DealBook: New Details Suggest a Defense in SAC Case

At the center of the government’s insider trading case against a former portfolio manager at the hedge fund SAC Capital Advisors is a trade that directly involves Steven A. Cohen, the billionaire owner of the fund.

New details about the case have emerged that could cast doubt on the way that trade has been portrayed by the authorities, suggesting a possible line of defense for the portfolio manager and raising questions about whether the government will be able to build a case against Mr. Cohen, who has long been in the cross hairs of an investigation for insider trading on Wall Street.

Federal prosecutors have claimed that SAC dumped millions of shares of two pharmaceutical companies in 2008 after the former employee, Mathew Martoma, received secret information from a doctor about problems with a new Alzheimer’s drug.

In bringing its charges, the government said that SAC not only sold out of its position, but also bet against — or shorted — the drug companies’ stocks before the public announcement of the bad news. The SAC short position, according to prosecutors, allowed it to earn big profits after shares of the companies, Elan and Wyeth, plummeted.

“The fund didn’t merely avoid losses, it greedily schemed to profit further by shorting Elan and Wyeth stock,” said April Brooks, a senior F.B.I. official in New York, during a press conference on Nov. 20, the day Mr. Martoma was arrested.

Internal SAC trading records, according to people directly involved in the case, indicate that the hedge fund did not have a negative bet in place in advance of the announcement of the drug trial’s disappointing results. Instead, the records indicated that SAC, through a series of trades, including a complex transaction known as an equity swap, had virtually no exposure — neither long nor short — heading into the disclosure of the drug data.

A different narrative surrounding the firm’s trading could help Mr. Martoma, who has pleaded not guilty to securities fraud and conspiracy in what the government calls the most lucrative insider trading case ever charged.

The government, however, does have powerful evidence against Mr. Martoma. Prosecutors say the fund avoided losses by selling its roughly $700 million stake in Elan and Wyeth. If, as the government says, Mr. Martoma caused SAC to sell the shares — and then short them — while possessing important, nonpublic information, that would constitute an insider trading crime. And prosecutors have secured the testimony of the doctor who says he leaked the drug trial data to Mr. Martoma.

Still, perhaps more important, the trading records may complicate a government effort to pursue a case against Mr. Cohen. The SAC founder has not been accused of any wrongdoing, and has said he acted appropriately at all times.

In bringing charges against Mr. Martoma, prosecutors appeared to be circling nearer to Mr. Cohen. The criminal complaint against Mr. Martoma noted that Mr. Cohen had spent 20 minutes on the telephone with the portfolio manager the night before SAC began selling its shares. Prosecutors have not claimed that Mr. Cohen knew that Mr. Martoma had confidential information about the drug trials. (Mr. Martoma has refused so far to cooperate in helping the government build a case against his former boss.)

Yet if the 2008 trade is a possible avenue for the government, it is running out of time to bring a case against Mr. Cohen. Under the statute of limitations for insider trading crimes, the government would have to file a criminal case against him by mid-July. That deadline is the five-year anniversary of the trade in question, unless it could prove a conspiracy with Mr. Martoma that continued well past then.

Prosecutors have not sought to reach a “tolling agreement” with Mr. Cohen, which would allow the government additional time to bring a case past the statute of limitations, according to people briefed on the matter. The S.E.C., meanwhile, is weighing whether to file a civil fraud lawsuit against the fund connected to the drug-stock trades.

All this comes as a Feb. 14 cutoff approaches for SAC clients to ask for their money back. The fund has told employees that it expects at least $1 billion in withdrawals from the $14 billion fund amid the intensifying investigation. SAC has a standard quarterly redemption deadline.

Several other factors could make it difficult for the government to implicate Mr. Cohen. SAC is well known for its aggressive, rapid-fire trading style, and several former employees say that there is nothing unusual about the fund’s exiting a large position over just a few days.

“It’s one thing to bring an insider trading charge against a market novice who pours his 401(k) into a stock after hanging up the phone with an insider,” said Morris J. Fodeman, a former prosecutor and now a white-collar criminal defense lawyer at Wilson Sonsini Goodrich & Rosati. “But it’s far more difficult to make a case against a sophisticated hedge fund that routinely takes large positions and employs complex trading strategies.”

Moreover, both inside and outside SAC, there had been much controversy and debate surrounding the effectiveness of the Alzheimer’s drug, called bapineuzumab, leading up to the July 2008 release of the companies’ clinical results. Mr. Martoma’s colleagues in SAC’s health care group raised specific concerns with Mr. Cohen about the wisdom of holding such a large position in the two companies. And while preliminary data announced by Elan and Wyeth in June offered encouraging news, they also suggested potential problems.

“We believe potentially confounding factors will continue to fuel controversy over bapineuzumab,” wrote Caroline Y. Stewart, a drug stock analyst with Piper Jaffray, reacting to the preliminary results.

On July 11, another Wall Street analyst, Jonathan Aschoff at Brean Murray Carret & Company, raised red flags about a sharp run-up in the price of Elan’s shares heading into the presentation of the data.

“We have numerous concerns with the clinical development of bapineuzumab, and what we viewed to be underwhelming top-line Phase 2 results make us highly doubtful of success,” Mr. Aschoff wrote. “In our opinion, this strategy only serves to increase clinical risk and stoke our pessimism.”

The uncertainty relating to the Alzheimer drug’s clinical results could help explain what led Mr. Cohen to hedge SAC’s position so that it had “neutral exposure,” in Wall Street parlance, heading into disclosure of the trial results.

The short positions that SAC established in Elan and Wyeth were matched almost perfectly to offset an equity swap that effectively provided the fund with exposure to 12 million Wyeth shares, according to the SAC documents. An equity swap mimics ordinary shares and gives investors like hedge funds the benefits of stock ownership without actually owning the shares. Funds often use these complex derivatives to accumulate a large position but not tip off the market.

When government officials announced the case against Mr. Martoma, they made no mention of the swap. Instead, they emphasized how SAC had jettisoned its Elan and Wyeth shares and then brazenly accumulated short positions in both companies.

“The charges unsealed today describe cheating — coming and going,” Preet Bharara, the United States attorney in Manhattan, said in opening remarks during the press conference. “Specifically, insider trading first on the long side, and then on the short side.”

The government noted the swap position in its court papers, but did not factor it into SAC’s overall gains and losses in Elan and Wyeth. Because SAC did not trade the Wyeth swap, instead leaving the position in place, it could not be part of any insider trading charge.

Representatives for the United States attorney’s office and the S.E.C. declined to comment. An SAC spokesman declined to comment, as did Charles A. Stillman, the lawyer for Mr. Martoma.

Prosecutors have built their case against Mr. Martoma by securing the cooperation of Dr. Sidney Gilman, a neurology professor who ostensibly leaked to him the confidential data about the drug being jointly developed by Elan and Wyeth. The companies hired Dr. Gilman to oversee the clinical trials. SAC paid Dr. Gilman about $108,000 as a consultant.

The government said that Mr. Cohen’s fund accumulated a roughly $700 million combined stake in Elan and Wyeth based on Mr. Martoma’s recommendation. SAC’s equity swap with respect to Wyeth, however, added $566 million in exposure.

On Thursday, July 17, 2008, as the drug trials neared completion, Dr. Gilman told Mr. Martoma that patients were experiencing serious side effects, the government said. Three days later, on a Sunday, with the markets closed, Mr. Martoma had the 20-minute conversation with Mr. Cohen, according to telephone records cited in the criminal complaint. Prosecutors said that Mr. Martoma told his boss that he was no longer “comfortable” with the investments.

On Monday morning, July 21, at Mr. Cohen’s direction, SAC’s head trader began selling the fund’s 10.5 million shares of Elan and 7.1 million shares of Wyeth. By July 29 — the day that the companies announced the trial results — SAC had not only sold out of its Elan and Wyeth holdings but also established short positions in the stocks. SAC was short about 4.5 million shares of Elan and 3.3 million shares of Wyeth. The fund also purchased a small number of Elan put options, a bet that the company’s shares would decline.

The 12 million-share equity swap position in Wyeth, however, counterbalanced the short exposure. SAC was short 4.5 million shares of Elan but, taking the swap into account, effectively long about 8.7 million shares of Wyeth. On July 30, the first trading day after the companies disclosed the negative trial results, Elan’s stock fell about 42 percent and Wyeth’s stock dropped about 12 percent.

Federal prosecutors said that SAC’s trading ahead of the announcement allowed the fund to avoid $194 million in losses by exiting the Elan and Wyeth positions, and then also earn about $83 million on the short trades. But SAC also had paper losses of about $70 million on its Wyeth swap, almost entirely negating any gains from the short sales.

While such details would seem to contradict how authorities have described the trading, prosecutors could argue that SAC had little choice but to leave the swaps in place, and that was part of the strategy to trade on inside information. That is because selling a swap would be difficult to do without attracting attention in the marketplace. If SAC had sold its swaps, it would have had to notify the Wall Street bank that it entered into the swap transaction with and, in turn, the bank’s trader would have most likely sold the shares on the open market.

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IHT Rendezvous: In Villages, Praying for the Souls of Tibetan Self-Immolators

BEIJING — Since November, when cold winter began in the high Tibetan Plateau, thousands of Tibetan villagers have been gathering daily to pray for the souls of the nearly 100 Tibetans who have burned themselves to death in protest over Chinese rule, in a show of widespread support for the self-immolators among ordinary people, according to witness testimony from a person recently returned from the region.

In traditional winter prayer meetings in villages, they gather to chant “Om mani padme hum,” Tibetan Buddhism’s most important mantra, which speeds a soul toward a good reincarnation, said the person, who witnessed a meeting in the Tibetan region of Qinghai Province in China.

The meetings are a sign of support for the self-immolators and point to widespread dislike among ordinary Tibetans for repressive policies in the region that have turned it into an “open-air prison,” said one ethnic Tibetan police officer in Lhasa, quoted by the witness.

The witness cannot be identified because of the high risk of persecution by the Chinese authorities. But the reliable account of ongoing, severe repression and resentment among Tibetans confirms other reports from the Tibet Autonomous Region or from Tibetan regions in Chinese provinces, where the authorities have been cracking down as they try to stop the spread of the self-immolations.

Chinese courts last week sentenced eight Tibetans for helping self-immolators, The Associated Press reported, including one man to death with a two-year reprieve, and others to between 3 and 12 years in jail, according to Xinhua, the state news agency.

The detail and content of the grass-roots prayer meetings is new.

“The meetings are a traditional thing to do during the winter and are held daily in different villages, and last three days,” the witness said. They are known in Chinese as “fahui,” or dharma meetings (also Buddhist law meetings).

“People drive on motorbikes for long distances, 50 or 60 kilometers, to whichever village is holding a prayer meeting. It’s mostly adults, and they are anywhere between 16 and over 80 years old. As soon as they can drive a motorbike, they’ll go,” the person said.

“Around 1,000 people may attend, often going from one meeting to another without returning home.”

“Their aim is for each meeting to have chanted ‘Om mani padme hum’ 100 million times. There’s no question that they regard the self-immolators as very great, and believe that with the help of their prayers, they will come back as powerful and blessed people,” said the person, who confessed to having reservations about the self-immolations.

Yet, “It’s extremely moving. Because if the self-immolations really were a mistake, how could they get so much support and sympathy form ordinary people?”

As my colleague Jim Yardley reports from India, where many Tibetans live in exile, some there are questioning the self-immolations.

The witness confirmed that, saying: “There is a feeling among some Tibetans,” especially monks or those in the religious hierarchy, “that the Dalai Lama needs to say something to stop it.”

Yet Tibetans who are deeply unhappy with Chinese rule are constrained in how they can protest.

“The problem is that Tibetans are Buddhists. The way things are there now, in other places, people might rise up and set off bombs. But they can’t do that because Buddhists believe you shouldn’t destroy other people’s happiness. So the only way they can protest is by killing themselves,” the person said.

And so the grass-roots support goes on.

The testimony from this person also confirmed reports of a very harsh crackdown under way in Lhasa, seat of the Jokhang, Tibet’s holiest temple, and the Potala Palace, the former home of the Dalai Lama, whom Tibetans revere and who has lived in exile since fleeing the Chinese in 1959.

The crackdown, in response to the self-immolations that began not long after an uprising in Lhasa was crushed in 2008, has turned Tibet into “an open-air prison,” said an ethnic Tibetan police officer. Like some other ethnic Tibetan police officers, he was considering resigning his post, he said.

“Lhasa used to be a sacred place for Buddhism. Now it’s a sacred place for Marxism-Leninism,” he said. “Every day there are meetings where leaders both big and small tell you that maintaining stability,” or “weiwen,” in Chinese, “is the most important thing, what the main tasks in Lhasa are. Lhasa is no longer a Buddhist sacred place,” he said.

“Lhasa is stuffed with police, every 10 paces there are several. I am growing to hate my own work. It’s really not possible to keep doing it. Some have already resigned,” he told the witness.

The crackdown includes forbidding ethnic Tibetans from the outlying regions, like Qinghai or Sichuan Provinces, which lie outside Tibet proper, from traveling to Tibet and is strictly enforced at airports and other transport nodes. Ethnic Han Chinese, however, can pass, effectively making Tibet out of bounds for many Tibetans.

Any Tibetan from outside the region wishing to travel to Lhasa must have a “sponsor” in the city working for the government, the witness said. They must surrender their identity cards and be photographed. Uniformed and plainclothes police officers and military patrol heavily in the city, trying to stop self-immolations.

The ban on ethnic Tibetans from outside Tibet, many of whom have traditionally taken pilgrimages to Lhasa, means that hotels and other businesses in the city have suffered since last May when they were ordered shut to such travelers. A petition is currently circulating from hotel owners asking the government to compensate them financially, “or we will take our request higher.” For reasons of political sensitivity, the petition, which has been seen by this newspaper, cannot be discussed in detail.

It is also extremely difficult for ordinary ethnic Tibetans to get a passport, meaning they cannot travel overseas, the witness said. The person believes the government’s motive is to minimize accounts, like this one, of the harsh repression in the region.

“They don’t want Tibetans leaving the country and telling the world what’s happening there. Hundreds of people leaving and telling the world is very different from one or two,” the person said.

With the Lunar New Year approaching, the prayer meetings will soon be scaled back, as farm work and animal husbandry resume. For now, though, the villagers are praying hard for the souls of the dead, millions of mantras circulating in the thin air of the plateau.

“They say, we want their lives to come back. We want world peace. They pray for Tibet to have peaceful and happy days, and the world, too,” the person said.

Said the police officer: “Living in this tightly controlled atmosphere is unbearable. There’s no feeling of happiness. But maybe it’s good this way, it may speed up the day when the situation has to change. But I don’t have the courage to self-immolate. Maybe after I retire I’ll go to Beijing and petition.”

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5 Fascinating Facts We Learned From Reddit This Week

Click here to view the gallery: Reddit Facts 2/2

If you’ve ever wanted to learn how to game the French lottery of 1728 (and who hasn’t, amirite?), you’ve come to the right place. This week’s edition of Reddit Facts has some delightful tidbits about the Fab Four, a famous photograph and a funky fruit.

[More from Mashable: 10 Quirky Etsy Finds to Celebrate Groundhog Day]

Homepage image courtesy of Wikimedia Commons.

[More from Mashable: 10 Valentine’s Day Gifts for the Special Geek in Your Life]

This story originally published on Mashable here.

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Peterson double winner of AP NFL awards

NEW ORLEANS (AP) — Adrian Peterson called it a blessing in disguise.

Strange way to describe career-threatening major knee surgery.

The Minnesota Vikings' star came back better than ever, just missing Eric Dickerson's longstanding rushing record and closing out the season with two of the top NFL awards from The Associated Press: Most Valuable Player and Offensive Player of the Year.

As sort of an added bonus, he beat Peyton Manning for both of them Saturday night.

"My career could have easily been over, just like that," the sensational running back said. "Oh man. The things I've been through throughout my lifetime has made me mentally tough.

" I'm kind of speechless. This is amazing, " he said in accepting his awards, along with five others at the "2nd Annual NFL Honors" show on CBS saluting the NFL's best players, performances and plays from the 2012 season. The awards are based on balloting from a nationwide panel of 50 media members who regularly cover the NFL.

Manning's own sensational recovery, from four neck surgeries, earned him Comeback Player honors.

"This injury was unlike any other," said the only four-time league MVP. "There really was no bar or standard, there were no notes to copy. We were coming up with a rehab plan as we went."

Before sitting out 2011, Manning had never missed a start in his first 13 seasons with Indianapolis. But he was released by the Colts last winter because of his neck issues, signed with Denver and guided the Broncos to the AFC's best record, 13-3.

"Certainly you have double variables of coming off injury, not playing for over year and joining a new team. That certainly added a lot to my plate, so it was hard to really know what to expect," Manning said. "I can't tell you how grateful and thankful I am. I can't tell you how happy I am to be playing the game of football we all love so much."

Also honored were:

—Washington's Robert Griffin III, who beat out a strong crop of quarterbacks for the top offensive rookie award.

— Houston end J.J. Watt, who took Defensive Player of the Year, getting 49 of 50 votes.

— Bruce Arians, the first interim coach to win Coach of the Year after leading Indianapolis to a 9-3 record while head man Chuck Pagano was being treated for leukemia. Arians became Arizona's head coach last month.

—Carolina linebacker Luke Kuechly, the league's leader in tackles with 164, who won the top defensive rookie award.

Peterson returned better than ever from the left knee surgery, rushing for 2,097 yards, 9 short of breaking Dickerson's record. He also sparked the Vikings' turnaround from 3-13 to 10-6 and a wild-card playoff berth.

He received 30 1-2 votes to 19 1-2 for Manning.

"I played my heart out, every opportunity I had," Peterson said. "The result of that is not what I wanted, which is being in the Super Bowl game. But I have a couple of good pieces of hardware to bring back and (put) in my statue area. So it feels good."

Was the knee injury the toughest thing he'd ever overcome?

"Losing my brother at 7, seeing him get hit by a car right in front of me, that was the toughest," he said. "But as far as injuries, yes."

New England QB Tom Brady was the last winner of MVP and Offensive Player in 2010.

"Trying to get two or three like Peyton, trying to get to your level," Peterson said of his first MVP award. "But I won't be there to accept it because I'll be winning with my coach, the most important award, the team award, the Super Bowl."

Dickerson predicted Peterson could get back to 2,000 yards.

"I hope he does have a chance to do it again," Dickerson said, adding with a laugh, "but do I want him to break it? No, I do not."

Wearing a burgundy and gold tie in honor of his Redskins, Griffin said his goal is to be ready for the season opener.

"It's truly a blessing to be up there — to be able to stand, first and foremost," said Griffin, who underwent knee surgery last month. He added that next season "you'll see a better Robert Griffin."

Arians moved up from offensive coordinator and helped Indianapolis make the playoffs at 10-6, making him an easy winner in the balloting.

"It's hard to put into words the feelings of this past year," he said. "This was kind of the cherry on the top, whipped cream and everything else you put on top."

Watt swatted the competition as Denver's Von Miller got the only other vote in the most lopsided balloting of all the awards.

"It sets the bar for me," Watt said. He led the NFL with 20 1-2 sacks and also blocked an astounding 16 passes. "I want to go out and do even better. I want to do even bigger things."

___

Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

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Concerns About A.D.H.D. Practices and Amphetamine Addiction

Before his addiction, Richard Fee was a popular college class president and aspiring medical student. "You keep giving Adderall to my son, you're going to kill him," said Rick Fee, Richard's father, to one of his son's doctors.

VIRGINIA BEACH — Every morning on her way to work, Kathy Fee holds her breath as she drives past the squat brick building that houses Dominion Psychiatric Associates.

Andrea Mohin/The New York Times

MENTAL HEALTH CLINIC Dominion Psychiatric Associates in Virginia Beach, where Richard Fee was treated by Dr. Waldo M. Ellison. After observing Richard and hearing his complaints about concentration, Dr. Ellison diagnosed attention deficit hyperactivity disorder and prescribed the stimulant Adderall.

It was there that her son, Richard, visited a doctor and received prescriptions for Adderall, an amphetamine-based medication for attention deficit hyperactivity disorder. It was in the parking lot that she insisted to Richard that he did not have A.D.H.D., not as a child and not now as a 24-year-old college graduate, and that he was getting dangerously addicted to the medication. It was inside the building that her husband, Rick, implored Richard’s doctor to stop prescribing him Adderall, warning, “You’re going to kill him.”

It was where, after becoming violently delusional and spending a week in a psychiatric hospital in 2011, Richard met with his doctor and received prescriptions for 90 more days of Adderall. He hanged himself in his bedroom closet two weeks after they expired.

The story of Richard Fee, an athletic, personable college class president and aspiring medical student, highlights widespread failings in the system through which five million Americans take medication for A.D.H.D., doctors and other experts said.

Medications like Adderall can markedly improve the lives of children and others with the disorder. But the tunnel-like focus the medicines provide has led growing numbers of teenagers and young adults to fake symptoms to obtain steady prescriptions for highly addictive medications that carry serious psychological dangers. These efforts are facilitated by a segment of doctors who skip established diagnostic procedures, renew prescriptions reflexively and spend too little time with patients to accurately monitor side effects.

Richard Fee’s experience included it all. Conversations with friends and family members and a review of detailed medical records depict an intelligent and articulate young man lying to doctor after doctor, physicians issuing hasty diagnoses, and psychiatrists continuing to prescribe medication — even increasing dosages — despite evidence of his growing addiction and psychiatric breakdown.

Very few people who misuse stimulants devolve into psychotic or suicidal addicts. But even one of Richard’s own physicians, Dr. Charles Parker, characterized his case as a virtual textbook for ways that A.D.H.D. practices can fail patients, particularly young adults. “We have a significant travesty being done in this country with how the diagnosis is being made and the meds are being administered,” said Dr. Parker, a psychiatrist in Virginia Beach. “I think it’s an abnegation of trust. The public needs to say this is totally unacceptable and walk out.”

Young adults are by far the fastest-growing segment of people taking A.D.H.D medications. Nearly 14 million monthly prescriptions for the condition were written for Americans ages 20 to 39 in 2011, two and a half times the 5.6 million just four years before, according to the data company I.M.S. Health. While this rise is generally attributed to the maturing of adolescents who have A.D.H.D. into young adults — combined with a greater recognition of adult A.D.H.D. in general — many experts caution that savvy college graduates, freed of parental oversight, can legally and easily obtain stimulant prescriptions from obliging doctors.

“Any step along the way, someone could have helped him — they were just handing out drugs,” said Richard’s father. Emphasizing that he had no intention of bringing legal action against any of the doctors involved, Mr. Fee said: “People have to know that kids are out there getting these drugs and getting addicted to them. And doctors are helping them do it.”

“...when he was in elementary school he fidgeted, daydreamed and got A’s. he has been an A-B student until mid college when he became scattered and he wandered while reading He never had to study. Presently without medication, his mind thinks most of the time, he procrastinated, he multitasks not finishing in a timely manner.”

Dr. Waldo M. Ellison

Richard Fee initial evaluation

Feb. 5, 2010

Richard began acting strangely soon after moving back home in late 2009, his parents said. He stayed up for days at a time, went from gregarious to grumpy and back, and scrawled compulsively in notebooks. His father, while trying to add Richard to his health insurance policy, learned that he was taking Vyvanse for A.D.H.D.

Richard explained to him that he had been having trouble concentrating while studying for medical school entrance exams the previous year and that he had seen a doctor and received a diagnosis. His father reacted with surprise. Richard had never shown any A.D.H.D. symptoms his entire life, from nursery school through high school, when he was awarded a full academic scholarship to Greensboro College in North Carolina. Mr. Fee also expressed concerns about the safety of his son’s taking daily amphetamines for a condition he might not have.

“The doctor wouldn’t give me anything that’s bad for me,” Mr. Fee recalled his son saying that day. “I’m not buying it on the street corner.”

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Iceland, Prosecutor of Bankers, Sees Meager Returns

Ilvy Njiokiktjien for The New York Times

"Greed is not a crime. But the question is: where does greed lead?" said Olafur Hauksson, a special prosecutor in Reykjavik.

REYKJAVIK, Iceland — As chief of police in a tiny fishing town for 11 years, Olafur Hauksson developed what he thought was a basic understanding of the criminal mind. The typical lawbreaker, he said, recalling his many encounters with small-time criminals, “clearly knows that he crossed the line” and generally sees “the difference between right and wrong.”

Today, the burly, 48-year-old former policeman is struggling with a very different sort of suspect. Reassigned to Reykjavik, the Icelandic capital, to lead what has become one of the world’s most sweeping investigation into the bankers whose actions contributed to the global financial crisis in 2008, Mr. Hauksson now faces suspects who “are not aware of when they crossed the line” and “defend their actions every step of the way.”

With the global economy still struggling to recover from the financial maelstrom five years ago, governments around the world have been criticized for largely failing to punish the bankers who were responsible for the calamity. But even here in Iceland, a country of just 320,000 that has gone after financiers with far more vigor than the United States and other countries hit by the crisis, obtaining criminal convictions has proved devilishly difficult.

Public hostility toward bankers is so strong in Iceland that “it is easier to say you are dealing drugs than to say you’re a banker,” said Thorvaldur Sigurjonsson, the former head of trading for Kaupthing, a once high-flying bank that crumbled. He has been called in for questioning by Mr. Hauksson’s office but has not been charged with any wrongdoing.

Yet, in the four years since the Icelandic Parliament passed a law ordering the appointment of an unnamed special prosecutor to investigate those blamed for the country’s spectacular meltdown in 2008, only a handful of bankers have been convicted.

Ministers in a left-leaning coalition government elected after the crash agree that the wheels of justice have ground slowly, but they call for patience, explaining that the process must follow the law, not vengeful passions.

“We are not going after people just to satisfy public anger,” said Steingrimur J. Sigfusson, Iceland’s minister of industry, a former finance minister and leader of the Left-Green Movement that is part of the governing coalition.

Hordur Torfa, a popular singer-songwriter who helped organize protests that forced the previous conservative government to resign, acknowledged that “people are getting impatient” but said they needed to accept that “this is not the French Revolution. I don’t believe in taking bankers out and hanging them or shooting them.”

Others are less patient. “The whole process is far too slow,” said Thorarinn Einarsson, a left-wing activist. “It only shows that ‘banksters’ can get away with doing whatever they want.”

Mr. Hauksson, the special prosecutor, said he was frustrated by the slow pace but thought it vital that his office scrupulously follow legal procedure. “Revenge is not something we want as our main driver in this process. Our work must be proper today and be seen as proper in the future,” he said.

Part of the difficulty in prosecuting bankers, he said, is that the law is often unclear on what constitutes a criminal offense in high finance. “Greed is not a crime,” he noted. “But the question is: where does greed lead?”

Mr. Hauksson said it was often easy to show that bankers violated their own internal rules for lending and other activities, but “as in all cases involving theft or fraud, the most difficult thing is proving intent.”

And there are the bankers themselves. Those who have been brought in for questioning often bristle at being asked to account for their actions. “They are not used to being questioned. These people are not used to finding themselves in this situation,” Mr. Hauksson said. They also hire expensive lawyers.

The special prosecutor’s office initially had only five staff members but now has more than 100 investigators, lawyers and financial experts, and it has relocated to a big new office. It has opened about 100 cases, with more than 120 people now under investigation for possible crimes relating to an Icelandic financial sector that grew so big it dwarfed the rest of the economy.

To help ease Mr. Hauksson’s task, legislators amended the law to allow investigators easy access to confidential bank information, something that previously required a court order.

Parliament also voted to put the country’s prime minister at the time of the banking debacle on trial for negligence before a special tribunal. (A proposal to try his cabinet failed.) Mr. Hauksson was not involved in the case against the former leader, Geir H. Haarde, who last year was found guilty of failing to keep ministers properly informed about the 2008 crisis but was acquitted on more serious charges that could have resulted in a prison sentence.

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Taliban Assault in Pakistan Results in Deaths of 35

PESHAWAR — Taliban militants killed at least nine soldiers and four paramilitary troops in an attack on a Pakistani army base in northwestern Pakistan early Saturday, officials said. Ten civilians, including three women and three children who were living in a nearby compound, were also killed.

The brazen assault took place in the restive Khyber-Pakhtunkhwa province and comes just a day after a suicide bombing near a mosque in another northwestern town, Hangu, killed at least 26 people.

A spokesman for Tehrik-e-Taliban Pakistan, commonly known as the Pakistani Taliban, claimed responsibility and said it was to avenge the death of two Taliban commanders who were killed in U.S drone strikes.

According to initial details, Taliban militants, armed with heavy machine guns, fired rockets in the pre-dawn assault at the base in Serai Norang in the Lakki Marwat district, setting off a heavy gun battle that lasted for several hours.

A Pakistani army official, speaking on condition of anonymity, said that 12 militants were killed in the assault.

“Bodies of four terrorists, out of which two were wearing suicide jackets, are in custody of security forces,” the official said.

Eighteen security forces officials were wounded in the attack and were sent for treatment to a military hospital in Peshawar, the provincial capital.

During the attack, one of the suicide bombers entered a house near the camp and detonated his explosives, killing the women and children, the official said.

Pakistani officials described the base as “an isolated camp,” and one of the three bases set up two years ago to wrest Lakki Marwat from the control of Taliban militants.

The ferocity of the attack, which appeared well planned and coordinated, took security officials by surprise, and they speculated that the attackers came from neighboring lawless semi-autonomous tribal regions, where the government has traditionally had little sway.

“We are trying to piece evidence,” a security official said.

Ihsanullah Ihsan, the Taliban spokesman, who said in a telephone interview the attack was in retaliation to the killing of two Taliban commanders, identified one of the commanders as Wali Muhammad, also known as Toofani Mehsud. He was killed in an American drone strike on Jan. 6 in the tribal region of South Waziristan, and was known as a trainer of suicide bombers.

The country’s lawless tribal regions have been a safe haven for local and foreign militants and as a result have been a frequent target of American drone strikes, which are deeply unpopular in the country. Pakistan’s parliament has repeatedly demanded an end to drone strikes, although Pakistani officials privately acknowledge the effectiveness of the such attacks in killing militants.

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Nintendo says it won’t cut Wii U price despite slumping sales

Nintendo (NTDOY) has a lot riding on its latest video game console, but sales have been slow thus far. Gamers have not responded to the bulky new GamePad controller, which could be considered the biggest point of differentiation on the Wii U. As a result, Nintendo recently slashed its sales outlook on Wii U consoles for the March quarter. Following some speculation that Nintendo might cut the price of the Wii U in an effort to bolster sales, the company confirmed alongside its third-quarter results that dropping the console’s price is not an option.

[More from BGR: BlackBerry doesn’t need to catch up with Android and iOS overnight, it needs to live to fight another day]

“With Wii U, we have taken a rather resolute stance in pricing it below its manufacturing cost, so we are not planning to perform a markdown,” the company said. “I would like to make this point absolutely clear. We are putting our lessons from Nintendo 3DS to good use, as I have already publicly stated. However, given that it has now become clear that we have not yet fully communicated the value of our product, we will try to do so before the software lineup is enhanced and at the same time work to enrich the software lineup which could make consumers understand the appeal of Wii U.”

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Nintendo stands firm behind its new console, and the company says it will gain traction once consumers become more familiar with the new GamePad controller and other Wii U features.

This article was originally published on BGR.com

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Why is Beckham sitting on the bench for nothing?

PARIS (AP) — David Beckham has won league championships in three countries on two continents, earns millions of dollars in endorsements and his name is practically synonymous with celebrity itself. He has his own cologne, for goodness sake. So why is he even bothering to sit on the bench for the Paris Saint-Germain football club?

His royal highness of football doesn't need the money — and he's said he'll donate his PSG salary to charity — but he does need to start thinking about life after the game. At 37, Beckham is practically a dinosaur for the sport, and he acknowledged in his welcoming press conference on Thursday that he probably won't be in the team's starting lineup.

Instead, Beckham may be beginning to put in place a plan for life after the final whistle. Ellis Cashmore, a sociologist who writes about sports and media culture at Staffordshire University, said that prolonged exposure is always useful to celebrities building empires. In that way, the deal with PSG does double work: It keeps his name in lights for longer and also garners extra attention for the charitable contribution.

"When he does stop playing, which is going to be quite soon, his overall brand appeal will inevitably decline because we will inevitably forget about this guy," he said. "I think he's probably thinking, I want to stay in the shop window for a bit longer."

But Cashmore also cautioned against being too cynical in assessing Beckham's motives: "The guy is an athlete. He wants to do what he loves to do."

Bruno Satin, an independent players' agent who was with IMG for a decade, also said that the move to PSG — even if it's to sit on the bench — is a step up for Beckham.

"For him, to be on the PSG team, it's a higher level than being on the Los Angeles Galaxy," he said. "For the world of football, for real football, the Los Angeles Galaxy is nothing on the map of football."

Some wondered if Beckham was trying to avoid the notoriously sticky fingers of the French state with his plans to donate his salary.

But Sandra Hodzic, a tax lawyer with Salans, said the deduction an individual can take on such contributions is limited. Instead, it would be smarter for PSG to directly donate the salary — and take a big tax break in the process.

Doing so would have an added benefit for the club: UEFA, the governing body for European football, mandate that clubs break even. The donation could allow PSG to essentially write off Beckham's entire salary — a huge help for a team notorious for mega-contracts.

Beckham, meanwhile, would be better off trying to avoid becoming a French tax resident at all. So far, Hodzic said, he is making all the right moves: His family is staying in London, he plans to live only part-time in the country for less than six months, and his primary source of income —whether or not he donates his salary — isn't being earned in France.

Beckham's agent did not return calls for comment on specifics of the contract.

Still, the charitable contribution has raised the question about what Beckham is getting out of the deal. For one, he likely is still getting a cut of rights to his image. Jerseys with his name on them were already selling out at the PSG store on the Champs-Elysees on Friday.

Cashmore, who wrote a book called "Beckham," calls him a "marketing phenomenon" and estimates that about 70 percent of Beckham's income comes from endorsement deals — with Adidas, for instance. That makes salary almost irrelevant — especially for a man estimated by the Sunday Times Rich List to be worth 160 million pounds ($253 million).

But the football feeds the endorsements, Cashmore says.

"It makes an awful lot of business sense to perpetuate, to prolong his active competitive football career," he said, especially with a team that's doing fairly well this year. "It makes an awful lot of sense for him to showcase himself because it will generate more income from his various other sponsorship and licensing activities."

But certainly this move, as any at this late-stage in his playing career, is being made with an eye on what will come next. Cashmore said that when Beckham signed with the L.A. Galaxy, there was an understanding that he would eventually become an ambassador for American soccer. That plan clearly fell by the wayside — perhaps because Major League Soccer decided it was just too expensive to keep on the star after his presence on American soil failed to generate more interest in the game.

It's possible, Cashmore said, that Beckham is looking for a similar deal after his stint at PSG, which is Qatari owned. The tiny, wealthy nation is hosting the World Cup in 2022, and Beckham's contract with PSG will establish a relationship with it; from there, a role as, say, an ambassador for the tournament would seem more natural.

"For his after-career conversion, it's important to have links with major actors in the world of sports," said Satin. And Qatar is certainly one. It has poured money into PSG, drawing major names like striker Zlatan Ibrahimovic. It also funds the satellite network Al Jazeera, which could provide Beckham with a platform. And then there's the World Cup.

In the end, though, Satin said the clue to Beckham's thinking may be as simple as the eternal draw of Paris.

"PSG has become a glamorous club, a pretty nice club in a beautiful city," said Bruno Satin, an agent. "It's just two hours on the Eurostar (train) from London."

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AP Sports Writer Rob Harris contributed to this report from London.

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Follow Sarah DiLorenzo at http://www.twitter.com/sdilorenzo

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Ferrol Sams, Doctor Turned Novelist, Dies at 90

Ferrol Sams, a country doctor who started writing fiction in his late 50s and went on to win critical praise and a devoted readership for his humorous and perceptive novels and stories that drew on his medical practice and his rural Southern roots, died on Tuesday at his home in Lafayette, Ga. He was 90.

The cause, said his son Ferrol Sams III, also a doctor, was that he was “slap wore out.”

“He lived a full life,” his son said. “He didn’t leave anything in the tank.”

Dr. Sams grew up on a farm in the rural Piedmont area of Georgia, seven mud-road miles from the nearest town. He was a boy during the Depression; books meant escape and discovery. He read “Robinson Crusoe,” then Mark Twain and Charles Dickens. One of his English professors at Mercer University, in Macon, suggested he consider a career in writing, but he chose another route to examining the human condition: medical school.

When he was 58 — after he had served in World War II, started a medical practice with his wife, raised his four children and stopped devoting so much of his mornings to preparing lessons for Sunday school at the Methodist church — he began writing “Run With the Horsemen,” a novel based on his youth. It was published in 1982.

“In the beginning was the land,” the book begins. “Shortly thereafter was the father.”

In The New York Times Book Review, the novelist Robert Miner wrote, “Mr. Sams’s approach to his hero’s experiences is nicely signaled in these two opening sentences.”

He added: “I couldn’t help associating the gentility, good-humored common sense and pace of this novel with my image of a country doctor spinning yarns. The writing is elegant, reflective and amused. Mr. Sams is a storyteller sure of his audience, in no particular hurry, and gifted with perfect timing.”

Dr. Sams modeled the lead character in “Run With the Horsemen,” Porter Osborne Jr., on himself, and featured him in two more novels, “The Whisper of the River” and “When All the World Was Young,” which followed him into World War II.

Dr. Sams also wrote thinly disguised stories about his life as a physician. In “Epiphany,” he captures the friendship that develops between a literary-minded doctor frustrated by bureaucracy and a patient angry over past racism and injustice.

Ferrol Sams Jr. was born Sept. 26, 1922, in Woolsey, Ga. He received a bachelor’s degree from Mercer in 1942 and his medical degree from Emory University in 1949. In his addition to his namesake, survivors include his wife, Dr. Helen Fletcher Sams; his sons Jim and Fletcher; a daughter, Ellen Nichol; eight grandchildren; and nine great-grandchildren.

Some critics tired of what they called the “folksiness” in Dr. Sams’s books. But he did not write for the critics, he said. In an interview with the Georgia Writers Hall of Fame, Dr. Sams was asked what audience he wrote for. Himself, he said.

“If you lose your sense of awe, or if you lose your sense of the ridiculous, you’ve fallen into a terrible pit,” he added. “The only thing that’s worse is never to have had either.”

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