Hostess CEO: Why I’m Shutting Down Twinkies

I made the decision to liquidate Hostess last night (Nov. 15). A number of factors have contributed to this. Hostess is 93 percent unionized, and it’s been formed by a number of acquisitions over the decades; a lot of old rules were just grandfathered into contracts from companies that no longer exist. There were all these crazy work rules, like one driver can only drive cake and the other can only drive bread. Hostess went through bankruptcy in 2004 and not enough work was done in that filing to deal with these issues.

I hear that the push toward healthier food is what did us in, but that hasn’t affected us at all. Why do you have chocolate companies? How do you explain doughnut shops when doughnuts haven’t changed in 100 years? We were north of $ 2 billion a year in sales. They weren’t the problem, our cost structure was.

I came on board at Hostess in February, and I was stunned by how little had been accomplished. We managed to make a deal with the Teamsters but the bakers didn’t support what they’d agreed to. I told them that if there’s going to be a strike over the negotiations, we won’t be able to withstand it and we have to liquidate. But I don’t think they believed us. We had 36 Hostess plants when the strike started two weeks ago, but we immediately closed three, so we only had 33 left. Bakers were crossing the picket line in some numbers but not enough to keep things going. Last night I got the update: 11 plants still weren’t operating. After that I communicated with my board and made the decision. That was a difficult call to make. I had people on that call who’d been working 20 hours a day at these plants, trying to make enough product to keep them on the shelves.

I look at this as a failure. I’ve spent a lot of time wondering why we didn’t make more progress. I’m a turnaround guy, I’m a pretty optimistic guy. I don’t think this was the inevitable end. We had a shot at surviving, but we couldn’t overcome the strike. We have potential buyers for our brands and we’ll contact them, but I haven’t even thought about that yet. We sent everyone home from the plants. That’s 18,500 people out of work. — As told to Claire Suddath

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Cricket-Australia v South Africa – second test scoreboard

ADELAIDE, Nov 24 (Reuters) – Scoreboard at the close of the

third day of the second test between Australia and South Africa

at Adelaide Oval on Saturday:

Australia won the toss and chose to bat

Australia first innings 550

South Africa first innings

G. Smith c Wade b Siddle 122

A. Petersen run out 54

H. Amla st Wade b Warner 11

J. Rudolph c Quiney b Lyon 29

AB de Villiers lbw b Siddle 1

F. du Plessis c Clarke b Hilfenhaus 78

D. Steyn c Ponting b Hilfenhaus 1

R. Kleinveldt b Hilfenhaus 0

J. Kallis c Wade b Clarke 58

M. Morkel b Lyon 6

I. Tahir not out 10

Extras (b-7, lb-2, w-3, nb-6) 18

Total: (all out, 124.3 overs) 388

Fall of wickets: 1-138 2-169 3-233 4-233 5-240 6-246 7-250

8-343 9-352 10-388

Bowling: B. Hilfenhaus 19.3-6-49-3, J. Pattinson 9.1-0-41-0

(nb-4, w-1) N. Lyon 44-7-91-2, P. Siddle 30.5-6-130-2 (nb-2), M.

Clarke 7-1-22-1, M. Hussey 1-0-7-0 (w-2), D. Warner 5-0-27-1, R.

Quiney 8-3-12-0

Australia second innings

D. Warner c Du Plessis b Kleinveldt 41

E. Cowan b Kleinveldt 29

R. Quiney c De Villiers b Kleinveldt 0

R. Ponting b Steyn 16

M. Clarke not out 9

P. Siddle c De Villiers b Morkel 1

M. Hussey 5

Extras (lb-7, nb-3) 10

Total (for five wickets, 32 overs) 111

Fall of wickets: 1-77 2-77 3-91 4-98 5-103

Still to bat: M. Wade, B. Hilfenhaus, J. Pattinson, N. Lyon.

Bowling: Steyn 10-4-28-1, Morkel 9-2-24-1, Kleinveldt

6-1-14-3 (nb-2), Tahir 7-1-38-0 (nb-1)

- -

Third test: WACA, Perth Nov. 30-Dec. 4

(Compiled by Ian Ransom; Editing by Alastair Himmer)

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Ang Lee talks about risks, spirituality of “Life of Pi”

NEW YORK (Reuters) – Gay cowboy drama “Brokeback Mountain” may have been considered a risky film to make, but director Ang Lee said his new movie, “Life of Pi,” a 3D exploration of faith about a boy stranded on a boat with a Bengal tiger, is his riskiest yet.

The film, which was released in U.S. theaters this week, is adapted from Yann Martel‘s best-selling novel of the same name and was once considered impossible to make.

Oscar-winning Taiwanese director Lee, 58, took on the laborious task of using computer-generated imagery to bring the sensational plot to the big screen, taking a year and a half just to edit the film together.

The director talked to Reuters about the film’s themes, technical barriers and casting an unknown actor in the lead.

Q. Why was “Life of Pi” considered unfilmable?

A. “Because you cannot make the tiger do everything you want to do, you have to use digital. A digital animal, up until two years ago, was not totally realistic yet, let alone in 3D, and then water is pretty difficult.”

Q. Was this your most difficult filming experience yet?

A. “Oh yes. And it was also the longest…there was the technical difficulty and then it is a big movie. And it was across continents, I finally decided to shoot most of it in Taiwan, but we also had to go to India to shoot for two to three weeks. Because you can’t fake Pondicherry, and Munnar. And then we have scenes in Canada.”

Q. But Brokeback Mountain was a risky film too?

A. “No, that wasn’t for me. At least when I made it, I thought it was strictly arthouse and few people would see it. And it’s a lot cheaper (to make). So I didn’t care…And then I got nervous, ‘Oh they are going to lynch me, making a gay cowboy movie, that will go into a shopping mall.’”

Q. It was only after you made it you realized that?

A. “Yes, I was afraid. I was looking around when I walked, when I would go home, to see if anybody was following me. Once it hit the shopping mall I was nervous, actually. My brother is a distributor in Taiwan and I told him not to buy it. He hates me to this day, he is still babbling about it.”

Q. Why choose unknown Suraj Sharma to play Pi?

A. “I wanted someone authentic, and no bad habits, that means you have to train them from the start. “

Q. Why did you replace Tobey Maguire and reshoot his scenes with the little-known Rafe Spall?

A. “It was a small part, and he is a big movie star. He is a good old friend of mine and he would do this for nothing, for me. But he is not doing anything (in the role), he is just sitting there listening most of the time. It becomes a little distracting I think.”

Q. How does the film explore spirituality?

A. “To me, faith can be elusive, but .. As a Taoist would say, ‘That’s the apple’s truth.’ The source of all the material comes from nothingness, illusion is working more on things you can prove. That’s the principle, the essence of life, it is actually an illusion, not immaterial. That’s worth pursuing. So illusion is not nothing. In a way, that is the truth.”

“Sometimes I feel (illusions) are more of life’s essence, I can trust them more than real life that is full of deceit and covering up.”

Q. Did exploring faith encourage you to make this?

“The book is fascinating, it talks about faith. But it didn’t make me believe in God or anything…I didn’t go to church or a temple after that. When I started making the movie, you do feel faith embody you and carry you through. But when I picked the subject, and chose to do the book, it was actually more storytelling in my mind. The value of storytelling. How people share a story. Because a story has structure, it has a beginning, middle and end. It seems to have meaning, where life has not.”

Q. Do you practice any religion?

A. “No, my mother is a baptized Christian, so she made me go to church every Sunday, and I prayed four times a day until I was 14. And at lunchtime kids at school would giggle at my praying…I stopped praying. And two weeks later, nothing happened to me, so I didn’t pick it up again.”

“I am not particularly religious. But I think we do face the question of where God is, why we are created and where does life go, why we exist. That sort of thing. And it is very hard to talk about it these days, because it cannot be proven. It is hard to discuss it rationally.”

Q. Do you consider yourself spiritual?

A. “I hate to think life is just facts and laws. And I am a filmmaker, I am a sensitive person, I like to think it is spiritual, so I like people to be more in that way. I think life without spirit is in the dark, it is absurd. Call it illusion or call it faith, whatever you call it, we have emotional attachment to the unknown. We yearn to find out. That is human nature. It can be, in a way, unrequited love, we don’t know. I don’t have a particular God I pray to, except sometimes a movie god.” (laughs)

(Reporting by Christine Kearney, editing by Piya Sinha-Roy and Andrew Hay)

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Four new cases of SARS-like virus found in Saudi, Qatar

LONDON (Reuters) – A new virus from the same family as SARS which sparked a global alert in September has now killed two people in Saudi Arabia, and total cases there and in Qatar have reached six, the World Health Organisation said.

The U.N. health agency issued an international alert in late September saying a virus previously unknown in humans had infected a Qatari man who had recently been in Saudi Arabia, where another man with the same virus had died.

On Friday it said in an outbreak update that it had registered four more cases and one of the new patients had died.

“The additional cases have been identified as part of the enhanced surveillance in Saudi Arabia (3 cases, including 1 death) and Qatar (1 case),” the WHO said.

The new virus is known as a coronavirus and shares some of the symptoms of SARS, or Severe Acute Respiratory Syndrome, which emerged in China in 2002 and killed around a 10th of the 8,000 people it infected worldwide.

Among the symptoms in the confirmed cases are fever, coughing and breathing difficulties.

Of the six laboratory-confirmed cases reported to WHO, four cases, including the two deaths, are from Saudi Arabia and two cases are from Qatar.

Britain’s Health Protection Agency, which helped to identify the new virus in September, said the newly reported case from Qatar was initially treated in October in Qatar but then transferred to Germany, and has now been discharged.

Coronaviruses are typically spread like other respiratory infections, such as flu, travelling in airborne droplets when an infected person coughs or sneezes.

The WHO said investigations were being conducted into the likely source of the infection, the method of exposure, and the possibility of human-to-human transmission of the virus.

“Close contacts of the recently confirmed cases are being identified and followed-up,” it said.

It added that so far, only the two most recently confirmed cases in Saudi Arabia were epidemiologically linked – they were from the same family, living in the same household.

“Preliminary investigations indicate that these two cases presented with similar symptoms of illness. One died and the other recovered,” the WHO’s statement said.

Two other members of the same family also suffered similar symptoms of illness, and one died and the other is recovering. But the WHO said laboratory test results on the fatality were still pending, and the person who is recovering had tested negative for the new coronavirus.

The virus has no formal name, but scientists at the British and Dutch laboratories where it was identified refer to it as “London1_novel CoV 2012″.

The WHO urged all its member states to continue surveillance for severe acute respiratory infections.

“Until more information is available, it is prudent to consider that the virus is likely more widely distributed than just the two countries which have identified cases,” it said.

(Editing by Alison Williams)

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Japanese Stocks? Yes, They Really Think So

Less than a quarter-century ago, Japan was the economic envy of the world. In 1989, Tokyo-listed shares represented nearly half the planet’s equity value, while the land beneath the city’s royal palace was worth more than all of California. American nightly news anchors practically misted up when they had to report that Rockefeller Center was turning Japanese.

Two lost decades and massive property- and stock-bubble explosions later, Japan is a one-word cautionary tale. Caught in economic and demographic atrophy—and stewarded by countless false-start prime ministers—the country has become a hub for zombie banks, a generation of disenchanted youth, and fading brands such as Sony (SNE), Sharp (6753:JP), and Panasonic (PC).

Last year, for the first time, sales of adult diapers in Japan exceeded those for babies. Factor in how the strong yen has been making the country’s critical exports more expensive, and you can see why the world’s No. 3 economy (recently pushed into third place by China) has been quicksand for investors; when international markets hit bottom in early 2009, Japan’s Nikkei slumped to levels it hadn’t seen since 1983. A Merrill Lynch survey of global fund managers discovered that their net exposure to Japan is at its lowest in a decade (subscription necessary).

Accordingly, in his Nov. 14 note, “The Sun Also Rises?”, James Hunt, portfolio manager of Tocqueville’s International Value Fund and a rare Japan bull, concedes: “One of the questions we are asked most often by investors is why we would invest in Japan. Normally, there is a slight tone of derision in the question, as if to say: ‘Everyone knows that Japan has poor demographics, a huge public debt and weak growth prospects.’ And of course, all of these things are true.”

Hunt says his case for Japan boils down to its deeply contrarian pull: “Everyone thinks Japan is sinking into obscurity,” he writes, “and this negative sentiment provides us with the opportunity to buy what we consider to be excellent global franchise businesses at attractive valuations.”

Noting that Japanese equities have lagged their U.S. counterparts by 25 percent over the last two years, Hunt writes, “The storm of negative factors affecting Japan combined with the poor market performance is just of the sort of situation that piques our interest.”

Over the last 12 years of economic stagnation, Japan’s Nikkei 225 Index has, in dollar terms, posted zero total return. Meanwhile, aggregate earnings for its profitable companies have gone from ¥438 billion ($ 5.3 billion) to ¥608 billion, while their return on equity has swelled from around 6 percent to nearly 10 percent. At the same time, notes Hunt, the price-to-earnings ratio for these profitable listings has collapsed from 24 to 15, while their dividend yield has tripled to 2.3 percent.

Of course, Japan—Nikkei, Discman, and all—could just be in the middle stages of terminal decline. Zero interest rates be damned: Jobs are scarce, deflation constantly threatens, and China and Korea are not getting any easier to compete with. Japan’s debt-to-gross domestic product ratio, now well over 200 percent, is tops in the world.

Not likely, says Hunt. “There will,” he writes, “be a moment when the broad process of [equity] de-rating has run its course. With valuation multiples having compressed to quite reasonable absolute levels, we may be approaching that moment.”

“Our discipline generally is to buy good business franchises at a discount to their intrinsic value,” he adds, “and we are not as focused as many investors on catalysts and timing for the realization of value. That being said, with expectations so low and the market having underperformed, we would not be surprised to see the sun also rise in Japan.”

Hunt isn’t alone in declaring contrarian ardor for Japan. David Herro, Morningstar’s (MORN) international stock fund manager of the decade, also thinks its risk-reward profile is increasingly attractive.

Indeed, the Nikkei has recently sprinted higher on broadening sentiment that the country’s policy makers will act forcefully to lower the yen—a development that would provide a huge boost to Japanese multinationals such as Toyota (TM), Canon (CAJ), and Fuji Heavy Industries (7270:JP). The “yen rout play” is what market bloggers are already calling the trade.

Shinzo Abe, widely viewed as frontrunner to become the next prime minister, has been calling for unlimited monetary easing to incite inflation. The current governor of the (independent) Bank of Japan, who has been criticized for not being loose enough with his monetary purse strings, is expected to step down in April.

“(Shinzo) Abe’s focus is on two things—aggressive monetary and fiscal stimulus,” wrote CLSA Japan strategist Nicholas Smith in a report. “He made clear that the Bank of Japan will bend to his will or he will rewrite the BOJ Law to let him fire them.” The replacement governor, he added, will be selected for his “willingness to print money.”

“It has been a fool’s game to guess when the yen would finally weaken,” writes Hunt, “but economic healing in the West and eventually inflation and rising interest rates here could certainly be a catalyst, as could money printing in Japan.”

It should be remembered, however, that the Bank of Japan has already shattered what is widely regarded as the ultimate monetary taboo: printing money to buy equities to boost the chronically moribund economy. To little apparent avail, so far.

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Black Friday Fiscal Cliff Twitter Guide

With the dirty dishes cleared and leftovers safely in the fridge, Americans across the country start looking ahead to the winter holidays the day after Thanksgiving.

But for Congress, there’s a pretty big hurdle to handle before the House and Senate can abscond to presents and plum pudding. It’s called the fiscal cliff, and according to a recent Pew Research Poll , more Americans are paying attention to it than the scandal surrounding Gen. David Petraeus‘ resignation.

While talks and deals on budget cuts and tax increases are currently on hold, once the holiday weekend ends, it’s time to take to Twitter and follow these folks to learn what’s at stake, where each party stands and whether to expect a bipartisan deal for the new year.

Subscribe to the list on @OtusNews here.

Follow Tweeters in the House

These partisan tweeters should give a good idea of where things stand on the House side of Capitol Hill.

@SpeakerBoehner - The official Twitter account for the speaker of the House commends Republican representatives for their work on the fiscal cliff negotiations and retweets relevant articles with a GOP slant. Last Friday, a tweet from the account said, “Survey shows Americans favor GOP approach to averting #fiscalcliff http://j.mp/SsmYJT ” To see more of Boehner’s opinions on the issue and read about his meetings with key players, follow his personal account: @ JohnBoehner .

@NancyPelosi – While the House minority leader has kept her thoughts on the fiscal cliff away from Twitter for now, Pelosi expressed strong sentiments on the need for higher taxation of wealthy Americans in her interview with ABC’s Martha Raddatz Sunday. Pelosi will be a tweeter to watch as options come on and off the table – she’s a good gauge for how the rest of the party will vote.

@RepPaulRyan – The budget hawk has stayed out of the spotlight since losing the vice presidency earlier this month, but as chairman of the House Budget Committee, it’s unlikely Ryan will resist for long when spending cuts are in sight. The former VP nominee’s other Twitter account, @PaulRyanVP , spent a lot of time tweeting about the need for pro-growth policies and the reduction of government debt. Keep an eye on Ryan’s congressional account to see if those positions will factor into the negotiations this time around.

@ChrisVanHollen – As a ranking member on the House Budget Committee, Rep. Van Hollen, D-Md., has tweeted a photo of him discussing the fiscal cliff, a video of his interview on it and vitriolic attacks with the hashtag #DoNothingGOP.

Tweeters in the Senate

Ranking senators on the fiscal cliff aren’t as inclined to tweet as their House counterparts, but here is a couple to keep in your newsfeed.

@ChuckGrassley - The Republican senator from Iowa doesn’t tweet many links or videos, but he is outspoken in his digital opinions. “PresObama meets w Congressional leaders tomorrow. I hope it is a serious attempt by PresO to reach bipartisan agreement not a photo op 4tax,” Grassley tweeted Nov. 15. In addition to 140-character diatribes on the fiscal cliff, use Grassley’s feed to learn about deer hunting, the History Channel and University of Northern Iowa football.

@SenJohnMcCain – The outspoken former presidential candidate will be one to watch throughout these negotiations. In addition to offering news on foreign affairs and the state of the nation’s finances, McCain adds humor, tweeting a little pre-emptively last weekend , “Twinkies maker Hostess closes – what will we do without deep fried Twinkies at the #Iowa State Fair?”

Organizations and Think Tanks

@BudgetHawks – The handle for the Committee for a Responsible Federal Budget gives you an idea of what they’re all about. They tweet ideas, articles and commentary on how to balance the federal budget.

@CenterOnBudget – The somewhat-left-leaning Center on Budget and Policy Priorities focuses on analyzing national data to predict how possible solutions could affect Americans.

@Heritage – The Heritage Foundation brings a conservative perspective on the financial issues at stake. On Monday it tweeted a chart showing how its plan for lowering the debt stacked up against those of four other think tanks.

@AARP – A number of Democratic senators have pledged to oppose a deal that would hurt seniors, but nevertheless, Medicare and Social Security cuts could be on the table. Follow AARP to see how congressional compromises could affect older Americans.

@CSPAN­_Classroom – This account offers civics lessons for educators, but the guide to the fiscal cliff they tweeted this week has background information and interviews with lawmakers that could be helpful for anyone trying to understand the complex talks on Capitol Hill.

Observers at ABC

ABC’s @JakeTapper, @DevinDwyer and @MaryKBruce will bring the view from the White House. @RickKlein, @AmyEWalter and @ JonKarl will have analysis of the issues (most likely with sports metaphors to boot). Turn to @GStephanopoulos for the big picture. @JParkABC report on the ground from the House of Representatives and @SunlenMiller will cover the Senate.

The Instigators, 2016ers and Others

@JimDemint – U.S. Senator Jim DeMint, R-S.C., draws a hard line and likes to stir up the conversation, though the Romney backer has been unusually quiet since President Obama‘s win. We’re hoping this budget battle will be enough to rile him up again.

@TedCruz - The senator-elect from Texas will undoubtedly raise some eyebrows with his fired-up rhetoric during this showdown. As an example of his spunk, the Republican rising star essentially issued a challenge to President Obama about working together on the fiscal cliff.

@MarcoRubio – With his attendance at the Iowa governor’s birthday bash last week, it seems Sen. Rubio, R-Fla., is already preparing to court a 2016 electorate. He’ll want to command a memorable presence in this historic fiscal fight.

@GovernorOMalley – The Maryland governor is rumored to be a Democratic favorite for 2016. He’s garnered praise for reining in costs to the state.

@djheakin - Douglas Holtz-Eakin, former CBO director and current president of the American Action Forum, offers educational tweets, including an e-book with the need-to-know on the fiscal cliff.

@econjared – Jared Bernstein is a Center on Budget and Policy Priorities fellow and the former chief economist and economic adviser to Vice President Joe Biden who made some of the original predictions about the stimulus package.

For a Laugh

If talk of impending economic doom becomes a little too heavy to take, turn to @PourMeCoffee , @MrFiscalCliff and @TheOnion for tweets from the lighter side of the fiscal cliff.

And of course … @BarackObama – If the fiscal cliff fight is anything like the battle to raise the debt ceiling, President Obama will likely take to Twitter to encourage Americans to get involved and contact their representatives. You’ll know tweets that come directly from the president (and not his communications team) if they have “-BO” at the end.

Did we miss someone? Tweet your suggestions to @WordsOfSarah!

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Pussy Riot protester alone in cell after inmate tension

MOSCOW (Reuters) – Jailed Pussy Riot punk protester Maria Alyokhina has been moved to a single-person cell for her own protection because of tension with other prisoners, her lawyer and Russia‘s federal penitentiary service said on Friday.

Alyokhina, 24, is serving a two-year sentence for a raucous protest against President Vladimir Putin in Moscow‘s main Russian Orthodox cathedral. Activists said her trial, and that of two band mates, was part of a crackdown on dissent.

“There was a conflict” between Alyokhina and other inmates and “she was transferred to a individual cell,” her lawyer Irina Khrunova said by telephone. She said it was not yet clear what caused the conflict.

Prison authorities said Alyokhina was moved at her own request.

“Some tensions arose in relationships and, apparently to prevent this situation from escalating, she decided to submit a request to the prison leadership and they moved her to a one-person cell,” a federal prison service spokeswoman said.

The spokeswoman dismissed Russian media reports Alyokhina argued with inmates over religion at the Ural Mountains prison about 1,150 km (715 miles) northeast of Moscow. Pussy Riot’s protest offended many members of Russia’s Orthodox Church.

The spokeswoman also said she had no information regarding a report on the tabloid-style Life News website that Alyokhina had received violent threats from cell mates.

Alyokhina’s main meal is taken to her cell and she is accompanied by a guard when she leaves it, the spokeswoman said.

Alyokhina and two band mates were convicted in August of hooliganism motivated by religious hatred for their “punk prayer”, which the dominant Russian Orthodox Church has cast as part of a concerted attack on the church and the faithful.

The women said the protest, in which they burst into Christ the Saviour Cathedral and called on the Virgin Mary to rid Russia of Putin, was not motivated by hatred and was meant to mock the church leadership’s support for the longtime leader.

Putin, a former KGB officer who has cultivated close ties with the church over 13 years in power, has rejected criticism from the United States and European leaders who called the two-year sentences disproportionate.

Alyokhina, who has a young son, argued with the judge and cross-examined witnesses during her trial.

Her band mate Nadezhda Tolokonnikova, 23, is serving her sentence in a different prison. Yekaterina Samutsevich, 30, was freed last month when a court suspended her sentence on appeal.

(Additional reporting by Ludmila Danilova and Steve Gutterman; Writing by Nastassia Astrasheuskaya; editing by Jason Webb)

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Health Care’s Epidemic of Insider Trading

On April 14, 2011, James Fan, 39, stood on a parking garage landing at Newark Liberty International Airport, a letter from his young son in his pants pocket, about to jump four stories to his death. Fan had been charged a day earlier with insider trading based on his knowledge of confidential test results at Seattle Genetics (SGEN), a health-care company where he was manager of clinical programming. Also charged: his younger brother, Zishen, who was scheduled to take the oath of U.S. citizenship a month later. The total take, a judge later determined, was about $ 200,000. James Fan was trying to help his brother, who had found himself deep under water after the California real estate market collapsed in 2008, prosecutors said later. “The Fan case is such a cautionary tale,” says Jenny Durkan, the U.S. attorney in Seattle. “Both brothers were promising.”

The markets are awash in insider trading, and the health-care industry has been particularly hard-hit. Health-care businesses offer illegal traders abundant opportunities to profit from unpublicized data about earnings and deals. Pharmaceutical companies can live or die on the results of drug trials. And the industry has undergone significant consolidation, leading to several multibillion-dollar mergers. “Health care is particularly attractive to criminals because so much turns on the government regulatory approval,” says Rod Rosenstein, the U.S. attorney for Maryland. “If you have a pending application for a new drug, the difference between yes and no on approvals can be tens or hundreds of millions of dollars.”

The Fans are among at least 83 people who have been sued by the U.S. Securities and Exchange Commission or charged since 2008 with passing or receiving insider-trading tips involving pharmaceutical, biotechnology, or other health-care stocks. On Nov. 20, federal prosecutors charged Mathew Martoma, a former portfolio manager for Steven Cohen’s SAC Capital Advisors, with trading on insider tips about clinical trials of bapineuzumab, a drug to treat Alzheimer’s disease. They said the scheme netted as much as $ 276 million for the hedge fund. Martoma’s lawyer said his client would be exonerated. An SAC spokesman said, “Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry.”

A day earlier, three executives at health-care companies Celgene (CELG), Sanofi (SNY), and Stryker (SYK) were among six people charged for their roles in an insider-trading ring that prosecutors said generated $ 1.48 million in illicit profit. Lawyers for the six men declined to comment.

The lineup of accused health industry inside traders illustrates how widespread the problem is: CEOs, hedge fund traders, bankers, lawyers, doctors, accountants, baseball players, a retired pilot, and a film producer have been charged or sued by regulators. Martha Stewart went to prison in 2004 for obstructing justice and false statements about her sale of shares of health-care company ImClone Systems (LLY), whose founder Sam Waksal was ordered to spend 87 months in jail for insider trading.

While the number of insider-trading cases in the technology industry has been roughly the same since 2008, many of those were intertwined with Raj Rajaratnam, the billionaire hedge fund manager appealing his conviction while serving an 11-year prison sentence. What’s notable about health-care corruption is its breadth. The cases include husbands stealing information from wives, fraternity brothers conspiring, and an attorney making trades on information he overheard from his daughter. (She was a lawyer visiting home for the holidays while working on Abbott Laboratories’ (ABT) acquisition of Advanced Medical Optics.) A health-care inside trader turned confidential informant on another case said he was once on a golf course with three doctors whose beepers all went off at the same moment with the same inside tip, according to an FBI agent’s interview summary obtained by Bloomberg.

James Fan, originally named Zizhong Fan, was born in 1971 in Beijing, a year before his brother. Their parents later divorced. James and his wife trained as physicians in China, where doctors’ pay was low, says his attorney in Los Angeles, Adam Braun, a former federal prosecutor. James never practiced medicine and moved to the U.S. in 1999, a year after Zishen.

In July 2008, James began work at Seattle Genetics in Bothell, Wash., as a senior statistical programmer. His job was to convert raw data from clinical trials into statistics measuring the effectiveness of drugs. In 2010 he was leading a group of programmers who analyzed the data from a pair of clinical trials on the company’s flagship drug, SGN-35, for patients with Hodgkin’s lymphoma. James learned in July 2010 that the raw data showed progress for a large majority of the patients.

Because of the drug trials, Seattle Genetics began a blackout period on employees trading company securities starting on June 22. Soon after, James wired money to China, and the money ended up in an account in his father’s name at TD Ameritrade (AMTD). On Aug. 24, Zishen Fan began using the TD Ameritrade account to buy Seattle Genetics shares and options. Over a month, the brothers spent $ 514,314 on Seattle Genetics stock and options. On Sept. 27, Seattle Genetics announced that SGN-35 cut tumor size by at least half for 75 percent of the patients in a group of 102. Shares rose almost 18 percent. Zishen Fan began exercising the options and selling shares.

The activity aroused suspicions at TD Ameritrade, which filed a complaint about possible insider trading on Oct. 27 with federal regulators. “TD Ameritrade utilizes a variety of risk management tools and surveillance methodologies to identify potentially problematic activity,” says Kristin Petrick, a company spokeswoman. The Options Regulatory Surveillance Authority, or ORSA, which monitors trading for the Chicago Board Options Exchange (CBOE) and other exchanges, also flagged the account and alerted the SEC on Dec. 13.

SEC lawyers in San Francisco, who also cover Seattle, sued, filing a complaint in January against James and Zishen Fan that laid out the insider-trading scheme. Prosecutors filed a criminal complaint against the brothers in federal court in Seattle on April 13. The next morning, FBI agents went to arrest James Fan at his home in Mill Creek, Wash. James, who had been fired by Seattle Genetics, was then working in New Jersey. His distraught wife called Braun, who phoned a prosecutor and promised to bring his client to court the next day for his initial appearance and bail hearing.

When Braun spoke with James at his job in New Jersey, James told him he would reserve a flight out of Newark. James spoke that afternoon with a friend who grew alarmed and went to the airport to find him, Braun says. The friend contacted the police, saying James was suicidal and at a parking garage. When police arrived, they found his body beside the garage.

Zishen Fan pleaded guilty in July 2011, admitting his brother gave him material, nonpublic information about SGN-35. Three months later, U.S. District Judge Marsha Pechman sentenced Fan to 18 months in prison. He is serving his term at a facility in Taft, Calif. Fan declined an interview request. His lawyer, Allen Ressler, has spoken with Fan in prison. “He says he’s enduring it,” says Ressler.

The bottom line: The Fans are among at least 83 people charged with insider trading in health-care stocks since 2008.

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Former Ivory Coast leader’s wife wanted by ICC

THE HAGUE, Netherlands (AP) — The International Criminal Court unsealed an indictment Thursday against former Ivory Coast President Laurent Gbagbo‘s wife on charges including murder, rape and persecution. It was the first time in the court’s 10-year history it has charged a woman.

The world’s first permanent war crimes tribunal said the arrest warrant was issued on Feb. 29 for former first lady Simone Gbagbo for crimes against humanity.

Her husband, Laurent Gbagbo, is already in custody at the court’s detention unit in The Hague facing similar charges stemming from his fight to retain power after losing a 2010 presidential election. If his wife is extradited, they could face justice together in an unprecedented husband-wife trial.

But a senior member of Ivory Coast President Alassane Ouattara‘s government, who requested anonymity because he wasn’t authorized to speak to the media, said Ivory Coast has already informed the ICC that the nation will not let her go.

“We informed them of this a long time ago,” he said.

The court’s chief prosecutor, Fatou Bensouda, urged Ivory Coast to extradite Gbagbo.

“The type of crimes committed in the aftermath of the 2010 elections did not happen by chance — they were planned and coordinated at the highest political and military levels and all those bearing the greatest responsibility must be held to account,” Bensouda said in a statement.

She said prosecutors continue to investigate crimes committed by both sides in Ivory Coast’s bloody power struggle and expect to issue further arrest warrants in the future.

“The investigations are objective, impartial and independent, and are conducted in strict accordance with the law,” she said.

Ivory Coast officials are holding the 63 year old under house arrest in the northwest town of Odienne. Last week, Ivorian prosecutor Noel Dje Enrike Yahau said lawyers had questioned Simone Gbagbo there for two days and that the domestic charges against her remained the same: genocide, blood crimes and economic crimes.

Unsealing the ICC arrest warrant issued nearly nine months ago appears to be a tactic by the court to put pressure on Ouattara’s administration to hand over Ms. Gbagbo.

If authorities in Ivory Coast want to prosecute her, they have to convince judges at The Hague tribunal that their case involves the same crimes she is charged with at the ICC. It is a court of last resort, meaning it only takes cases from countries unwilling or unable to prosecute them.

The international court said in the warrant that there is evidence pro-Gbagbo forces deliberately attacked perceived supporters of Ouattara in the aftermath of the election.

Judges who reviewed evidence supporting the charges against Ms. Gbagbo said they found “there are reasonable grounds to believe that Ms. Gbagbo bears individual criminal responsibility for the crimes … as ‘an indirect co-perpetrator.’”

The warrant called Gbagbo an “alter ego for her husband” with the power to make state decisions. It said there is evidence to suggest she “instructed the pro-Gbagbo forces to commit crimes against individuals who posed a threat to her husband’s power.”

Her husband was the first former head of state to be taken into custody by the court when he was extradited to The Hague by the Ivory Coast government last year.

Prosecutors say about 3,000 people died in violence by both sides after Gbagbo refused to concede defeat following the election. Ouattara finally took power in April 2011 with the help of French and U.N. forces.

Ivory Coast is not a member state of the court, but has voluntarily accepted its jurisdiction.

It is very rare for a woman to be charged by an international war crimes court. In the past, the Yugoslav war crimes tribunal convicted former Bosnian Serb President Biljana Plavsic of persecution and sentenced her to 11 years imprisonment.

The announcement of the arrest warrant and Ivory Coast’s refusal to hand over Gbagbo appeared likely to raise tensions between supporters of her husband and those who back Ouattara.

Moussa Toure Zeguen, a leader of the Gbagbo allies in exile in Ghana, said by phone from Accra that the former president’s supporters had no faith in the Ivorian authorities to give Simone Gbagbo a fair trial.

“We don’t trust them. The only thing that Ouattara is doing is revenge,” Zeguen said. “He wants to try us without trying any of the fighters from his side who also committed crimes. It is not fair, and this cannot bring reconciliation.”

____

Associated Press writers Rukmini Callimachi in Dakar, Senegal, and Robbie Corey-Boulet in Abidjan, Ivory Coast, contributed to this report.

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Do drunks have to go to the ER?

NEW YORK (Reuters Health) – With the help of a checklist, ambulance workers may be able to safely reroute drunk patients to detoxification centers instead of emergency rooms, according to a new study.

Researchers in Colorado found no serious medical problems were reported after 138 people were sent to a detox center to sleep it off, instead of to an ER.

In 2004, according to the researchers, it’s estimated that 0.6 percent of all U.S. ER visits were made by people without any problems other than being drunk. Those visits ended up costing about $ 900 million.

“Part of the issue has been – as it is in many busy ER departments – there’s a lot of chronic alcoholics that are brought in by ambulance, police or just come in. Often they are brought in because they have not committed a crime or there is limited space in our detoxification center. So the majority were brought to the ER department,” said Dr. David Ross, the study’s lead author from Penrose-St. Francis Health Services in Colorado Springs.

Ross said the ambulance company where he serves as medical director created the checklist with the help of the local detox center, which provided limited medical care by a nurse, and the local hospitals to reduce the number of drunks without medical needs being sent to the local ERs.

They created a checklist with 29 yes-or-no questions, such as whether the patient is cooperating with the ambulance worker’s examination and if the patient is willing to go to the detox center.

The patient was sent to the ER if the ambulance worker checked “no” on any question.

The researchers then went back to look at the patients they transported between December 2003 and December 2005 to see whether or not any of them ended up having serious medical problems at the detox center.

During that two year period, the ambulance workers transported 718 drunks. The detox center received 138 and the local ERs got 580.

Overall, 11 of the patients who were taken to detox were turned away because there was no room, their blood alcohol level exceeded the limit, their family came to pick them up or they were combative.

Another four patients at the detox center were taken to the ER because of minor complications, including chest and knee pain. However, there were no serious complications reported.

“We really believe that we did not miss anybody with a serious illness and injury that didn’t go to the ER as they should have,” said Ross.

But the researchers write in the Annals of Emergency Medicine that their study did have some limitations.

Specifically, the researchers did not plan in advance to do a study when they were creating the checklist, which means their findings are limited to whatever information was collected at the detox center and ERs.

Also, the number of people who were sent to the detox center in their study is relatively small, so it’s hard to tell how many serious complications they’d see among a larger group of people.

“We tried to estimate how likely we would have been to encounter a serious event… We estimated at most we’d encounter three serious adverse events (in 748 patients),” Ross told Reuters Health.

SOURCE: http://bit.ly/QgPCT5 Annals of Emergency Medicine, online November 9, 2012.

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