DealBook: For S.E.C., a Setback in Bid for More Time in Fraud Cases

The Supreme Court on Wednesday delivered a swift and decisive rejection of the Securities and Exchange Commission’s argument that it should operate under a more forgiving statute of limitations in pursuing penalties in fraud cases.

As a result of the decision, the agency will have to find a long-term solution to give itself more time to investigate cases.

In Gabelli v. Securities and Exchange Commission, Chief Justice John G. Roberts Jr. wrote in the unanimous decision rejecting the S.E.C.’s argument that a federal statute that limits the government’s authority to pursue civil penalties should commence when a fraud is discovered, not when it occurred.

The S.E.C. was hoping that the court would apply what is known as the “discovery rule.” In 2010, the Supreme Court endorsed this rule in a private securities fraud class-action suit, Merck & Co. v. Reynolds, stating “that something different was needed in the case of fraud, where a defendant’s deceptive conduct may prevent a plaintiff from even knowing that he or she has been defrauded.”

The discovery rule is an exception to the protection afforded by a statute of limitations, which puts an endpoint on potential legal liability for conduct. Unlike most cases, when fraud is involved, it may not be apparent to the victims that they were harmed because the primary goal of deceptive conduct is to keep it from being exposed.

In the Gabelli case, the S.E.C. filed fraud charges in 2008 against the mutual fund manager Marc Gabelli and a colleague, Bruce Alpert, saying they had violated the Investment Advisers Act of 1940 for permitting an investor to engage in market timing. Ten years ago, a major scandal erupted when it came to light that some advisers had permitted select investors to buy shares at favorable prices to take advantage of pricing disparities in the securities held by mutual funds.

In its complaint, the S.E.C. sought civil monetary penalties based on market timing that it claimed had taken place from 1999 to 2002, and resulted in the preferred investor purportedly reaping significant profits while ordinary investors suffered large losses. The defendants denied the charges and filed a motion to dismiss the case because it was not brought in time.

A federal statute, 28 U.S.C. § 2462, provides that “an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued.” The provision dates to 1839, and applies to any government agency.

A decision by the United States Court of Appeals for the Second Circuit in Manhattan allowed the case to proceed by applying the discovery rule to a governmental action. Coincidentally, that decision was written by Judge Jed S. Rakoff, who despite being an occasional thorn in the S.E.C.’s side, accepted the agency’s argument to avoid a strict application of the five-year statute of limitations.

The Supreme Court, however, saw things differently. This week, it issued its opinion less than two months after it heard oral argument in the case in January, a clear sign the justices found no merit in the S.E.C.’s contention that the agency should be treated the same as private plaintiffs in trying to get around the statute of limitations.

According to the Supreme Court, victims in securities fraud cases should have a longer period to file a claim – from when the fraud was discovered. “Most of us do not live in a state of constant investigation,” the court wrote. “Absent any reason to think we have been injured, we do not typically spend our days looking for evidence that we were lied to or defrauded.”

Chief Justice Roberts explained that “the S.E.C. as enforcer is a far cry from the defrauded victim the discovery rule evolved to protect.” One of the reasons the agency exists is to detect and penalize violations, with tools that the ordinary investor simply does not have, like the authority to compel testimony and the production of documents. The message is simple. When it’s your job to investigate fraud, you cannot argue that your failure to do so is a justification for not meeting a statute of limitations.

The Supreme Court’s decision puts increased pressure on the S.E.C. to pursue its investigations with greater alacrity and not let them gather dust, which can occur as a result of staff turnover or other pressing issues. The market timing case is a good example of how an investigation might get lost in the shuffle as corporate accounting frauds at large companies like Enron and WorldCom, which also came to light in 2002, strained the S.E.C.’s investigative resources.

There are a couple of options to deal with this issue in the long run, apart from a substantial increase in the agency’s budget – an unlikely prospect in the face of the looming federal budget sequestration deadline.

The S.E.C. can obtain an agreement to stop the statute of limitations, known as tolling, from those it is investigating, something it has done in the past. For example, in its insider trading and securities fraud case against Samuel E. Wyly, his now deceased brother, Charles J. Wyly Jr., and two other defendants, the S.E.C. got an agreement that let it pursue claims beyond the normal five-year limitations period.

A permanent solution would be to seek legislation from Congress that would give the S.E.C. a longer window to complete its investigations. The statute of limitations is not a constitutional protection, so Congress can amend it as it sees fit, which it has done in other areas involving fraud.

The limitations period for banking crimes, for example, was extended to 10 years during the savings and loan crisis because of the crush of cases that made it difficult to finish investigations in the five-year window to initiate criminal prosecutions. The Fraud Enforcement and Recovery Act of 2009 added mail and wire fraud affecting a financial institution to the list of crimes that get the benefit of the 10-year limitations period, again because of fear that cases would be lost because of the number of investigations taking place after the financial crisis.

The issue of the statute of limitations may even come up at the confirmation hearings of Mary Jo White, who has been nominated to be chairwoman of the S.E.C. That could be an early indicator of whether she would be willing to push for relief from the effect of the Gabelli opinion to help out the enforcement division.

In the short run, the Supreme Court’s decision will cause defendants in government enforcement actions to examine whether they might be able to take advantage of the five-year limitations period. Given how slowly the government has been known to move on occasion, it may be that some cases will fall by the wayside because of the Gabelli decision.


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Conservative Justices Voice Skepticism on Voting Law





WASHINGTON — A central provision of the Voting Rights Act of 1965 may be in peril, judging from tough questioning on Wednesday from the Supreme Court’s more conservative members.




Justice Antonin Scalia called the provision, which requires nine states, mostly in the South, to get federal permission before changing voting procedures, a “perpetuation of racial entitlement.” Chief Justice John G. Roberts Jr. asked a skeptical question about whether people in the South are more racist than those in the North. Justice Anthony M. Kennedy asked how much longer Alabama must live “under the trusteeship of the United States government.”


The court’s more liberal members, citing data and history, said Congress remained entitled to make the judgment that the provision was still needed in the covered jurisdictions.


“It’s an old disease,” Justice Stephen G. Breyer said of efforts to thwart minority voting. “It’s gotten a lot better. A lot better. But it’s still there.”


Four of the nine-member court’s five more conservative members asked largely skeptical questions about the law. The fifth, Justice Clarence Thomas, did not ask a question, as is typical.


The law, a landmark achievement of the civil rights era was challenged by Shelby County, Ala., which said that the requirement had outlived its usefulness and that it imposed an unwarranted badge of shame on the affected jurisdictions.


The county’s lawyer, Bert W. Rein, said that the “problem to which the Voting Rights Act was addressed is solved.”


In reauthorizing the provision for 25 years in 2006, Congress did nothing to change the criteria for inclusion under the provision, relying instead on a formula based on historic practices and voting data from elections held decades ago. Much of the argument concerned that coverage formula.


Should the court strike down the coverage formula, Congress would be free to take a fresh look at what jurisdictions should be covered. But making distinctions among the states based on new criteria may not be politically feasible.


Four years ago, the court signaled that the law may need revision to withstand constitutional scrutiny, hinting that Congress might want to take a fresh look at the places subject to the preclearance provision, called Section 5. Congress failed to act.


Solicitor General Donald B. Verrilli Jr. said Congress had made a considered and cautious decision in extending the act.


Debo P. Adegbile, a lawyer with the NAACP Legal Defense and Educational Fund, said that “our right to vote is what the United States Constitution is about.”


Section 5, originally set to expire five years after the law was enacted, was upheld by the Supreme Court in 1966 as a rational response to the often flagrantly lawless conduct of some Southern officials then.


Congress repeatedly extended the requirement: for 5 years in 1970, 7 years in 1975, and 25 years in 1982. Congress renewed the act in 2006 after holding extensive hearings on the persistence of racial discrimination at the polls, again extending the preclearance requirement for 25 years.


But it made no changes to the list of jurisdictions covered by Section 5, relying instead on a formula based on historical practices and voting data from elections held decades ago. It applies to nine states — Alabama, Alaska, Arizona, Georgia, Louisiana, Mississippi, South Carolina, Texas and Virginia — and to scores of counties and municipalities in other states.


Last May, a divided three-judge panel of the United States Court of Appeals for the District of Columbia upheld the law. Judge David S. Tatel, writing for the majority, acknowledged that “the extraordinary federalism costs imposed by Section 5 raise substantial constitutional concerns,” and he added that the record compiled by Congress to justify the law’s renewal was “by no means unambiguous.”


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Van Cliburn, American classical pianist, dies


FORT WORTH, Texas (AP) — Van Cliburn, the internationally celebrated pianist whose triumph at a 1958 Moscow competition helped thaw the Cold War and launched a spectacular career that made him the rare classical musician to enjoy rock-star status, died Wednesday after a fight with bone cancer. He was 78.


Cliburn died at his home in Fort Worth surrounded by loved ones, said his publicist and longtime friend Mary Lou Falcone.


"Van Cliburn was an international legend for over five decades, a great humanitarian and a brilliant musician whose light will continue to shine through his extraordinary legacy," Falcone said in a statement. "He will be missed by all who knew and admired him, and by countless people he never met."


Cliburn made what would be his last public appearance in September at the 50th anniversary of the prestigious piano competition named for him. Speaking to the audience in Fort Worth, he saluted the many past contestants, the orchestra and the city. "Never forget: I love you all from the bottom of my heart, forever," he said to a roaring standing ovation.


Cliburn skyrocketed to fame when he won the first International Tchaikovsky Competition in Moscow at age 23 in 1958, six months after the Soviets' launch of Sputnik embarrassed the U.S. and propelled the world into the space age. He triumphantly returned to a New York City ticker tape parade — the first ever for a classical musician — and a Time magazine cover proclaimed him "The Texan Who Conquered Russia."


But the win also proved the power of the arts, bringing unity in the midst of strong rivalry. Despite the tension between the nations, Cliburn became a hero to music-loving Soviets who clamored to see him perform and Premier Nikita Khrushchev reportedly gave the go-ahead for the judges to honor a foreigner: "Is Cliburn the best? Then give him first prize."


In the years that followed, Cliburn's popularity soared, and the young man from the small east Texas town of Kilgore sold out concerts, caused riots when spotted in public and even prompted an Elvis Presley fan club to change its name to his. His recording of the Tchaikovsky Piano Concerto No. 1 with Russian conductor Kirill Kondrashin became the first classical album to reach platinum status.


Time magazine's 1958 cover story quoted a friend as saying Cliburn could become "the first man in history to be a Horowitz, Liberace and Presley all rolled into one."


Cliburn performed for royalty, heads of state in Europe, Asia and South America, and for every U.S. president since Harry Truman.


"Since we know that classical music is timeless and everlasting, it is precisely the eternal verities inherent in classical music that remain a spiritual beacon for people all over the world," Cliburn once said.


But he also used his skill and fame to help other young musicians through the Van Cliburn International Music Competition.


Created by a group of Fort Worth teachers and citizens in 1962, the competition, held every four years, remains a pre-eminent showcase for the world's top pianists. An amateur contest was added in 1999.


"It is a forum for young artists to celebrate the great works of the piano literature and an opportunity to expose their talents to a wide-ranging international audience," Cliburn said during the 10th competition in 1997. The 14th competition is to be held in May and June.


President George W. Bush presented Cliburn with the Presidential Medal of Freedom — the nation's highest civilian honor — in 2003. In 2004, he received the Order of Friendship of the Russian Federation from Russian President Vladimir Putin.


"I still have lots of friends in Russia," Cliburn said at the time. "It's always a great pleasure to talk to older people in Russia, to hear their anecdotes."


After the death of his father in 1974, Cliburn announced he would soon retire to spend more time with his ailing mother. He stopped touring in 1978.


He told The New York Times in 2008 that among other things, touring robbed him of the chance to enjoy opera and other musical performances. "I said to myself, 'Life is too short.' I was missing so much," he said. After winning the competition, he added, "it was thrilling to be wanted. But it was pressure too."


Cliburn emerged from his sabbatical in 1987, when he played at a state dinner at the White House during the historic visit to Washington of Soviet leader Mikhail Gorbachev. Gorbachev leapt from his seat to give the pianist a bear-hug and kisses on the cheeks.


The 13th Cliburn competition, held in 2009, made history when a blind pianist from Japan, Nobuyuki Tsujii, and a teenager from China, Haochen Zhang, both won gold medals. They were the first winners from any Asian country, and Tsujii was the first blind pianist to win. And it was only the second time there were dual first place winners.


Cliburn was born Harvey Lavan Cliburn Jr. on July 12, 1934, in Shreveport, La., the son of oilman Harvey Cliburn Sr. and Rildia Bee O'Bryan Cliburn. At age 3, he began studying piano with his mother, herself an accomplished pianist who had studied with a pupil of the great 19th century Hungarian pianist Franz Liszt.


The family moved back to Kilgore, Texas, within a few years of his birth.


Cliburn won his first Texas competition when he was 12, and two years later he played in Carnegie Hall as the winner of the National Music Festival Award.


At 17, Cliburn attended the Juilliard School in New York, where fellow students marveled at his marathon practice sessions that stretched until 3 a.m. He studied under the famed Russian-born pianist Rosina Lhevinne.


Between 1952 and 1958, he won all but one competition he entered, including the G.B. Dealey Award from the Dallas Symphony, the Kosciusko Foundation Chopin Scholarship and the prestigious Leventritt. By age 20, he had played with the New York Philharmonic and the symphonies of most major cities.


Cliburn's career seemed ready to take off until his name came up for the draft. Cliburn had to cancel all shows but was eventually excused from duty due to chronic nosebleeds.


Over the next few years, Cliburn's international popularity continued as he recorded pieces ranging from Mozart to a concerto by American Edward McDowell. Still, having been trained by arguably the best Russian teachers in the world, Cliburn's heart was Russian, with the Tchaikovsky and Rachmaninoff concertos.


After 1990, Cliburn toured Japan numerous times and performed throughout the United States. He was in the midst of a 16-city U.S. tour in 1994 when his mother died at age 97.


Cliburn made his home in Fort Worth, where in 1998 he appeared at the opening of the Nancy Lee and Perry R. Bass Performance Hall, both in recital and as soloist with the Fort Worth Symphony Orchestra. He endowed scholarships at many schools, including Juilliard, which gave him an honorary doctorate, and the Moscow and Leningrad Conservatories.


In December 2001, Cliburn was presented with the prestigious Kennedy Center Honors Medallion at the televised tribute held in Washington.


Until only recently, Cliburn practiced daily and performed limited engagements.


___


Online:


Van Cliburn Foundation: http://www.cliburn.org


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Personal Health: Too Many Pills in Pregnancy

The thalidomide disaster of the early 1960s left thousands of babies with deformed limbs because their mothers innocently took a sleeping pill thought to be safe during pregnancy,

In its well-publicized wake, countless pregnant women avoided all medications, fearing that any drug they took could jeopardize their babies’ development.

I was terrified in December 1968 when, during the first weeks of my pregnancy, I developed double pneumonia and was treated with antibiotics and codeine. Before swallowing a single dose, I called my obstetrician, who told me to take what was prescribed, “reassuring” me that if I died of pneumonia I wouldn’t have a baby at all.

In the decades that followed, pregnancy-related hazards were linked to many medicinal substances: prescription and over-the-counter drugs and herbal remedies, as well as abused drugs and even some vitamins.

Now, however, the latest findings about drug use during pregnancy have ignited new concerns among experts who monitor the effects of medications on the developing fetus and pregnancy itself.

During the last 30 years, use of prescription drugs during the first trimester of pregnancy, when fetal organs are forming, has grown by more than 60 percent.

About 90 percent of pregnant women take at least one medication, and 70 percent take at least one prescription drug, according to the Centers for Disease Control and Prevention.

Since the late 1970s, the proportion of pregnant women taking four or more medications has more than doubled.

Nearly one woman in 10 takes an herbal remedy during the first trimester.

A growing number of pregnant women, naïvely assuming safety, self-medicate with over-the-counter drugs that were once sold only by prescription.

While many commonly taken medications are considered safe for unborn babies, the Food and Drug Administration estimates that 10 percent or more of birth defects result from medications taken during pregnancy. “We seem to have forgotten as a society that drugs pose risks,” Dr. Allen A. Mitchell, professor of epidemiology and pediatrics at Boston University Schools of Public Health and Medicine, said in an interview. “Many over-the-counter drugs were grandfathered in with no studies of their possible effects during pregnancy.”

Medical progress has contributed to the rising use of medications during pregnancy, Dr. Mitchell said. Various conditions, like depression, are now recognized as diseases that warrant treatment; drugs have been developed to treat conditions for which no treatment was previously available, and some conditions, like Type 2 diabetes and hypertension, have become more prevalent.

Misled by the Web

Now a new concern has surfaced: Bypassing their doctors, more and more women are using the Internet to determine whether the medication they are taking or are about to take is safe for an unborn baby.

A study, published online last month in Pharmacoepidemiology and Drug Safety, of so-called “safe lists for medications in pregnancy” found at 25 Web sites revealed glaring inconsistencies and sometimes false reassurances or alarms based on “inadequate evidence.”

The report was prepared by Cheryl S. Broussard of the Centers for Disease Control and Prevention with co-authors from Emory, Georgia State University, the University of British Columbia and the Food and Drug Administration.

“Among medications approved for use in the U.S.A. from 2000 to 2010, over 79% had no published human data on which to assess teratogenic risk (potential to cause birth defects), and 98% had insufficient published data to characterize such risk,” the authors wrote.

But that did not stop the 25 Web sites from characterizing 245 medications as “safe” for use by pregnant women, which “might encourage use of medications during pregnancy even when they are not necessary,” the authors suggested.

Furthermore, the information found online was sometimes contradictory. “Twenty-two of the products listed as safe by one or more sites were stated not to be safe by one or more of the other sites,” the study found.

The question of timing was often ignored. A drug that could interfere with fetal organ development might be safe to take later in pregnancy. Or one (for example, ibuprofen) that is safe early in pregnancy could become a hazard later if it raises the risk of excessive bleeding or premature delivery.

Fewer than half the sites advised taking medication only when necessary, and only 13 sites encouraged pregnant women to consult their doctors before stopping or starting a medication.

Doctors, too, are often poorly informed about pregnancy-related hazards of various medications, the authors noted. One woman I know was advised to wean off an antidepressant before she became pregnant, but another was told to continue taking the same drug throughout her pregnancy.

“In many instances the best bet is for mom to stay on her medication,” said Dr. Siobhan M. Dolan, an obstetrician and geneticist at Albert Einstein College of Medicine. She said that if a woman is depressed during pregnancy, her risk of postpartum depression is greater and she may have difficulty bonding with her baby.

Dr. Dolan, who is author, with Alice Lesch Kelly, of the March of Dimes’ newest book, “Healthy Mom Healthy Baby,” emphasized the importance of weighing benefits and risks in deciding whether to take medication during pregnancy and which drugs to take.

“In anticipation of pregnancy, a woman taking more than one drug to treat her condition should try to get down to a single agent,” Dr. Dolan said in an interview. “Of the various medications available to treat a condition, is there a best choice — one least likely to cause a problem for either the baby or the mother?”

She cautioned against sharing medications prescribed for someone else and assuming that a remedy labeled “natural” or “herbal” is safe. Virtually none have been tested for safety in pregnancy.

Among medications a woman should be certain to avoid, in some cases starting three months before becoming pregnant, are isotretinoin (Accutane and others) for acne; valproic acid for seizure disorders; lithium for bipolar disorder; tetracycline for infections, and angiotensin-converting enzyme (ACE) inhibitors and angiotensin receptor antagonists for hypertension, Dr. Dolan said.

“Many medications that are not recommended during pregnancy can be replaced with low-risk alternatives,” she wrote.

Dr. Broussard, who did the “safe lists” study, said in an interview, “We’ve heard about women seeing medications on these lists and deciding on their own that it’s O.K. to take them. “Women who are pregnant or even thinking about getting pregnant should talk directly to their doctors before taking anything. They should be sure they’re taking only what’s necessary for their health condition.”

A reliable online resource for both women and their doctors, Dr. Mitchell said, are fact sheets prepared by OTIS, the Organization of Teratology Information Specialists, which are continually updated as new facts become available: http://www.otispregnancy.org.

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DealBook: Obama’s Nominee for S.E.C. Tries to Allay Skepticism

Mary Jo White’s path to the Securities and Exchange Commission has reached a crucial juncture: the Congressional charm campaign.

Lawmakers are scrutinizing Ms. White ahead of her Senate confirmation hearing, raising questions about the former prosecutor’s lack of regulatory experience and the challenge of policing Wall Street firms she recently defended in private practice. But Ms. White is seeking to quell concerns about potential conflicts of interest.

She recently scheduled meetings with Senate Banking Committee members, who must clear her nomination, and answered a 20-page boilerplate questionnaire detailing her qualifications, according to a copy provided to The New York Times. The document sheds new light on her list of Wall Street clients, including little-known work performed for HSBC’s former chief executive. It also describes her ties to New York Democratic causes and laurels she earned both as a defense lawyer and federal prosecutor.

The questionnaire, created by the banking committee, focused significant attention on her movement through the revolving door between government service and private practice, a concern that has loomed since President Obama nominated Ms. White in January.

“As a government official, I believe I have an established track record and the reputation of being tough, but fair,” she said in the document.

Ms. White also offered a previously undisclosed concession, vowing “as far as can be foreseen,” never to return to Debevoise & Plimpton, where she had built a lucrative legal practice. To avert potential conflicts stemming from her work on behalf of Wall Street giants, Ms. White had already agreed to recuse herself for one year from most matters that involve former clients.

While Ms. White’s nomination is expected to sail through the committee before receiving full Senate approval, four Congressional officials who spoke anonymously warned that some Democrats have lingering reservations.

The Democrats note that her husband, John W. White, is co-chairman of the corporate governance practice at Cravath, Swaine & Moore, where he represents many of the companies that the S.E.C. regulates. They also question whether Ms. White’s recusals, even if well-intentioned, could cripple her ability to run the agency.

In a meeting on Tuesday with Senator Sherrod Brown, Democrat of Ohio, Ms. White did little to alleviate the fears.

“Senator Brown respects Ms. White’s credentials and experience, but is concerned with Washington’s long-held bias toward Wall Street,” his spokeswoman, Meghan Dubyak, said in a statement. “He pushed Ms. White,” to explain “whether her previous employment or her spouse’s current employment could cause her to recuse herself from key business facing the S.E.C.” The agency has already fallen behind in writing dozens of new rules for Wall Street.

Ms. White’s supporters counter that, before the White House announced the appointment, the Office of Government Ethics vetted her disclosures. The nonpartisan officials concluded that, even with her recusals, Ms. White could effectively run the agency.

Her supporters also trumpet her long tenure as a tenacious prosecutor. During stints as a federal prosecutor in Brooklyn and as the first woman United States attorney in Manhattan, she helped oversee the prosecution of the crime figure John Gotti and directed the case against those responsible for the 1993 World Trade Center bombing. The cases won her praise from several lawmakers.

Ms. White still has time to win over remaining skeptics. Her confirmation hearing is not expected until the week of March 11, Congressional officials briefed on the matter said.

Until then, Ms. White is blitzing through the halls of Congress, a routine practice for nominees. She began her charm offensive at the top of the banking committee’s roster, visiting this month with the Democratic chairman, Senator Tim Johnson, of South Dakota. A Congressional official briefed on the matter said Ms. White performed well at the gathering, and no major issues arose.

In the next round of meetings, she will face off with a more liberal arm of the committee known to scrutinize nominees. After meeting Mr. Brown, Ms. White is scheduled to see Senator Jeff Merkley, Democrat of Oregon. She also will meet Elizabeth Warren, the Massachusetts Democrat who is an outspoken critic of Wall Street, Ms. Warren’s office confirmed on Tuesday.

Even if Ms. White fails to satisfy lawmakers’ concerns, the meetings are an important step in clearing the way for her appointment.

“Senators will have a chance to size Mary Jo up, and I believe will come away with a great sense of comfort that she’s a candidate of true quality,” said Harvey Pitt, who passed through the confirmation process in 2001 to lead the S.E.C.

He noted that additional disclosures could bolster her candidacy. “I do think she will need to provide a level of comfort to the committee that she is aware of the issue, has a definitive plan for navigating through the potential conflict issues, and will be completely open about when she has a potential recusal issue, and how she has handled it,” he said.

Ms. White, a political independent, assured lawmakers in her questionnaire that she was “completely independent of political or personal influences.” She did disclose, however, $13,000 in campaign donations to Democratic candidates. She also served on the campaign committee of a Democrat who had run for New York attorney general.

Her ties to Debevoise — and its clients — are more significant; she represented JPMorgan Chase, UBS and Michael Geoghegan, the former head of HSBC.

Ms. White, 65, said this month said that she would retire from Debevoise after taking over the S.E.C. and would forgo the firm’s typical retirement perks: office space and a free BlackBerry. She also will sever financial ties to the firm during her term at the S.E.C., taking an upfront lump-sum retirement payment rather than collecting a monthly installment of $42,500.

Her husband has also offered concessions. He agreed to convert his partnership at Cravath, Swaine & Moore from equity to nonequity status and promised not to “communicate directly” with the S.E.C. about rule-making. Ms. White will not participate in a matter with a direct effect on his compensation.

In line with a standard move for federal appointees, Ms. White further agreed to recuse herself for one year from voting on enforcement cases involving Debevoise clients. There are limitations to the policy, though, in case it is “in the public interest” and a “reasonable” person would not object.

Some lawmakers dismiss questions about her potential conflicts, but still question her mastery of regulatory minutiae. While Ms. White is a skilled litigator, she lacks experience in financial rule-writing, unlike a predecessor, Mary Schapiro, a lifelong regulator who ran the S.E.C. for nearly four years.

In her questionnaire, Ms. White highlighted her role as a director of the Nasdaq exchange and other experiences that she said gave her “a firm grounding” in securities laws.

She also, inadvertently, drew a connection to Ms. Schapiro. Like Ms. Schapiro, Ms. White is an animal lover, currently serving as a board member of the American Society for the Prevention of Cruelty to Animals.

She agreed to step down from the board once she is sworn in at the S.E.C.

A version of this article appeared in print on 02/27/2013, on page B1 of the NewYork edition with the headline: Nominee For S.E.C. Tries to Allay Skepticism.
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Scientist at Work Blog: Getting to the Bottom of It All

Michael Becker, a doctoral student at McGill University, was a scientific diver on an expedition to Lake Untersee in Antarctica.

If you’re going where there’s no air to breathe, you better be organized.

Any kind of underwater diving involves process for that very reason. There’s the early-morning wake-up, the weather check, the gear check (masks, fins, regulators … check). And then there’s the dive site approach – whether you’re walking in from the shore or taking a boat to some far forgotten reef.

Diving Lake Untersee is just like that – except in Antarctica we get to our dive site by snowmobile.  And Untersee ratchets up the workload because it’s remote, technical and cold.

To even get into the lake is a feat of accomplishment and a trick of clever engineering. Just the thought of trying to chip a dive hole through 10-foot thick lake ice could give you tendinitis long before you get your feet wet.

During the early days of Antarctic diving in the late-1970s, the expedition leader Dale Andersen and a few clever people working in the Dry Valley region of Antarctica came up with an ingenious way of getting through the ice. They modified an industrial-strength steam cleaner to circulate boiling hot liquid through a closed-circuit piece of copper tubing. All a would-be diver had to do was place the tubing inside a small hole drilled in the ice and wait for magic to happen as the hole slowly formed over two days.

But even when the hole is melted there’s still a lot to do before getting into the water.

Dive Days

We start with a hearty breakfast of dehydrated granola — a meal that I hope to never see again. After breakfast, the diver gets ready by sorting the gear and putting on the dry suit while the first tender drives out by snowmobile to chip out any refrozen ice from the dive hole.

The second snowmobile carries the other dive tender and the diver (already in their dry suit) to the hole. The diver sits on the ice platform and is dressed with weights, tank, gloves, and is tied in to the all-important safety line.

This line is the life tether. It is fed out and taken in as needed. That way the surface assistants have a sense of how far away the diver is, and the diver knows where to return. In the early days, sequences of line pulls would be used to communicate simple commands like an early Morse code for dive messages. Nowadays, the dive line connects a surface communication box to the diver’s facemask. Diver and tender are easily able to grumble back and forth to each other with all the benefits of modern technology.

Once the diver’s mask is on they slide in, do the dive, come back to the hole and are yanked out. If the diver still has a pulse there is applause all around and we go back to celebrate with a dinner of dehydrated food.

Safety is paramount here and there is no margin of error. The nearest recompression chamber for a dive injury is 2,000 miles away in Cape Town. There are no helicopters for rescue and any serious injury or accident could mean death.

We follow all this protocol and process in pursuit of one thing – studying microbial communities locked away from human history.

The Science Down There

Dale and I have done a number of dives to collect data and samples on the conical stromatolites found at the bottom of Lake Untersee.  Dale has surfaced several times with sediment cores of the lake’s bottom. These cores tell us about the history of the lake and its resident organisms. By looking at cross-sections of the cores, we can see that the microbial communities grow over the years in layers known as laminations. These laminae show us a chronosequence of events, alternating between mineral deposition and organic layer growth. These mineral deposits must come from somewhere as the lake surface is covered in ice. It’s thought that the occasional influx of silt from nearby glaciers provides the sediment that the cyanobacteria then recolonize.

But there’s more than just grabbing a sample and returning to the surface – the lake environment needs to be described in precise detail.

These cyanobacteria are photosynthetic and dependent on light to create their energy. One of my dives was spent swimming transects back and forth directly underneath the 10-foot ice ceiling holding a light meter. This gives us an idea of the amount of energy that is available for photosynthesis beneath the lake. The ice cover isn’t completely uniform; there are dark areas intermingled with sections of bright windows. Also, since light drops off with depth, not all life within the lake is receiving the same amount of energy.

It’s not just these cyanobacterial mats that thrive in Lake Untersee.

There is a diverse world of bacteria and viruses that inhabit their own unique sections of the water column all the way from the lake surface to over 500 feet below. These areas are far beyond our range capacity as scientific divers, and so we must rely on a different technique to sample these distant creatures.

Our two Russian scientists, Vladimir Akimov and Valery Galchenko from the Winogradsky Institute of Microbiology, are microbiologists that specialize in microbial life in extreme environments. Their work has taken them from remote regions of Yakutia, Russia, studying heat-loving extremophiles, to the even more remote Lake Untersee to study the isolated bacteria inhabiting this lake.

Different communities of bacteria thrive according to the changing abiotic conditions, as you get deeper in the lake’s water column.  These environments are mapped out by lowering sensors to measure conductivity, temperature, and depth, or CTD, from the lake’s surface down to around 330 feet – our maximum sample depth.

Vladimir and Valery then lower their sampler to different points within the water column and capture about a gallon of water. These samples are brought back to camp, and the two spend hour after waking hour filtering the water to concentrate samples of both bacteria and viruses. There’s no human health concern with these viruses – they are specific to the bacteria in the lake, and must exist in some sort of equilibrium with the lake life.

One of the areas that Vladimir and Valery are particularly interested is a section of the lake at 256 feet. At this depth, the lake chemistry changes quite a bit – it becomes anoxic, meaning without oxygen. The organisms that thrive in this section have no need for oxygen in their metabolic processes. They use sulfur instead.

From a practical perspective, that means the samples reek. Rich in hydrogen sulfide, they smell like sour, rotten eggs. But by studying this transition from the clear, oxygen-rich water above to the dark, oxygen-poor water below we can get a sense of the two different worlds experienced by bacteria within the same lake.

What we bring up from the depths of Lake Untersee is only the beginning of a long scientific process. All these samples must be carried back to the civilized world, processed and analyzed over the next several months. Only then we will be able to more fully understand the ecosystem of Lake Untersee, and only then will we fully understand the significance of what we’re seeing.

And that’s what makes all this time, effort, and risk worth it. Diving Untersee has been an incredible experience, but without the questions driving us forward, it would be a lot to gamble for a good view.

Follow Michael on Twitter: @Michael__Becker or on his blog, “The Dry Valleys.”

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Dorothy Hamill and Andy Dick among 'Dancing' stars


NEW YORK (AP) — A gold-medal figure skater, a country music legend and a kooky comedian are stepping their way onto "Dancing With the Stars."


ABC says Dorothy Hamill, Wynona Judd and Andy Dick are among 11 contenders for the mirrored ball on the new season of the celebrity dance competition.


Other famous faces in the show's 16th edition include standup comic and actor D.L. Hughley, Baltimore Ravens football player Jacoby Jones and former "American Idol" contestant Kellie Pickler.


Also on hand will be former welterweight boxing champ Victor Ortiz, "General Hospital" star Ingo Rademacher, actress-singer Zendaya Coleman and Lisa Vanderpump from "The Real Housewives of Beverly Hills," as well as Olympic gold-medal gymnast Aly Raisman.


The new "Dancing With the Stars" season kicks off on ABC with a two-hour premiere on March 18.


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Recipes for Health: Roasted Carrots and Scallions — Recipes for Health


Andrew Scrivani for The New York Times







I bought incredibly sweet, thick red scallions and multicolored bunches of carrots from a farmer at my market and roasted them with fresh thyme. Then I sprinkled on some crushed toasted hazelnuts, which contributed a nice crunchy texture and nutty finish to the dish. If you have a bottle of hazelnut oil or walnut oil on hand, a small drizzle just before serving is a welcome touch.




1 ounce hazelnuts (about 1/4 cup)


1 pound carrots, preferably young small carrots, any color (but a mix is nice)


1 bunch white or purple spring onions or scallions


Salt and freshly ground pepper


2 teaspoons fresh thyme leaves


2 tablespoons extra virgin olive oil


Optional: a drizzle of hazelnut oil or walnut oil for serving


1. Preheat the oven to 325 degrees. Place the hazelnuts on a baking sheet and roast for 8 to 10 minutes, until they smell toasty and they are golden all the way through (cut one in half to check). Remove from the oven and turn up the heat to 425 degrees.


2. Immediately wrap the hazelnuts in a clean, dry dish towel. Rub them in the towel to remove the skins. Then place the skinned hazelnuts in a plastic bag or, if you have one, a disposable pastry bag and set on your work table in one layer. Use a rolling pin to crush the nuts by rolling over them with the pin. Set aside.


3. Line a sheet pan with parchment or oil a baking dish large enough to fit all of the vegetables in a single layer. If the carrots are small, just peel and trim the tops and bottoms. If they are medium-sized, peel, cut in half and cut into 4-inch lengths. Quarter large carrots and cut into 4-inch lengths. Trim the root ends and greens from the spring onions or scallions. If they are bulbous, cut them in half. Season with salt and pepper, add the thyme and olive oil and toss well, either directly on the pan or in the dish or in a bowl. Spread in an even layer in the baking dish or on the baking sheet.


4. Roast in the oven for 20 to 30 minutes, stirring every 10 minutes. The onions may be done after 10 minutes – they should be soft and lightly browned. Remove them from the pan if they are and hold on a plate. When the carrots and onions are tender and browned in places, remove from the oven. Add the onions back into the mix if you removed them and toss together. Sprinkle on the toasted ground hazelnuts, drizzle on the optional nut oil, and serve.


Yield: Serves 4


Advance preparation: The vegetables can hold for a few hours once roasted; cover and reheat in a medium oven.


Nutritional information per serving: 171 calories; 11 grams fat; 1 gram saturated fat; 1 gram polyunsaturated fat; 8 grams monounsaturated fat; 0 milligrams cholesterol; 16 grams carbohydrates; 6 grams dietary fiber; 89 milligrams sodium (does not include salt to taste); 2 grams protein


Martha Rose Shulman is the author of “The Very Best of Recipes for Health.”


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Wall Street Sheds Morning Gains


After beginning the day with a partial rebound from Monday’s steep drop, stocks on Wall Street gave up some of their gains Tuesday in the course of Congressional testimony by Ben S. Bernanke, the Federal Reserve chairman.


In afternoon trading, the Standard & Poor’s 500-stock index was up 0.1 percent, while the Dow Jones industrial average rose 0.6 percent. The Nasdaq composite index was down 0.2 percent.


In his prepared testimony before the Senate Banking Committee, Mr. Bernanke defended the Fed’s bond-buying program and said the economy was growing at a “moderate if somewhat uneven pace.” Senators were questioning him on the prospects for a global currency war and the potential economic effects of the latest budget impasse in Congress.


The major indexes fell more than 1 percent on Monday, with the S.&P. 500 recording its biggest daily drop since November. The falloff came as investors fretted that if Italy does not undertake reforms, the euro zone could once again be destabilized. The Euro Stoxx 50 index was off more than 3 percent in late trading Tuesday.


Groups in Italy opposed to economic reforms posted a strong showing in the recent election, resulting in a political deadlock with a comedian’s protest party leading the poll and no group securing a clear majority in Parliament.


“We’ve gone to an environment of political stability to instability, and until we get some type of clarity over who is in charge, which could take days, the market will have renewed concerns,” said Art Hogan, managing director of Lazard Capital Markets in New York.


Still, market participants speculated that a coalition government would eventually emerge in Italy and ease worries about a new euro zone crisis.


The early market gains suggested the recent trend of investors buying on dips would continue. Last week, concerns that the Federal Reserve might roll back its stimulus efforts earlier than expected prompted a sharp two-day decline, though equities recovered most of the lost ground by the end of the week.


“Investors are taking advantage of the drop, and once some kind of coalition government is formed, most of our concerns will be put to rest,” Mr. Hogan said.


Home Depot reported adjusted earnings and sales that beat expectations, sending shares up more than 5 percent.


Macy’s rose 3.1 percent after stating it expected full-year earnings to be above analysts’ forecasts because of strong sales in the holiday period.


For the benchmark S.&P. 500, 1,500 points will be watched as a key benchmark after the index closed below it on Monday for the first time since Feb. 4, with selling accelerating after falling below it. An inability to break back above it could portend further losses.


Financial shares may be among the most volatile, as that sector is closely tied to the pace of global economic growth. Morgan Stanley was one of the top percentage losers on the S.&P. on Monday, dropping more than 6 percent on concerns about the company’s exposure to European debt. It was up 0.4 percent.


This article has been revised to reflect the following correction:

Correction: February 26, 2013

Because of an editing error, an earlier version of this article misidentified the Senate panel before which Ben S. Bernanke, the Federal Reserve chairman, was testifying Tuesday. It was the Banking Committee, not the Finance Committee.




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Syria Willing to Talk With Armed Opponents, Foreign Minister Says





BEIRUT, Lebanon — Syria’s government is willing to hold talks with members of the armed opposition on ending the country’s nearly two-year-old civil war, the Syrian foreign minister said on Monday.




It was the first time that a high-ranking Syrian official signaled that the government was open to talking with Syrian rebels who have taken up weapons against the armed forces. Syria’s president, Bashar al-Assad, called in January for talks to resolve the conflict, but appeared to rule out dialogue with Syrians who were armed.


The new statement came as two opposition figures said that the main Syrian opposition leader, Sheik Ahmad Moaz al-Khatib, had already met quietly on at least one recent occasion with a prominent Syrian businessman with close ties to Mr. Assad, apparently in an effort to explore channels for discussion.


Both sides are under pressure from their international backers to explore ways to end the fighting that threatens to destroy Syria and spread conflict beyond its borders.


But Syrian opposition leaders gave conflicting signals on Monday on the future of any talks with members of Mr. Assad’s government.


The rebels’ top military leader, Gen. Selim Idriss, seemed to harden the opposition’s position, ruling out any negotiations until after Mr. Assad steps down — a precondition the Syrian government and its main international backer, Russia, reject. But Sheik Khatib said his offer to talk with members of the government without “blood on their hands” remained on the table, although he criticized what he called the Syrian government’s slowness to respond.


Russia declared last week that it would work with the Arab League to bring about direct talks between the government and the rebels, and Syria’s foreign minister, Walid al-Moallem, was meeting in Moscow on Monday with his Russian counterpart, Sergey V. Lavrov.


“We are ready for a dialogue with anyone who’s willing,” Mr. Moallem said ahead of the meetings, Russian news agencies reported. “Even with those who carry arms.”


It was unclear whether the Syrian government would ask rebels to lay down arms before such talks. The rebels have said before that they will reject such a precondition.


General Idriss, the leader of the Free Syrian Army, the main rebel fighter group, said that to the contrary, a cessation of violence by the government was “the bottom line” for rebels ahead of any talks. In remarks to Al-Arabyia, a Saudi-backed news Web site, General Idriss also said, “There needs to be a clear decision on the resignation of the head of the criminal gang Bashar Assad, and for those who participated in the killing of the Syrian people to be put on trial.”


The main opposition group, the National Coalition of Syrian Revolution and Opposition Forces, led by Sheik Khatib, had long insisted on Mr. Assad’s departure as a precondition for talks, but on Jan. 30, Sheik Khatib floated the idea of negotiations with members of the government not directly involved in the bloody crackdown.


On Friday after meetings in Cairo, the coalition adopted a written framework for talks that stopped short of calling for Mr. Assad to step down. It called for Mr. Assad and others involved in the killing to be “held accountable for their crimes” and declaring that they “will not be a part of this political solution.”


But many in the coalition remain skeptical of talks with the government and see them as a way for Mr. Assad to buy time, and are frustrated that the rebels are under pressure to compromise amid what they see as insufficient international support.


On Monday, Samir Nachar, a member of the coalition, said that Sheik Khatib had met in the past week with Muhammad Hamsho, a prominent Syrian businessman who is close to Maher al-Assad, the president’s brother who leads the army’s feared Fourth Division, and a frontman for many Assad family enterprises.


News of the meeting, which surfaced in the London-based pan-Arab newspaper Asharq al-Awsat, prompted a new round of criticism in some opposition quarters of Sheik Khatib. The newspaper quoted Faiek al-Meer, a member of the banned opposition Democratic People’s Party, as saying that Sheik Khatib had met with Mr. Hamsho without telling other coalition members.


Mr. Nachar said that Sheik Khatib had briefed him and other coalition members on the recent meeting, which he said had been initiated by Mr. Hamsho.


“Hamsho asked to meet Moaz al-Khatib and the latter agreed,” Mr. Nachar said in an interview. “The meeting did take place, yes. Al-Khatib was straightforward about it place but he refrained from going into details.”


Mr. Hamsho is one of several Syrian figures on whom the United States Treasury Department has imposed sanctions since Mr. Assad’s harsh crackdown on a peaceful protest movement that began in March 2011 and has since evolved into a civil war.


“Muhammad Hamsho earned his fortune through his connections to regime insiders, and during the current unrest, he has cast his lot with Bashar al-Asad, Mahir al-Asad and others responsible for the Syrian government’s violence and intimidation against the Syrian people,” David S. Cohen, under secretary for terrorism and financial intelligence, said in a statement in August 2011.


Sheik Khatib did not directly address the issue, but posted a message on his personal Facebook page cautioning against rumors.


Sheik Khatib told reporters in Cairo that he had not had any contacts with the Syrian government about potential meetings, and did not immediately respond to the offer from the Syrian foreign minister. He said that he would postpone a planned visit to Moscow “until we see how things develop,” The Associated Press reported.


He added, “We are always open to initiatives that stop the killing and destruction but the regime rejected the simplest of humanitarian conditions. We have asked that the regime start by releasing women prisoners and there was no response,” he said. “This regime must understand that the Syrian people do not want it anymore.”


Hania Mourtada contributed reporting.



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