AP Source: Hernandez on verge of new deal with M's


SEATTLE (AP) — Felix Hernandez and the Seattle Mariners are working on a $175 million, seven-year contract that would make him the highest-paid pitcher in baseball, according to a person with knowledge of the deal's details.


The person spoke to The Associated Press Thursday on condition of anonymity because the agreement has not been completed. USA Today first reported the deal.


Seattle would add $134.5 million of guaranteed money over five years to the contract of the 2010 AL Cy Young Award winner, whose current agreement calls for him to receive $40.5 million over the next two seasons.


Hernandez's total dollars would top CC Sabathia's original $161 million, seven-year contract with the New York Yankees and his $25 million average would surpass Zack Greinke's $24.5 million under his new contract with the Los Angeles Dodgers and tie him for the second-highest in baseball with Josh Hamilton and Ryan Howard behind Alex Rodriguez ($27.5 million). Hernandez's new money would average $26.9 million over five years.


Hernandez agreed to a $78 million, five-year contract in January 2010 and has earned an additional $2.5 million in escalators and $300,000 in bonuses. He is due $20 million this year and $20.5 million in 2014, which would be superseded by the new deal.


Seattle general manager Jack Zduriencik said he could not comment when reached on Thursday, and Hernandez's representatives didn't immediately return messages.


If the deal is finalized, it would leave Detroit's Justin Verlander and the Dodgers' Clayton Kershaw as the most attractive pitchers eligible for free agency after the 2014 season. Tampa Bay's David Price is eligible after the 2015 season.


Hernandez has become the face of Seattle's struggling franchise, transforming from a curly haired 19-year-old who wore his hat crooked to one of the most dominant and exciting pitchers in baseball. Known as "King Felix," he became the first Seattle pitcher to throw a perfect game in a 1-0 win over Tampa Bay last August.


His fiery enthusiasm on the mound and his willingness to first sign a long-term deal in 2010 have endeared him to fans in the Pacific Northwest who have gone more than a decade without seeing postseason baseball.


Hernandez, who will turn 27 on April 8, is 98-76 with a 3.22 ERA in eight seasons with the Mariners. He won a career-high 19 games in 2009 when he finished second in the Cy Young voting then won the award a year later when he went just 13-12 but had a 2.27 ERA and 232 strikeouts.


Hernandez appeared to be making another Cy Young push last year before going 0-4 in his last six starts, which left him at 13-9 with 223 strikeouts.


His career record would be even better if he didn't play with one of baseball's worst offenses. Seattle had the lowest batting average in the major leagues in each of the last three seasons. Hernandez has taken 10 losses during that span when he's given up two earned runs or less.


For his career, Hernandez has allowed two earned runs or less in 141 of 238 starts, but the team is only 99-42 in those games due to the offensive problems.


Locking up Hernandez long-term won't solve all of the problems that have left Seattle looking up at Texas, Oakland and the Los Angeles Angles in the AL West for most of the last 10 years. The Mariners have tried to address some of those issues this offseason by trading for Kendrys Morales and Michael Morse to provide more punch to go along with young prospects Dustin Ackley, Kyle Seager and Jesus Montero, who have all shown flashes early in their careers.


But should the deal be finalized, the Mariners at least have the security of knowing who'll be at the top of their rotation for most of this decade.


___


AP Sports Writer Ronald Blum contributed to this report.


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Well: Think Like a Doctor: A Confused and Terrified Patient

The Challenge: Can you solve the mystery of a middle-aged man recovering from a serious illness who suddenly becomes frightened and confused?

Every month the Diagnosis column of The New York Times Magazine asks Well readers to sift through a difficult case and solve a diagnostic riddle. Below you will find a summary of a case involving a 55-year-old man well on his way to recovering from a series of illnesses when he suddenly becomes confused and paranoid. I will provide you with the main medical notes, labs and imaging results available to the doctor who made the diagnosis.

The first reader to figure out this case will get a signed copy of my book, “Every Patient Tells a Story,” along with the satisfaction of knowing you solved a case of Sherlockian complexity. Good luck.

The Presenting Problem:

A 55-year-old man who is recovering from a devastating injury in a rehabilitation facility suddenly becomes confused, frightened and paranoid.

The Patient’s Story:

The patient, who was recovering from a terrible injury and was too weak to walk, had been found on the floor of his room at the extended care facility, raving that there were people out to get him. He was taken to the emergency room at the Waterbury Hospital in Connecticut, where he was diagnosed with a urinary tract infection and admitted to the hospital for treatment. Doctors thought his delirium was caused by the infection, but after 24 hours, despite receiving the appropriate antibiotics, the patient remained disoriented and frightened.

A Sister’s Visit:

The man’s sister came to visit him on his second day in the hospital. As she walked into the room she was immediately struck by her brother’s distress.

“Get me out of here!” the man shouted from his hospital bed. “They are coming to get me. I gotta get out of here!”

His brown eyes darted from side to side as if searching for his would-be attackers. His arms and legs shook with fear. He looked terrified.

For the past few months, the man had been in and out of the hospital, but he had been getting better — at least he had been improving the last time his sister saw him, the week before. She hurried into the bustling hallway and found a nurse. “What the hell is going on with my brother?” she demanded.

A Long Series of Illnesses:

Three months earlier, the patient had been admitted to that same hospital with delirium tremens. After years of alcohol abuse, he had suddenly stopped drinking a couple of days before, and his body was wracked by the sudden loss of the chemical he had become addicted to. He’d spent an entire week in the hospital but finally recovered. He was sent home, but he didn’t stay there for long.

The following week, when his sister hadn’t heard from him for a couple of days, she forced her way into his home. There she found him, unconscious, in the basement, at the bottom of his staircase. He had fallen, and it looked as if he may have been there for two, possibly three, days. He was close to death. Indeed, in the ambulance on the way to the hospital, his heart had stopped. Rapid action by the E.M.T.’s brought his heart back to life, and he made it to the hospital.

There the extent of the damage became clear. The man’s kidneys had stopped working, and his body chemistry was completely out of whack. He had a severe concussion. And he’d had a heart attack.

He remained in the intensive care unit for nearly three weeks, and in the hospital another two weeks. Even after these weeks of care and recovery, the toll of his injury was terrible. His kidneys were not working, so he required dialysis three times a week. He had needed a machine to help him breathe for so long that he now had to get oxygen through a hole that had been cut into his throat. His arms and legs were so weak that he could not even lift them, and because he was unable even to swallow, he had to be fed through a tube that went directly into his stomach.

Finally, after five weeks in the hospital, he was well enough to be moved to a short-term rehabilitation hospital to complete the long road to recovery. But he was still far from healthy. The laughing, swaggering, Harley-riding man his sister had known until that terrible fall seemed a distant memory, though she saw that he was slowly getting better. He had even started to smile and make jokes. He was confident, he had told her, that with a lot of hard work he could get back to normal. So was she; she knew he was tough.

Back to the Hospital:

The patient had been at the rehab facility for just over two weeks when the staff noticed a sudden change in him. He had stopped smiling and was no longer making jokes. Instead, he talked about people that no one else could see. And he was worried that they wanted to harm him. When he remained confused for a second day, they sent him to the emergency room.

You can see the records from that E.R. visit here.

The man told the E.R. doctor that he knew he was having hallucinations. He thought they had started when he had begun taking a pill to help him sleep a couple of days earlier. It seemed a reasonable explanation, since the medication was known to cause delirium in some people. The hospital psychiatrist took him off that medication and sent him back to rehab that evening with a different sleeping pill.

Back to the Hospital, Again:

Two days later, the patient was back in the emergency room. He was still seeing things that weren’t there, but now he was quite confused as well. He knew his name but couldn’t remember what day or month it was, or even what year. And he had no idea where he was, or where he had just come from.

When the medical team saw the patient after he had been admitted, he was unable to provide any useful medical history. His medical records outlined his earlier hospitalizations, and records from the nursing home filled in additional details. The patient had a history of high blood pressure, depression and alcoholism. He was on a long list of medications. And he had been confused for the past several days.

On examination, he had no fever, although a couple of hours earlier his temperature had been 100.0 degrees. His heart was racing, and his blood pressure was sky high. His arms and legs were weak and swollen. His legs were shaking, and his reflexes were very brisk. Indeed, when his ankle was flexed suddenly, it continued to jerk back and forth on its own three or four times before stopping, a phenomenon known as clonus.

His labs were unchanged from the previous visit except for his urine, which showed signs of a serious infection. A CT scan of the brain was unremarkable, as was a chest X-ray. He was started on an intravenous antibiotic to treat the infection. The thinking was that perhaps the infection was causing the patient’s confusion.

You can see the notes from that second hospital visit here.

His sister had come to visit him the next day, when he was as confused as he had ever been. He was now trembling all over and looked scared to death, terrified. He was certain he was being pursued.

That is when she confronted the nurse, demanding to know what was going on with her brother. The nurse didn’t know. No one did. His urinary tract infection was being treated with antibiotics, but he continued to have a rapid heart rate and elevated blood pressure, along with terrifying hallucinations.

Solving the Mystery:

Can you figure out why this man was so confused and tremulous? I have provided you with all the data available to the doctor who made the diagnosis. The case is not easy — that is why it is here. I’ll post the answer on Friday.

Friday Feb. 8 4:13 p.m. | Updated Thanks for all your responses. You can read about the winner at “Think Like a Doctor: A Confused and Terrified Patient Solved.”


Rules and Regulations: Post your questions and diagnosis in the comments section below.. The correct answer will appear Friday on Well. The winner will be contacted. Reader comments may also appear in a coming issue of The New York Times Magazine.

Correction: The patient’s eyes were brown, not blue.

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European Union Leaders Agree to Slimmer Budget


BRUSSELS — As European Union leaders began their 14th hour of budget negotiations after a sleepless night, Valdis Dombrovskis, the prime minister of Latvia, took the floor early Friday to address what, for his Baltic nation of around just two million people, is a vital question: Why should a Latvian cow deserve less money than a French, Dutch and even Romanian one?


In a system that requires unanimous approval of budget decisions, what Latvia wants for its dairy farmers — or Estonia for its railways, Hungary for its poorer regions and Spain for its fishermen — is no small matter. It is this cacophony of local concerns that explains why, despite the outsize role in decision-making of Germany, the European Union has such trouble reaching an agreement on something as basic as a budget.


And if simply agreeing to a basic budget — the first decrease in its history — is so daunting to member countries, it also raised serious questions about the limits of political and economic integration that have long been the master plan for champions of European unity.


After a failed attempt to fix spending targets at the summit meeting in November and a 24-hour marathon of talks this week, European leaders finally agreed late Friday to a common budget for the next seven years. Slightly smaller than its predecessor, the new budget plan reflects the climate of austerity across a continent still struggling to emerge from a crippling debt crisis.


The colossal effort that was required to agree to a sum amounting to about €960 billion, or $1.28 trillion, or a mere 1 percent of the bloc’s gross domestic product, again exposed the stubborn attachment to national priorities that have made reaching agreements on how to save the euro so painful in recent years.


“We need to agree and to agree we need to take into account all countries,” said Mr. Dombrovskis in an interview. The Latvian leader, who rushed to his hotel for a shave, shower and change of shirt in the middle of the night, described the ordeal as “not a pleasant experience,” but said “it only happens every seven years so we can tolerate it.”


But toleration is not the same thing as cooperation.


“What we’re seeing is that European integration is very important to European leaders as long as it doesn’t imply that someone has to be paying for someone else,” said Daniel Gros, director for the Center for European Policy Studies, a research organization in Brussels.


“Sharing a European budget is not going to be the essence of the E.U., but crafting the rule books for open borders and stable banking systems will be,” said Mr. Gros.


For other observers, the spectacle of European leaders haggling through the night over amounts of money representing rounding errors in their national accounts once again demonstrated their reluctance to make policies together that erode their nations’ sovereignty.


“The budget negotiations are most visible sign of member states winning and losing from the European Union,” said Hugo Brady, a senior research fellow at the Center for European Reform, a research organization. “The result is a totally parochial budget that is poorly adapted to rapidly changing times,” he said.


The deal faces yet another hurdle before it becomes law at the European Parliament, which has the power to veto the budget.


Some of the most influential figures in Parliament have already signaled that they are prepared to reject a budget that foresees spending less on Europe in the years ahead.


Martin Schulz, the president of the Parliament, said this week he would not approve a budget that ended up widening the overall gap between the cash paid up-front by governments and the somewhat higher amounts, known as commitments, which make up the overall budget.


Britain, Sweden and the Netherlands were among the Northern European nations that fought hard to squeeze agricultural subsidies and increase spending on research and development to boost the bloc’s global competitiveness.


This article has been revised to reflect the following correction:

Correction: February 8, 2013

An earlier version of this article misspelled, on one reference, the last name of the Latvian prime minister. It is Dombrovskis, not Domobrovskis.



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TSX ends lower as ECB comments weigh; BlackBerry up






TORONTO (Reuters) – Canada‘s main stock index closed slightly lower on Thursday as a wave of negative sentiment after the European Central Bank warned about weak euro zone economies pulled down energy and financial shares, offsetting a rise in BlackBerry .


The Toronto Stock Exchange‘s S&P/TSX composite index <.gsptse> unofficially ended down 5.67 points, or 0.04 percent, at 12,755.92. Four of the 10 main sectors on the index were in the red.</.gsptse>






(Reporting by John Tilak)


Gadgets News Headlines – Yahoo! News





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IHT Rendezvous: Baron Von Fancy Goes to Paris

PARIS—Baron Von Fancy’s name may belong in an 18th-century German royal court, but he is very much a 20th-century child. He’s a multimedia artist who lives in New York and surfs on the vintage-is-cool wave, using social media as his manager, agent and public relations firm.

His latest exhibition, “A Thing Called Love,” opened on Monday at the Paris Colette shop, a European mecca of all things fashionable, and runs through Feb. 23. It’s his first big break. “I’m honored to be shown in Colette. I couldn’t have asked for more,” said Baron Von Fancy, who is 28, while sipping tea in a cafe across the street from the store.

The exhibition is a collection of handpainted 1950s-looking signs of catchphrases overheard in the subway and in conversation. Some of them are poetic, some are jokes and some clichés. The theme for the show, whose run encompasses Valentine’s Day, is love. “Crazy About You,” “To the Moon and Back,” “Just Kids” (referencing Patti Smith’s book) are a few examples. He added “Bisous,” and “Loin des yeux, loin du coeur,” as a nod to his new French audience. He also redesigned Colette’s Water Bar menu and painted huge murals. The one behind the cash register reads “The Thrill Is Gone.”

Outside, along the wall, he had started painting the words Very Fancy, but the person who was supposed to help him paint was late and he didn’t have time to finish before the opening of the show. Welcome to France, Mr. Fancy.



Baron Von Fancy isn’t – surprise, surprise – his real name. He was born Gordon Stevenson, in New York, in the early 1980s, one of seven siblings and half-siblings. He is not without connections: his father, Charles Stevenson, is an investor; his stepmother is the writer Alex Kuczynski, who contributes to The New York Times. The story behind his strange but catchy moniker is a mix of many anecdotes including a nickname of an ex-girlfriend’s dog and his fancy collection of vintage Versace jeans.

Baron Von Fancy (why call him Gordon when you can call him Baron Von Fancy?) epitomizes Generation Y, also known as Generation Sell. He creates art under both names, but uses Baron Von Fancy as a brand for his more commercial art. As Gordon Stevenson, he paints, dyes waterfalls, and does light installations. When he is Baron, as he says his mother now often calls him, he does lighters, bow ties, socks and his painted signs.

Baron doesn’t whip out a battered Moleskine when he has an idea, he uses Twitter is his notebook. He tweets several times a day, to more than a thousand people, phrases that could end up on a sign in an exhibition.

His Instagram account has more than 4,000 subscribers, and serves as his PR office.

As it happens, Instagram, the photo-sharing application with  90 million users, had a key role in securing his Colette exhibition. 

Several months ago, one of Baron Von Fancy’s friends noticed a picture of a T-shirt on Colette’s Instagram account with what looked like a Baron Von Fancy sign, and notified him. He wrote to Colette’s owner Sarah Andelman and showed her a picture of his art. She agreed the brand they were selling must have copied Baron Von Fancy’s art and invited him to exhibit his work in her store.

“I can’t help but thank Instagram,” says Baron Von Fancy with a laugh. “I realize how crazy that sounds, and people may say I take Instagram too seriously, but it has done so much for me. It has changed my life.”

You can already here a vast group of people shriek and shake their heads at his statement but the fact is that today social media is the way young artists to get themselves known. 

He uses the application to share his vision and show his inspiration, but also to showcase his work.

“All I think of when I wake up in the morning is create,” he says. And although he makes a living writing sentences, he says he’s not a writer, but expresses himself visually. “I’m not very good a keeping a blog, but Instagram is a perfect way to communicate and get visibility.”

Technology has opened many opportunities for him. Through social media, he has started a collaboration with the clothing brand Patagonia (the New York art director followed his Instagram account) and a collaboration with a rapper on socks.

Although Baron Von Fancy is very much an artist of our time, his art is turned toward the past, inspired by old-school classic sign painting. “Today everyone uses computer-generated fonts,” he says, looking out the window at the Parisian store fronts, “but I think that in general there is a real movement of people who are going back to things being made by hand and with care.”

To learn the art of handmade signs, Baron Von Fancy turned toward a old Latvian man called Fred who has a sign store in Queens, New York, and who taught him his art. “I sat there and looked at how he moved his hand,” he explains.

Fred has always worked in Queens, and has no idea what Colette is. He has no idea that this show means his student plays with the big boys now. “He doesn’t even get why I use most of my catchphrases,” says Baron Von Fancy.

But that is exactly what Baron Von Fancy does, and why he’s representative of his generation. He takes something basic and old, and turns into something nostalgically new and cool. Fancy, as it were.

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Armstrong sued for $12 million bonus


AUSTIN, Texas (AP) — A Dallas promotions company sued Lance Armstrong on Thursday, demanding he repay $12 million in bonuses and fees it paid him for winning the Tour de France.


SCA Promotions had tried in a 2005 legal dispute over the bonuses to prove Armstrong cheated to win before it ultimately settled and paid him.


Armstrong recently acknowledged using performance-enhancing drugs after the U.S. Anti-Doping Agency in 2012 detailed a sophisticated doping program by his Armstrong's teams. Armstrong was stripped of his seven Tour de France victories and given a lifetime ban from sports.


Now, the company contends in its lawsuit, Armstrong and agent Bill Stapleton lied and conspired to cheat SCA out of millions. The lawsuit notes that Armstrong repeatedly testified under oath in the 2005 dispute that he did not use steroids, other drugs or blood doping methods to win, all of which he now admits to doing.


"It is time now for Mr. Armstrong to face the consequences of his actions," said the lawsuit, which demands a jury trial. "He admits he doped; he admits he bullied people; he admits he lied."


Armstrong won the Tour de France every year from 1999-2005. The SCA lawsuit seeks to recover $9.5 million in bonus money for winning the race from 2002-2004 and another $2.5 million paid to Armstrong for other costs and fees.


The lawsuit names Armstrong, Stapleton and Tailwind Sports, Inc., the team's management entity, as defendants.


Tim Herman, an attorney for Armstrong and Stapleton, did not immediately return telephone messages. Herman has previously noted that SCA previously settled its case with Armstrong and said it should not be allowed to reopen the matter.


An Armstrong spokesman referred to the original settlement signed in February 2006 by SCA President Robert Hamman and Stapleton, both for himself and Armstrong, that states "No party may challenge, appeal or attempt to set aside" the agreement, which is "fully and forever binding."


SCA counters that the case can be reopened because Armstrong's repeated lies under oath prevented it from proving he doped.


"Had SCA — or the Arbitration Panel — known the truth, the arbitration award and settlement never would have occurred," the lawsuit said.


According to the lawsuit, Stapleton and Herman both said in the original dispute that if Armstrong was to be stripped of his titles by official action, SCA would have no obligation to pay or could come after its money.


The 35-page filing also goes after Armstrong's televised interview with Oprah Winfrey last month in which he tearfully recounted having to tell his 13-year-old son the doping allegations were true.


In 2006, Armstrong told the arbitration panel that he didn't dope because he wouldn't want his son to someday follow him into a dirty sport.


"So how could I put my son into this completely dark, dirty underworld of deceit and deception would make no sense to me. I would never do that," Armstrong said, according to the lawsuit.


Separately, USADA chief executive Travis Tygart said Wednesday the agency has been in contact with him Armstrong and is giving him more time to decide if he wants to cooperate with its investigators and tell more about what he knows of doping in cycling.


USADA extended its original Wednesday deadline to Feb. 20 to work out an interview with investigators under oath.


Just two weeks ago, Herman had strongly suggested Armstrong would not be interested in talking with USADA investigators. Tygart said it was Armstrong who asked for more time.


"We understand that he does want to be part of the solution and assist in the effort to clean up the sport of cycling," Tygart said in a statement. "We have agreed to his request for an additional two weeks to work on details to hopefully allow for this to happen."


The agency has said cooperating in its cleanup effort is the only path open to Armstrong if his lifetime ban from sports is to be reduced.


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Well: The 'Monday Morning' Medical Screaming Match

I did not think I would ever see another “morbidity and mortality” conference in which senior doctors publicly attacked their younger colleagues for making medical errors. These types of heated meetings were commonplace when I was a medical student but have largely been abandoned.

Yet here they were again on “Monday Mornings,” a new medical drama on the TNT network, based on a novel by Dr. Sanjay Gupta, CNN’s chief medical correspondent and one of the executive producers of the show. Such screaming matches may make for good television, but it is useful to review why new strategies have emerged for dealing with medical mistakes.

So-called M&M conferences emerged in the early 20th century as a way for physicians to review cases that had either surprising outcomes or had somehow gone wrong. Although the format varied among institutions and departments, surgery M&Ms were especially known for their confrontations, as more experienced surgeons often browbeat younger doctors into admitting their errors and promising to never make them again.

Such conferences were generally closed door — that is, attended only by physicians. Errors were a private matter not to be shared with other hospital staff, let alone patients and families.

But in the late 1970s, a sociology graduate student named Charles L. Bosk gained access to the surgery department at the University of Chicago. His resultant 1979 book, “Forgive and Remember,” was one of the earliest public discussions of how the medical profession addressed its mistakes.

Dr. Bosk developed a helpful terminology. Technical and judgment errors by surgeons could be forgiven, but only if they were remembered and subsequently prevented by those who committed them. Normative errors, which called into question the moral character of the culprit, were unacceptable and potentially jeopardized careers.

Although Dr. Bosk’s book was more observational than proscriptive, his depiction of M&M conferences was disturbing. I remember attending a urology M&M as a medical student in which several senior physicians berated a very well-meaning and competent intern for a perceived mistake. The intern seemed to take it very well, but my fellow students and I were shaken by the event, asking how such hostility could be conducive to learning.

There were lots of angry accusations in the surgical M&Ms in the pilot episode of “Monday Mornings.” In one case, a senior doctor excoriated a colleague who had given Tylenol to a woman with hip pain who turned out to have cancer. “You allowed metastatic cancer to run amok for four months!” he screamed.

If this was what Dr. Bosk would have called a judgment error, the next case raised moral issues. A neurosurgeon had operated on a boy’s brain tumor without doing a complete family history, which would have revealed a disorder of blood clotting. The boy bled to death on the operating table. “The boy died,” announced the head surgeon, “because of a doctor’s arrogance.”

In one respect, it is good to see that the doctors in charge were so concerned. But as the study of medical errors expanded in the 1990s, researchers found that the likelihood of being blamed led physicians to conceal their errors. Meanwhile, although doctors who attended such conferences might indeed not make the exact same mistakes that had been discussed, it was far from clear that M&Ms were the best way to address the larger problem of medical errors, which, according to a 1999 study, killed close to 100,000 Americans annually.

Eventually, experts recommended a “systems approach” to medical errors, similar to what had been developed by the airline industry. The idea was to look at the root causes of errors and to devise systems to prevent them. Was there a way, for example, to ensure that the woman with the hip problem would return to medical care when the Tylenol did not help? Or could operations not be allowed to occur until a complete family history was in the chart? Increasingly, hospitals have put in systems, such as preoperative checklists and computer warnings, that successfully prevent medical errors.

Another key component of the systems approach is to reduce the emphasis on blame. Even the best doctors make mistakes. Impugning them publicly — or even privately — can make them clam up. But if errors are seen as resulting from inadequate systems, physicians and other health professionals should be more willing to speak up.

Of course, the systems approach is not perfect. Studies continue to show that physicians conceal their mistakes. And elaborate systems for preventing errors can at times interfere with getting things done in the hospital.

Finally, it is important not to entirely remove the issue of responsibility. Sad to say, there still are physicians who are careless and others who are arrogant. Even if today’s M&M conferences rarely involve screaming, supervising physicians need to let such colleagues know that these types of behaviors are unacceptable.


Barron H. Lerner, M.D., professor of medicine at New York University Langone Medical Center, is the author, most recently, of “One for the Road: Drunk Driving Since 1900.”
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DealBook: Einhorn Sues Apple Over Plan to Discard Preferred Stock

11:41 a.m. | Updated

The hedge fund magnate David Einhorn has long been known as a fervent fan of Apple. But he is making an unusually public stand to oppose a move by the company: a lawsuit.

His hedge fund, Greenlight Capital, sued Apple on Thursday in an effort to block a move that would eliminate preferred shares. In a letter to fellow stockholders, Mr. Einhorn said the move to amend the company’s charter would unnecessarily limit the technology giant’s ability to create value for shareholders and called on them for support.

“This is an unprecedented action to curtail the company’s options,” he wrote in the letter. “We are not aware of any other company that has ever voluntarily taken this step.”

The stated goal of the legal action is technical, based on an accusation that Apple is violating securities rules by bundling several shareholder initiatives in one proposal. But underneath it lies deeper dissatisfaction with the company.

Activists have taken on increasingly bigger targets in recent years, including the likes of Hess and Procter & Gamble. But no one has dared to take on the onetime darling of the hedge fund community.

The opposition by Mr. Einhorn is the latest sign of investor anger with a company whose stock price in recent years had been almost unearthly in its gains. That growth attracted Greenlight, which now holds 1.3 million shares – a stake of more than $590 million – and a wide array of hedge funds that hitched their investment performance to Apple’s rising star.

Over the last several months, however, shares in Apple have tumbled, leaving many with a sour taste in their mouths. In a letter to Greenlight investors last month, Mr. Einhorn joked that some of his fund’s stumbles were because “our apple was bruised.”

On Thursday, however, he took a more adversarial tone.

Mr. Einhorn praised Apple as “a phenomenal company filled with talented people creating iconic products that consumers around the world love.” But he expressed deep dissatisfaction over how Apple was managing its finances, complaining that the company’s enormous $137 billion cash hoard was shortchanging shareholders.

It appears that the move by Apple to eliminate preferred shares in its charter is the final straw. Mr. Einhorn said he had called upon the company to issue existing shareholders a perpetual preferred stock that would pay out a dividend. In one suggested outcome, the company would initially distribute $50 billion carrying a 4 percent annual dividend, and then issue more over time.

Mr. Einhorn said he had raised the issue with Apple executives several times, only to be rejected.

As Apple’s share price has fallen – it is down more than 26 percent over the last six months – Mr. Einhorn has said shareholders are owed more.

“The recent, severe underperformance of Apple’s shares, which are down approximately 35 percent from their peak valuation, underscores the need for the company to apply the same level of creativity used to develop revolutionary technology for its consumers to unlock the value of its strong balance sheet for its shareholders,” he wrote in the letter.

On CNBC, Mr. Einhorn likened Apple, whose near-collapse in 1997 profoundly scarred the company, to his his grandmother, who survived the Great Depression. Both have adopted tendencies to amass far more cash than they need, instead of putting it to more productive investments.

Apple is like “someone who’s gone through traumas,” the hedge fund magnate said. “They sometimes feel they can never have cash.”

Mr. Einhorn also protested that Apple was tying the preferred stock proposal to two other initiatives he supported: allowing for simple majority voting for directors and establishing a par value for common stock.

Shares in Apple were up slightly in early morning trading on Thursday, at $457.57. That remains well below its 52-week high of $705.07.

David Einhorn's Lawsuit Against Apple by

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Exclusive: Microsoft and Symantec disrupt cyber crime ring






BOSTON (Reuters) – Software makers Microsoft Corp and Symantec Corp said they disrupted a global cyber crime operation by shutting down servers that controlled hundreds of thousands of PCs without the knowledge of their users.


The move made it temporarily impossible for infected PCs around the world to search the web, though the companies offered free tools to clean machines through messages that were automatically pushed out to infected computers.






Technicians working on behalf of both companies raided data centers in Weehawken, New Jersey, and Manassas, Virginia, on Wednesday, accompanied by U.S. federal marshals, under an order issued by the U.S. District Court in Alexandria, Virginia.


They seized control of one server at the New Jersey facility and persuaded the operators of the Virginia data center to take down a server at their parent company in the Netherlands, according to Richard Boscovich, associate general counsel with Microsoft’s Digital Crimes Unit.


Boscovich told Reuters that he had “a high degree of confidence” that the operation had succeeded in bringing down the cyber crime operation, known as the Bamital botnet.


“We think we got everything, but time will tell,” he said.


The servers that were pulled off line on Wednesday had been used to communicate with what Microsoft and Symantec estimate are between 300,000 and 600,000 PCs currently infected with malicious software that enslaved them into the botnet.


The companies said that the Bamital operation hijacked search results and engaged in other schemes that the companies said fraudulently charge businesses for online advertisement clicks.


Bamital’s organizers also had the ability to take control of infected PCs, installing other types of computer viruses that could engage in identity theft, recruit PCs into networks that attack websites and conduct other types of computer crimes.


Now that the servers have been shut down, users of infected PCs will be directed to a site informing them that their machines are infected with malicious software when they attempt to search the web.


Microsoft and Symantec are offering them free tools to fix their PCs and restore access to web searches via messages automatically pushed out to victims.


The messages warn: “You have reached this website because your computer is very likely to be infected by malware that redirects the results of your search queries. You will receive this notification until you remove the malware from your computer.”


It was the sixth time that Microsoft has obtained a court order to disrupt a botnet since 2010. Previous operations have targeted bigger botnets, but this is the first where infected users have received warnings and free tools to clean up their machines.


Microsoft runs a Digital Crimes Unit out of its Redmond, Washington, headquarters that is staffed by 11 attorneys, investigators and other staff who work to help law enforcement fight financial crimes and exploitation of children over the web.


Symantec approached Microsoft about a year ago, asking the maker of Windows software to collaborate in trying to take down the Bamital operation. Last week they sought a court order to seize the Bamital servers.


The two companies said they conservatively estimate that the Bamital botnet generated at least $ 1 million a year in profits for the organizers of the operation. They said they will learn more about the size of the operation after they analyze information from infected machines that check in to the domains once controlled by Bamital’s servers.


Their complaint identified 18 “John Doe” ringleaders, scattered from Russia and Romania to Britain, the United States and Australia, who registered websites and rented servers used in the operation under fictitious names. The complaint was filed last week with a federal court in Alexandria and unsealed on Wednesday.


The complaint alleges that the ringleaders made money through a scheme known as “click fraud” in which criminals get cash from advertisers who pay websites commissions when their users click on ads.


Bamital redirected search results from Google, Yahoo and Microsoft’s Bing search engines to sites with which the authors of the botnet have financial relationships, according to the complaint.


The complaint also charges that Bamital’s operators profited by forcing infected computers to generate large quantities of automated ad clicks without the knowledge of PC users.


Boscovich said he believes the botnet originated in Russia or Ukraine because affiliated sites install a small text file known as a cookie that is written in Russian on infected computers.


The cookie file contains the Russian phrase “yatutuzebil,” according to the court filing. That can loosely be translated as “I was here,” he said.


(Reporting By Jim Finkle; Editing by Claudia Parsons)


Tech News Headlines – Yahoo! News





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IHT Special: Syria's Kurds Try to Balance Security and Alliances







ERBIL, IRAQ — Syria’s Kurds have mostly escaped prolonged bouts of direct conflict in the country’s civil war, but with rebel units pushing east toward the resource-rich Kurdish heartland, Kurdish militias proliferating and calls for greater autonomy growing, this may not remain the case.




Last summer, the Democratic Union Party, known by its Kurdish-language acronym P.Y.D., seized control of many towns and villages in the Kurdish majority northeast. The group also holds territory in a few Aleppo neighborhoods and some towns around the city.


The P.Y.D. is the most powerful Kurdish faction in Syria and has a well trained militia. This is perhaps a product of its ties to the Kurdistan Workers’ Party, or P.K.K., a guerrilla group that has been fighting for Kurdish autonomy in Turkey.


The leadership of the P.Y.D. plays down its ties to the P.K.K. But Syrian Kurds often use the names interchangeably, and P.Y.D. offices feature portraits of the imprisoned P.K.K. leader Abdullah Ocalan and Syrian P.K.K. guerrillas killed in fighting with Turkey.


Detractors of the P.Y.D. accuse it of working in collusion with the Syrian government. The party’s leadership and supporters, who say they were struggling against the government to secure rights for Syria’s two million-plus Kurds well before the uprising began in 2011, reject this allegation.


But in the complexities of Syria’s civil war, friendships are not born of common enemies.


The P.Y.D.’s militant Kurdish nationalism, which puts ethnic identity before allegiance to Syria, and their goal of some form of autonomy has put them at odds with Syria’s rebels. After decades of discriminatory policies against the Kurds under the Baath Party, the P.Y.D. is opposed to anybody but Kurds ruling their areas.


Last month, fighting flared in Ras al-Ain, which the Kurds call Serekaniye, as rebel units assaulted P.Y.D.-held areas. Dozens were killed in the fighting.


“Those groups attacking Serekaniye, we don’t consider them as Free Syrian Army,” said Saleh Muslim, the leader of the P.Y.D. Instead, he said the groups that attacked “are mainly just taking orders from the Turkish regime.”


The Free Syrian Army “is a name, or a trademark, not registered to anybody,” said Mr. Muslim. “So anybody can come from his home and get a hold of some weapons and say, ‘I am Free Syrian Army.”’


The push on Ras al-Ain, a town on the Turkish border about 300 kilometers, or 185 miles, northeast of Aleppo, could reflect a number of things: a rebel attempt to gain strategic territory, the lack of coordination among Free Syrian Army units, the spread of armed groups beyond the control of the Free Syrian Army, or the prodding of rebel groups by Turkey to confront the Kurds.


Mr. Muslim believes that Turkey, which is concerned that P.Y.D.-controlled areas along its borders could act as a base for P.K.K. attacks and has warned of intervention if it feels threatened, had something to do with the outbreak of fighting.


“I think it’s a part of the larger plan by the Turkish regime,” he said. “They want to disarm all people, to leave them without defense.”


Beyond the strategic value offered by the northeast, with its access to long stretches of the Iraqi and Turkish borders, the area is home to the majority of Syria’s oil. Before the conflict, oil exports earned Syria $4 billion per year.


The amount of oil that Syria could produce is negligible when compared with other exporters in the region, but with the economy shattered the oil fields are attractive real estate.


There are conflicting reports over who holds the main northeastern oil fields around the town of Rmeilan, though in late January a video appeared online purporting to show members of the P.Y.D.’s militia patrolling the smaller Gir Ziro field nearby.


Beyond the P.Y.D., the other notable political player in Syria’s Kurdish areas is the Kurdish National Council, a coalition of 16 parties. The parties are mostly small and have differing views, though on the whole they are more amenable to working with the mainstream Syrian opposition, which the P.Y.D. rejects.


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