Hedge fund manager Bill Ackman steps up campaign against Herbalife









Hedge fund manager Bill Ackman is stepping up his attack against Herbalife Ltd., releasing a 40-page list of questions about how the Los Angeles nutrition company does business.


Ackman, whose Pershing Square fund has a $1-billion short against Herbalife’s stock, has been campaigning against the company for nearly two months. He contends Herbalife is a pyramid scheme in which the vast majority of its independent distributors make little or no money while a scant few get rich by collecting commissions from people they recruit into the business.


On Thursday, Ackman released a list of more than 270 questions for Herbalife executives. The questions – posted on Ackman’s anti-Herbalife website – focused on many aspects of the company's business, from the serving size of its meal-replacement shake mix to whether it is complying with a 1986 injunction obtained by the California attorney general  that prohibits the company from paying commissions for recruiting.





“Herbalife executives have repeatedly committed to having a fact-based conversation and total transparency about Herbalife’s business,” Ackman said in the beginning of his open letter to the company. “Pershing Square would welcome responses to the following questions.”


Herbalife released a statement that did not address any of Ackman’s questions specifically.  


“Herbalife is a financially strong and successful global nutrition company, having created meaningful value for shareholders, significant opportunities for distributors and positively impacted the lives and health of consumers since our founding in 1980,” Herbalife said in a statement. “Pershing Square's latest tome is motivated by a reckless $1-billion short bet.” 


Herbalife has denied Ackman’s previous allegations, contending that all of the commissions it pays are based directly on sales.


A California attorney general's spokeswoman declined to say whether the office was investigating Herbalife. Earlier this week, the Federal Trade Commission disclosed that it has received more than 100 complaints about Herbalife in recent years. That agency also declined to say whether it was investigating.


A significant portion of Ackman’s questions focused on commissions distributors receive when people they have recruited into the business purchase Herbalife products.


For instance, Ackman asked, because Herbalife does not track retail sales, only sales to its independent sales force, how is it possible to award sales-based commissions?


Other questions targeted a $15-million bonus paid to a scientist who has promoted Herbalife products and marketing that implies Herbalife distributors can become millionaires by selling its vitamins, powders and drinks, when about 90% of them make little or no money.


Herbalife shares gained about 0.4% on Thursday.


ALSO:


Herbalife stock leaves investors feeling queasy


Is Herbalife planning a campaign against critic Bill Ackman?


Hedge fund manager alleges Herbalife is 'pyramid scheme'


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Boy Scouts postpone decision on admitting gays




























































































A decision on whether the Boy Scouts of America will keep its policy that excludes gay members and leaders will not be voted on until the organization's annual meeting in May.
































































IRVING, Texas -- The Boy Scouts of America decided Wednesday to put off a decision on whether to lift a national ban of gay members and leaders, saying the issue of sexual orientation was too complex and needed more time for study.


The decision to wait came after the organization recently announced that it would consider changing its policies and might allow local chapters to decide whether to admit gays as Scouts and leaders.


“After careful consideration and extensive dialog within the Scouting family, along with comments from those outside the organization, the volunteer officers of the Boy Scouts of America's National Executive Board concluded that due to the complexity of this issue, the organization needs time for a more deliberate review of its membership policy,” Deron Smith, the BSA director of public relations, said in a statement.



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  • Boy Scouts are expected to address gay ban




    Boy Scouts are expected to address gay ban







































  • Boy Scouts' opposition to background checks let pedophiles in




    Boy Scouts' opposition to background checks let pedophiles in







































  • Groups fight over Scouts' ban on gays with a petition and prayer




    Groups fight over Scouts' ban on gays with a petition and prayer



















  • “To that end, the executive board directed its committees to further engage representatives of Scouting’s membership and listen to their perspectives and concerns. This will assist the officers’ work on a resolution on membership standards,” he stated.


    The approximately 1,400 voting members of the national council will take action on the resolution at the national meeting in May in Grapevine, Texas, he said.


    It was the Scouts that put the issue back on the agenda for the current executive board meeting, held in its headquarters in Irving. But the move also came amid declining membership, questions by corporate sponsors and public pressure from activists who oppose the current national ban.


    “Today the Boy Scouts of America have chosen to remain irrelevant by delaying the vote,” said James Dale, who was expelled from the Scouts in 1990 for being openly gay. “For over 23 years, since I was expelled from the Scouts, I have held out hope that the Boy Scouts would end their discriminatory policy. With each passing day the Scouts will continue to lose members, sponsors and funding. No parent or child should associate with an organization that sends a toxic message telling children they are immoral if they are gay.”


    GLAAD, the nation's lesbian, gay, bisexual and transgender advocacy group, condemned the decision to wait.


    “An organization that serves youth and chooses to intentionally hurt dedicated young people and hard-working parents not only flies in the face of American principles, but the principles of being a Boy Scout,” GLAAD President Herndon Graddick stated.


    “The Boy Scouts of America is choosing to ignore the cries of millions, including religious institutions, current Scouting families, and corporate sponsors, but these cries will not be silenced. We're living in a culture where hurting young gay people because of who they are is unpopular and discriminatory. They had the chance to end the pain this ban has caused to young people and parents; they chose to extend the pain.”


    Those seeking to keep the ban were also vocal. A majority of the Boy Scout organizations are sponsored by local churches, many of which have religious objections to homosexuals.


    About 100 people gathered outside Boy Scouts headquarters in suburban Dallas carrying signs that said “Save our boys from homosexual acts;” “God votes no gays” and “Don't invite sin into the camp.”


    Texas Values, a conservative group that organized a prayer vigil this week in support of keeping gays out of the Scouts, said the Scouts organization was right to delay a decision.


    “It's a temporary victory,” Jonathan Saenz said of Wednesday's vote. “Good for them -- they're obviously listening. We are encouraged and we're glad they're going to delay the decision. When you deal with such fundamental principles, it's not something you want to tinker with overnight.”


    Robert Davis, 48, of Benbrook, Texas, wore his Longhorn Council Scouting uniform and brought his two sons to the protest Wednesday.


    “I think it's a good sign,” he said of the organization’s vote. “The Boy Scouts of America is one of the last moral high grounds in this country. I hate to see it die.”


    Among politicians, both President Obama and Texas Gov. Rick Perry have been part of the debate.


    “My attitude is that gays and lesbians should have access and opportunity the same way everybody else does in every institution and walk of life,” said Obama, who as U.S. president is the honorary president of BSA, in a Sunday interview with CBS.


    Perry, the author of the book “On My Honor: Why the American Values of the Boy Scouts Are Worth Fighting For,” said in a speech Saturday that “to have popular culture impact 100 years of their standards is inappropriate.”


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    Police: Concealed-carry coach who killed student is a 'victim'


    Florida judge denies request to postpone George Zimmerman trial





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    In Vegas, Abrams gives few hints about 'Star Wars'


    LAS VEGAS (AP) — A newly announced "Star Wars" sequel was on everyone's mind when J.J. Abrams took the stage Wednesday at a Las Vegas video game conference, but he made only a sideways mention of the film he has been hired to direct.


    The reference was a throw-away joke from his last franchise reboot.


    The director played a scene from his 2009 "Star Trek" film to illustrate the importance of embroidering films with subtle details, and freeze-framed on a shot of a familiar "Star Wars" robot peeking from space junk.


    "So they're looking at all the debris that's out there, and curiously, it's R2D2," he said, drawing a roar of laughter.


    Gabe Newell, president of video game developer Valve, shared a stage with Abrams at the Design, Innovate, Communicate, Entertain Summit at the Hard Rock Hotel & Casino.


    "So now I have to go back through your movies looking at all the debris to figure out what movie you're going to direct next?" Newell asked.


    Abrams has given die-hard fans few clues about his vision for the seventh live-action "Star Wars" film. He was announced as its director in January.


    The Sin City appearance left fans of The Force hungering for more insight.


    "I'd love to know who they'll focus on, what character, how far in the future it will be set, things like that," said Sadierose Schwartzmiller, 19, a comic-book creator who won her ticket to the event in an art contest.


    Abrams has made a name for himself as a trusted steward of beloved fantasy universes, directing well-received additions to the "Star Trek" and "Mission: Impossible" franchises.


    "Star Wars" creator George Lucas opened the door to the latest round of spin-offs when he sold his Lucasfilm empire to The Walt Disney Co. for $4.05 billion last fall. The company is planning three sequels and two peripheral movies focusing on characters.


    "Episode VII" is tentatively scheduled for release in the summer of 2015.


    Last month, Abrams told a group of reporters that he wanted to make sure the sequel was "something that touches people."


    On Wednesday, he did give his audience of nerds and gamers one revelation when he announced his intention to collaborate with Newell — the man behind the hit games "Portal," "Half-Life" and "Counter-Strike."


    "There's an idea that we had for a game that we'd like to develop," he said.


    Fans wanted more information on that, too.


    "If they would reveal even the genre," said Kellen Smalley, 32, a gamer. "If they would bring what J.J. does with stories to the 'Star Wars' games, it would be very fun."


    Abrams' development company, Bad Robot Interactive, has released apps related to his movies. Newell said his company would like to work with Abrams on a movie adaptation of "Portal" or "Half-Life."


    ___


    Hannah Dreier can be reached at http://twitter.com/hannahdreier


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    Personal Health: Effective Addiction Treatment

    Countless people addicted to drugs, alcohol or both have managed to get clean and stay clean with the help of organizations like Alcoholics Anonymous or the thousands of residential and outpatient clinics devoted to treating addiction.

    But if you have failed one or more times to achieve lasting sobriety after rehab, perhaps after spending tens of thousands of dollars, you’re not alone. And chances are, it’s not your fault.

    Of the 23.5 million teenagers and adults addicted to alcohol or drugs, only about 1 in 10 gets treatment, which too often fails to keep them drug-free. Many of these programs fail to use proven methods to deal with the factors that underlie addiction and set off relapse.

    According to recent examinations of treatment programs, most are rooted in outdated methods rather than newer approaches shown in scientific studies to be more effective in helping people achieve and maintain addiction-free lives. People typically do more research when shopping for a new car than when seeking treatment for addiction.

    A groundbreaking report published last year by the National Center on Addiction and Substance Abuse at Columbia University concluded that “the vast majority of people in need of addiction treatment do not receive anything that approximates evidence-based care.” The report added, “Only a small fraction of individuals receive interventions or treatment consistent with scientific knowledge about what works.”

    The Columbia report found that most addiction treatment providers are not medical professionals and are not equipped with the knowledge, skills or credentials needed to provide the full range of evidence-based services, including medication and psychosocial therapy. The authors suggested that such insufficient care could be considered “a form of medical malpractice.”

    The failings of many treatment programs — and the comprehensive therapies that have been scientifically validated but remain vastly underused — are described in an eye-opening new book, “Inside Rehab,” by Anne M. Fletcher, a science writer whose previous books include the highly acclaimed “Sober for Good.”

    “There are exceptions, but of the many thousands of treatment programs out there, most use exactly the same kind of treatment you would have received in 1950, not modern scientific approaches,” A. Thomas McLellan, co-founder of the Treatment Research Institute in Philadelphia, told Ms. Fletcher.

    Ms. Fletcher’s book, replete with the experiences of treated addicts, offers myriad suggestions to help patients find addiction treatments with the highest probability of success.

    Often, Ms. Fletcher found, low-cost, publicly funded clinics have better-qualified therapists and better outcomes than the high-end residential centers typically used by celebrities like Britney Spears and Lindsay Lohan. Indeed, their revolving-door experiences with treatment helped prompt Ms. Fletcher’s exhaustive exploration in the first place.

    In an interview, Ms. Fletcher said she wanted to inform consumers “about science-based practices that should form the basis of addiction treatment” and explode some of the myths surrounding it.

    One such myth is the belief that most addicts need to go to a rehab center.

    “The truth is that most people recover (1) completely on their own, (2) by attending self-help groups, and/or (3) by seeing a counselor or therapist individually,” she wrote.

    Contrary to the 30-day stint typical of inpatient rehab, “people with serious substance abuse disorders commonly require care for months or even years,” she wrote. “The short-term fix mentality partially explains why so many people go back to their old habits.”

    Dr. Mark Willenbring, a former director of treatment and recovery research at the National Institute for Alcohol Abuse and Alcoholism, said in an interview, “You don’t treat a chronic illness for four weeks and then send the patient to a support group. People with a chronic form of addiction need multimodal treatment that is individualized and offered continuously or intermittently for as long as they need it.”

    Dr. Willenbring now practices in St. Paul, where he is creating a clinic called Alltyr “to serve as a model to demonstrate what comprehensive 21st century treatment should look like.”

    “While some people are helped by one intensive round of treatment, the majority of addicts continue to need services,” Dr. Willenbring said. He cited the case of a 43-year-old woman “who has been in and out of rehab 42 times” because she never got the full range of medical and support services she needed.

    Dr. Willenbring is especially distressed about patients who are treated for opioid addiction, then relapse in part because they are not given maintenance therapy with the drug Suboxone.

    “We have some pretty good drugs to help people with addiction problems, but doctors don’t know how to use them,” he said. “The 12-step community doesn’t want to use relapse-prevention medication because they view it as a crutch.”

    Before committing to a treatment program, Ms. Fletcher urges prospective clients or their families to do their homework. The first step, she said, is to get an independent assessment of the need for treatment, as well as the kind of treatment needed, by an expert who is not affiliated with the program you are considering.

    Check on the credentials of the program’s personnel, who should have “at least a master’s degree,” Ms. Fletcher said. If the therapist is a physician, he or she should be certified by the American Board of Addiction Medicine.

    Does the facility’s approach to treatment fit with your beliefs and values? If a 12-step program like A.A. is not right for you, don’t choose it just because it’s the best known approach.

    Meet with the therapist who will treat you and ask what your treatment plan will be. “It should be more than movies, lectures or three-hour classes three times a week,” Ms. Fletcher said. “You should be treated by a licensed addiction counselor who will see you one-on-one. Treatment should be individualized. One size does not fit all.”

    Find out if you will receive therapy for any underlying condition, like depression, or a social problem that could sabotage recovery. The National Institute on Drug Abuse states in its Principles of Drug Addiction Treatment, “To be effective, treatment must address the individual’s drug abuse and any associated medical, psychological, social, vocational, and legal problems.”

    Look for programs using research-validated techniques, like cognitive behavioral therapy, which helps addicts recognize what prompts them to use drugs or alcohol, and learn to redirect their thoughts and reactions away from the abused substance.

    Other validated treatment methods include Community Reinforcement and Family Training, or Craft, an approach developed by Robert J. Meyers and described in his book, “Get Your Loved One Sober,” with co-author Brenda L. Wolfe. It helps addicts adopt a lifestyle more rewarding than one filled with drugs and alcohol.

    This is the first of two articles on addiction treatment.

    Read More..

    Postal Service plan to end Saturday delivery likely to affect business




























































































    The financially struggling U.S. Postal Service said it will stop delivering mail on Saturdays but continue to disburse packages six days a week.






























































    The U.S. Postal Service's announcement that it plans to stop delivering most mail on Saturdays is likely to have an effect on the business world.


    The Postal Service said it made the announcement Wednesday -- about six months in advance of implementing a five-day mail delivery schedule on Aug. 5 -- to give residential and business customers time to plan and adjust.


    Hallmark Card Inc., the Kansas City-based greeting card company, said it anticipated problems with the decision. 



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    "Hallmark continues to believe a reduction in service will not induce customer loyalty and will negatively impact small towns and small businesses that depend on timely, affordable, reliable mail delivery," the company said. "This move should only be considered once all other cost-saving options are fully explored and acted upon."


    QUIZ: Test your knowledge about the debt limit


    Online retailer Amazon.com said it was not worried about the announcement's effect on its business.


    "We use multiple carriers in all of our geographies to ensure we are delivering products to customers on time," said Scott Stanzel, a company spokesman.


    Netflix Inc., the Los Gatos, Calif.-based DVD-by-mail company, would not comment on the announcement, but has said in the past that it needs to have a healthy postal service.


    The Postal Service's announcement came with proviso: Six-day-a-week delivery of packages will continue, allowing the agency to stay competitive with other carriers, said Postmaster General Patrick R. Donahoe.


    The Postal Service said there has been recent strong growth in package delivery -- a 14% increase since 2010. It projects continued strong growth in that service through the coming decade as an increasing number of big retailers join online companies such as Amazon in selling their wares online.


    "Our customers see strong value in the national delivery platform we provide and maintaining a six-day delivery schedule for packages is an important part of that platform," Donahoe said. "As consumers increasingly use and rely on delivery services -- especially due to the rise of e-commerce -- we can play an increasingly vital role as a delivery provider of choice, and as a driver of growth opportunities for America's businesses."


    Wall Street first-glance reaction was a bit of good news for other delivery services: United Parcel Service Inc.'s shares were up 2 cents, or .02%, to $80.82. FedEx Corp.'s shares were up 69 cents, or .7%, to $105.76.


    In a statement, FedEx spokesman Jess Bunn said: "While it is too early to say precisely what the eventual impact to FedEx would be from the U.S. Postal Service's proposed Saturday delivery changes, it appears the effect would be minimal. FedEx has an outstanding business relationship with the USPS, both as a customer and a supplier, and looks forward to its continuation."


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    BP says gulf states are seeking more than $34 billion in claims


    Nasdaq reportedly in settlement talks over flubbed Facebook IPO


    Airline says Boeing 787 grounding will affect more 100,000 passengers; cancel 1,200 flights





    Read More..

    Obama urges short-term solution to prevent steep budget cuts









    WASHINGTON – President Obama on Tuesday called on Congress to come up with short-term spending cuts and revenue increases that would stave off more drastic cuts set to take effect in March.


    In a brief appearance in the White House briefing room, Obama asked lawmakers to come up with a quick fix that would postpone the automatic cuts and their "devastating" effects on the economy.


    The economy is in recovery, Obama said, but that won’t continue if there are “self-inflicted wounds” caused by elected officials. 








    The economy shouldn’t be at risk “just because folks in Washington couldn’t come together to eliminate a few special-interest tax loopholes or government programs that we agreed need some reform,” he said.


    PHOTOS: President Obama’s past


    The president said he still wants to deal with deficits over the longer term, but that he doesn’t want to see workers laid off and critical programs lapse while Congress works its way to a more broad-based budget solution.


    When the automatic cuts were first devised in 2011, the $1.2-trillion in so-called sequester cuts were intentionally designed to be severe. Lawmakers on all sides believed they would force Congress to come up with a better alternative for deficit reduction.


    But the deadline is drawing close and the sides are nowhere near a permanent solution. Democrats want to exchange the pending across-the-board cuts for tax revenue generated in part by ending tax breaks for oil and gas companies.


    Republicans, meanwhile, see the looming sequester as one of their best chances to exact steep spending cuts. They want to steer away from reductions at the Pentagon and toward Medicare, food stamps and other domestic programs.


    PHOTOS: President Obama’s second inauguration


    Sen. Mitch McConnell of Kentucky, the Republican minority leader, calls the Democrats' ideas “gimmicks.” House Speaker John A. Boehner (R-Ohio) argues that the public doesn’t support the idea of raising taxes in place of cutting spending.


    “The president’s sequester should be replaced with spending cuts and reforms that will start us on the path to balancing the budget in 10 years,” Boehner said.


    Speaking to reporters, Obama said he believes “modest reforms” in social insurance programs would eventually have to be paired with tax reform.


    For the moment, he said, it appears a full budget “may not be finished” before the automatic cuts kick in. Congress can’t let that happen, he said.


    QUIZ: Test your knowledge about the debt limit


    “If Congress can’t act immediately on a bigger package,” he said, “they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months.”


    After that, he said, the two sides can work together to replace cuts with a “smarter solution.”


    Follow Politics Now on Twitter and Facebook


    christi.parsons@latimes.com


    lisa.mascaro@latimes.com


    Twitter: @cparsons and @lisamascaroindc





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    Brown's attorney calls DA's report scurrilous


    LOS ANGELES (AP) — Chris Brown's attorney says a motion seeking to revoke the singer's probation is shameful and he intends to seek sanctions against prosecutors because it is defamatory.


    Mark Geragos says the Los Angeles district attorney's office has ignored sworn statements by police in Virginia that Brown's community service was supervised. He says he intends to seek sanctions against the prosecutor's office at a hearing Wednesday.


    Geragos called the motion "shameful and a disgrace."


    Prosecutors filed a motion Tuesday claiming that there's no credible evidence that the R&B singer performed six months of community labor in Virginia as ordered by a court after he pleaded guilty to assaulting Rihanna in 2009.


    Geragos says the motion essentially calls everyone in the Richmond Police Department a liar, and that should not be allowed.


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    SciTimes Update: Recent Developments in Science and Health News


    Red Bull Stratos/European Pressphoto Agency


    Felix Baumgartner of Austria jumps from 24 miles up in Roswell, New Mexico.







    Tuesday in science, sharks with an image problem, good teeth get more dates, dog geniuses and remembering your dreams. Check out these headlines and other science news from around the Web.




    Supersonic Skydiver: Skydiver Felix Baumgartner was faster than he or anyone else thought during his record-setting jump last October from 24 miles up. The Austrian parachutist known as “Fearless Felix” reached 843.6 mph, reports The Associated Press.


    Stress Through Generations: For the first time, genes chemically silenced by stress during life have been shown to remain silenced in eggs and sperm in mice, possibly allowing the effect of stress to be passed down to the next generation, reports The Washington Post.


    Man Bites Shark: A new study refutes the shark’s reputation as a bloodthirsty stalker of humans, reports Reuters. There’s no basis for believing that sharks have a taste for human flesh, the study argues. Human swimmers, often dressed in black wet suits and looking like seals, are instead mistaken for sharks’ usual prey.


    What Singles Want: Good teeth, grammar and humor are important to singles, a new USA Today survey reports.


    The Farmer’s Workout: Farmers -- the people counted on to feed the nation -- are facing weight gains of their own, reports Gannett News.


    Yes, They Do Windows: The Wall Street Journal reports on window-washing robots.


    Staying In: To keep patients out of the hospital, health care providers are bringing back revamped versions of a time-honored practice: the house call.


    Spill Your Secrets: Teenagers who share their secrets in confidence with parents and friends have fewer headaches and depressed moods and are more confident in social situations than those who keep secrets to themselves, according to a report in The Journal of Adolescence.


    Drilling on Mars: NASA’s Curiosity rover, the S.U.V.-sized robot exploring Mars, is getting ready to spin its drill bit for the first time, reports The Christian Science Monitor.


    Couch Potatoes: Men who watch a lot of television have lower sperm counts than those who don’t watch any, reports ScienceNews.org.


    Dream a Little Dream: Anyone who has ever awoken feeling amazed by their night’s dream only to forget its contents by the time they reach the shower will understand the difficulties of studying such an ephemeral state of mind, reports New Scientist.


    Smart Dogs: Scientific American explores the science of dog intelligence.


    Read More..

    California accuses S&P of deception in $4-billion lawsuit









    California has filed suit against Wall Street's biggest credit rating agency, Standard & Poor’s, charging the firm with violating the state's False Claims Act by using “magic numbers” and “guesses” to inflate ratings that ultimately cost California public pension funds an estimated $1 billion.


    The action was filed Tuesday in San Francisco Superior Court and came a day after federal prosecutors filed suit against the bond-rating agency, alleging that S&P gave top marks to troubled mortgage-backed securities that later failed, helping to trigger the financial crisis.


    Document: U.S. Sues Standard & Poor’s over mortgage bond ratings





    California will seek $4 billion in damages after S&P’s ratings cost state pension funds what it estimates are about $1 billion in losses. The state can seek triple damages, along with penalties, under the False Claims Act.


    “Those who lost homes in California were first-grade teachers, firefighters ... we talk about the impact of S&P’s conduct, it’s profound,” Atty. Gen. Kamala D. Harris told the Times in Washington after a news conference there announcing the federal and state suits. “They pretended to be an independent agency and we believe the evidence is clear it was quite the contrary.”


    The barrage of state and federal actions signal an aggressive new push against one of the mortgage crisis’ key actors. The California action is the first use of its False Claims Act by Harris to pursue a major player in the mortgage meltdown. Harris in 2011 created a mortgage fraud strike force to pursue investigations related to the housing crisis and said she would use her powers under the act to pursue securities cases.


    Under the state law, which makes it a crime to defraud the state, damages of up to three times the amount of the claim can be awarded if the victim was an institutional investor, such as one of the state's pension funds. In particular, the California Public Employees' Retirement System and the California State Teachers' Retirement System invested heavily in mortgage-backed securities and other financial instruments rated by S&P during the boom years.


    S&P, which is a unit of publisher McGraw Hill, on Tuesday denounced the state and federal actions.


    “The [U.S. Department of Justice] and some states have filed meritless civil lawsuits against S&P," the company said in a statement. "We will vigorously defend S&P against these unwarranted claims.  S&P has always been committed to serving the interests of investors and all market participants by providing independent opinions on creditworthiness based on available information."


    The California suit alleges that investors relied on S&P to rate securities because these big investors had access to only general descriptions of the mortgages and other investments backing these securities. Institutional investors relied on S&P because they were required to purchase investments that got a “AAA” rating, meaning they were highly sound and bore little risk.


    While S&P has tried in other cases to argue that it was protected under the 1st Amendment to state an opinion about certain financial products, that argument may not hold up if federal or state investigators are able to prove that the ratings agency knowingly gave improper evaluations, said Kurt Eggert, a Chapman University law professor.


    “I am not sure that defense will hold if California or the feds can prove that they knowingly did not provide effective ratings,” Eggert said. “If the feds and the states can show that the ratings agencies knowingly diverged from their system in order to make money, the 1st Amendment defense might crumble.”


    The California suit alleges that, from 2004 to 2007, S&P misrepresented to the state pension funds that its ratings were not influenced by economic interests and were based solely on objective analysis. Instead, the company lowered its standards to make money, the suit alleges, and suppressed efforts to develop more accurate models.


    ALSO:


    Justice Department sues S&P over mortgage bond ratings


    Boeing asks FAA for OK to begin 787 Dreamliner test flights


    California sues BP and Arco, alleges violations at gas stations


    Times staff writer Jim Puzzanghera in Washington contributed to this report.





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    Suspected child molester left L.A. archdiocese for L.A. schools









    A former priest and suspected child molester left employment with the Los Angeles archdiocese to work for the L.A. Unified School District, officials confirmed Sunday.


    The former clergyman, Joseph Pina, did not work with children in his school district job, L.A. schools Supt. John Deasy said. He added that, as a result of the disclosures, Pina would no longer be employed by the nation's second-largest school system.


    Over the weekend, Deasy was unable to pull together Pina's full employment history, but said the district already was looking into the matter of Pina's hiring.





    "I find it troubling," he said of the disclosures about Pina. "And I also want to understand what knowledge that we had of any background problems when hiring him, and I don't yet know that."


    L.A. Unified itself has come under fire in the last year for its handling of employees accused of sexual misconduct.


    Pina, 66, was laid off from his full-time district job last year, but returned to work episodically to organize events. One event he may have helped organize was a ribbon-cutting Saturday for a new education facility. School district officials over the weekend, however, could not confirm that. Pina did not attend the event, and the district could not confirm payment for any help he may have provided.


    Pina's name emerged in documents released by the archdiocese to comply with a court order. His case was one of many in which church officials failed to take action to protect child victims and in which first consideration was given to helping the offending priests rather than their victims, according to the documentation.


    A just-released, internal 1993 psychological evaluation states that Pina "remains a serious risk for acting out." The evaluation recounts how Pina was attracted to a victim, an eighth-grade girl, when he saw her in a costume.


    "She dressed as Snow White ... I had a crush on Snow White, so I started to open myself up to her," he told the psychologist. "I felt like I fell in love with her. I got sexually involved with her, but never intercourse. She was about 17 when we got involved sexually, and it continued until she was about 19."


    In a report sent to a top Mahony aide, the psychologist expressed concern the abuse was never reported to authorities.


    Pina's evaluation also includes a recommendation "to take appropriate measures and precautions to insure that he is not in a setting where he can victimize others." Pina continued to work as a pastor as late as March 1998.


    School district officials could not verify Pina's hiring date over the weekend, but he took a job with L.A. Unified as the school system was carrying out the nation's largest school construction program. His job involved community outreach, building support for school projects, while also finding out communities' concerns and trying to address them, officials said. Such work was crucial to the program, because even though communities wanted new schools, their locations and other elements could prove controversial. Such projects frequently involved tearing down homes or businesses, environmental cleanups, and the blocking of streets and other disruptions.


    "His duties were to rally community support and elicit community comments regarding schools in a neighborhood," district spokesman Tom Waldman said.


    Pina's work did bring him into contact with families, frequently at public meetings organized to hear and address their concerns.


    Projects that Pina worked on included a new elementary school in Porter Ranch and a high school serving the west San Fernando Valley, Waldman said. The high school, in particular, generated substantial public debate as a district team and a local charter school competed aggressively for control of the site.


    The $19.5-billion building program is winding down, and, as a result, many jobs attached to it have come to an end. Pina's was among them.


    The dedication he may have helped organize Saturday was for the Richard N. Slawson Southeast Occupational Center in Bell. Participants told KCET-TV, which first reported Pina's school employment, that he had assisted with community outreach on that project. The adult education and career technical education facility has 29 classrooms as well as health-career labs and child care for students. The school opened in August 2012.


    Pina "was slated for some additional temporary work when the issue came to our attention last week and that work was canceled," Deasy said.


    It may have been Pina who first alerted district officials that his name appeared in disclosed documents, Deasy said. Pina called a senior administrator in the facilities division. So far, no untoward issues have emerged regarding Pina's work for L.A. Unified.


    howard.blume@latimes.com





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