to Clinton-era levels.


“I ask, what’s so bad about that?” he said on the Senate floor, noting the economic boom of the 1990s at those tax rates. “As I see this thing developing … no deal is better than a bad deal. And this looks like a very bad deal.”


Sen. Barbara Boxer (D-Calif.), who has supported a higher tax threshold, was more cautious. “One party doesn’t control everything. So we are going to have to meet somewhere in the middle,” she said.


The House was set to hold unrelated votes Monday afternoon but would be ready to vote if the Senate acts. The House Rules Committee waived the Republicans’ 72-hour rule, allowing the chamber to vote on legislation introduced the same day.


PHOTOS: Notable moments of the 2012 presidential election


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michael.memoli@latimes.com


Twitter: @mikememoli


lisa.mascaro@latimes.com


Twitter: @lisamascaroindc





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The Best of Exploration: Top 8 Stories of Space Exploration in 2012

Our recap of the year’s best exploratory exploits continues today with a look at the biggest developments in space exploration. 2012 saw the stunning debut of new spacecraft (Curiosity), the continued contributions of geriatric ones (Voyager), and the first full year since the end of the Space Shuttle program. Casey Dreier of The Planetary Society nominated 8 particularly meaningful developments from the last twelve months.



Image: Dreier’s pick for image of the year, a Cassini photograph of Saturn’s north pole through an infrared filter. (Credit: NASA / JPL / SSI / Emily Lakdawalla)


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Lake Superior State’s 38th list of banished words






DETROIT (AP) — Lake Superior State University‘s 38th annual list of banished words:


fiscal cliff






— kick the can down the road


— double down


— job creators/creation


— passion/passionate


— YOLO


— spoiler alert


bucket list


— trending


— superfood


— boneless wings


— guru


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