BBC Inquiry Blames Rigid Management for Mishandling Sex Abuse Scandal

The 200-page report by Nick Pollard, a veteran British broadcast executive, strongly criticized the editorial and management decisions that prompted the BBC to cancel a broadcast last year that would have exposed decades of sexual abuse by Jimmy Savile, a BBC fixture who had been one of Britain’s best-known television personalities.

While the scandal led to the resignation and reassignment of several top executives — including George Entwistle, just two months into his tenure in the BBC’s top job as director general — Mr. Pollard absolved top management of applying “undue pressure” in the decision to stop the broadcast.

The report also did not challenge the assertions of Mark Thompson, then head of the BBC, that he had no role in killing the Savile investigation and was unaware of the sexual abuse accusations until he left the BBC this September. Mr. Thompson is now president and chief executive of The New York Times Company.

The report traced in detail what it described as “a chain of events that was to prove disastrous for the BBC.” Its central conclusion was that confusion and mismanagement, not a cover-up, lay at the heart of the decision to drop the Savile segment on “Newsnight,” an investigative program. Mr. Savile died at 84 in October 2011, weeks before the segment was scheduled to run.

“The efforts to get to the truth behind the Savile story proved beyond the combined efforts of the senior management, legal department, corporate communications team and anyone else for well over a month” after a rival channel, ITV, broadcast its own exposé in October 2012.

That segment presented the accounts of five women who said they had been sexually abused as teenagers by Mr. Savile, the report said. “Leadership and organization seemed to be in short supply.”

Mr. Pollard, a former head of the Sky News channel who began his broadcast career as a BBC reporter, dismissed a widely circulated theory that BBC News executives or their superiors pressured the “Newsnight” team to cancel the Savile segment to avoid embarrassing the BBC. Peter Rippon, the program’s editor, said that he canceled the report because he thought the team’s conclusions about Mr. Savile were inadequately substantiated.

“While there clearly were discussions about the Savile story between Mr. Rippon and his managers,” Mr. Pollard said, he does not believe that they went beyond journalistic considerations.

After publication of the report, Tim Davie, the BBC’s acting director general, said that Stephen Mitchell, the deputy director of news, would be taking early retirement and that Mr. Rippon would be moved to another job. Helen Boaden, director of the news division, who along with Mr. Rippon and Mr. Mitchell was suspended while the nine-week Pollard inquiry was in progress, will return to her job, overseeing new editorial leadership at “Newsnight.”

In a statement, the BBC Trust, which oversees the broadcaster, said the report made clear the need for major changes in the BBC’s operation. It said top executives must take initiative and responsibility, share information and embrace criticism, and persuade employees to rid the company of the “insularity and distrust” revealed in the report.

“The BBC portrayed by the Pollard review is not fundamentally flawed, but has been chaotic,” it said. “That now needs to change.”

The report was strongly critical of several news executives who were directly involved in the decision to cancel the Savile program, including Mr. Rippon and the top executives in the BBC’s news division to whom he reported, Ms. Boaden and Mr. Mitchell, saying they had reached a “flawed” conclusion in canceling the “Newsnight” segment that overrode the “cogent evidence” against Mr. Savile that the “Newsnight” team had gathered.

But it paid scant attention to the role of the former director general, Mr. Thompson, and did not fault him for missing opportunities to learn the details of the allegations against Mr. Savile.

After Mr. Thompson was told about the scuttled segment by a BBC reporter at a reception in late December 2011, he said, he asked his news executives about it. According to his testimony to the Pollard inquiry, he “received reassurances” that it had been killed for “editorial or journalistic reasons” and “crossed it off my list and went off to worry about something else.”

Matthew Purdy contributed reporting from New York.

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Bork, whose failed Supreme Court nomination made history, dies

Robert H. Bork, who stepped in to fire the Watergate prosecutor at Richard Nixon's behest and whose failed 1980s nomination to the Supreme Court helped draw the modern boundaries of cultural fights over abortion, civil rights and other issues, has died. He was 85.

Son Robert H. Bork Jr. confirmed the death Wednesday. His father had a long career in politics and the law that took him from respected academic to a totem of conservative grievance.

Bork was accused of being a partisan hatchet man for Nixon when he fired Watergate special prosecutor Archibald Cox in the Saturday Night Massacre of 1973.

Bork's drubbing during the 1987 Senate nomination hearings made him a hero to the right and a rallying cry for younger conservatives.

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Text Adventure: <cite>Zork</cite> Creators Honored With Pioneer Award

In the days before graphics, computer games had to entice players with nothing more than a well-turned phrase.

Whether you prefer to call them “text adventures” or “interactive fiction,” games played with nothing but writing and verbal commands were a significant part of the early days of interactive entertainment. At the forefront of the medium were the designers of Infocom, which created and published text games like Zork, Starcross and The Hitchhiker’s Guide to the Galaxy that delighted players with clever writing and had them absolutely tearing their hair out with difficult puzzles.

Today, Wired can exclusively report that Marc Blank and Dave Lebling, two of the co-founders of Infocom and co-creators of Zork, will be honored with the Academy of Interactive Arts and Sciences’ Pioneer Award at the DICE Summit in February. The award is given to the gamemakers whose groundbreaking early work laid the foundations of the multi-billion-dollar videogame industry. Previous recipients include David Crane, creator of Pitfall!, and Asteroids designer Ed Logg.

Wired spoke to Dave Lebling, as well as another Infocom designer, for this story. But in honor of their achievements and their medium of choice, we’ve decided to present the results of our interviews in a text adventure of our own, below. You’ll have to play to find out more.

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“Best Funeral Ever” premiere delayed after Newtown school shootings

LOS ANGELES (TheWrap.com) – Fans of death-centric reality TV will have to wait a little longer to dig into TLC‘s “Best Funeral Ever.”

TLC has pushed back the premiere of the special to January 6 at 10/9c in light of the school shootings in Newtown, Conn. last week.

“Best Funeral Ever” was initially scheduled to premiere on December 26 at 8/7c.

“Best Funeral Ever” centers around the Golden Gate Funeral Home in Dallas, which specializes in elaborate specialty funerals catering to the deceased’s interest. In the special, a doo-wop singer famous for his rib-sauce jingle receives a barbecue-themed sendoff, while a disabled man who was unable to ride roller coasters in mortal life receives a State Fair-themed funeral.

Since last Friday’s horrific shootings, a number of programs and other entertainment-related events have been moved out of sensitivity. Syfy, for one, decided not to air its scheduled episode of “Haven” on Friday night, because it contained elements of fictionalized school violence.

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Newport Beach dock renters may withhold holiday love

Marcy Cook embraces the holiday season. The tell? Start with the teddy bears dressed as Santa. More than 1,500 stand sentry around and inside her Newport Beach waterfronthome. Garland and strings of lights threaten to strangle the place like kudzu.

"We decorate a little bit, if you haven't noticed," said Cook, 69. "It's the highlight of the year for us."

Each Christmas, Newport Harbor is ablaze in lights as homeowners go to extraordinary lengths to complement the city's annual Christmas Boat Parade — an indelible tradition that renews itself Wednesday night and continues through Sunday.

But this has been a stressful season here along the tranquil waterfront lined with multimillion-dollar homes.

An increase in city rental fees for residential docks that protrude over public tidelands created a furor when it was approved last week by the City Council.

It also prompted a call to boycott the boat parade and festival of lights by a group calling itself "Stop the Dock Tax."

"It costs us thousands of dollars to voluntarily decorate our homes and boats to bring holiday smiles to nearly 1 million people," organization Chairman Bob McCaffrey wrote to the city. "This year, we are turning off our lights and withdrawing our boats in protest of the massive new dock tax we expect the City Council to levy."

Pete Pallette, a fellow boycott proponent and harbor homeowner, told city leaders the group would call off the boycott only if the council delayed voting on the rent hike. "Otherwise," he vowed, "game on."

In a place where homes come with names and mega-yachts bob in the harbor, it might appear the wealthy are wielding a weapon most often reserved for the masses. A holiday blackout, proponents say, will underscore their displeasure.

Newport's dock fee, which has stood at $100 a year for the last two decades, will now be based on a dock's size. The city says rents will increase to about $250 for a small slip to $3,200 annually for a large dock shared by two homeowners.

"People have been paying $8 a month all these years to access what is public waters," said Newport Beach City Manager Dave Kiff. "That's a pretty good deal. The City Council didn't think the increase it approved was too extreme."

Many did.

They packed council meetings when the hike was discussed, accusing the city of an excessive money grab.

They brushed aside the city's rationale: Statelawmandates cities charge fair market rents for the private use of public lands, and Newport Beach was only now catching up.

And they were unmoved by arguments that the extra revenue will go exclusively to badly needed repairs to a harbor that, despite outward appearances, needs a lot of work.

The city's five-year plan for the harbor calls for $29 million in long-overdue maintenance. Its silt-filled channels haven't been fully dredged since the Great Depression. Ancient, leaky sea walls protecting neighborhoods need to be repaired or replaced.

"We have the makings of a perfect storm like they did on the East Coast" during Superstorm Sandy, said Chris Miller, the city's harbor resources manager. "The sea walls are nearing the end of their useful life."

Even with the rent increases, Newport's dock owners will contribute a tiny fraction of that cost — the rest coming from the federal government and the city's general operating fund.

As dock owners fumed over having to pay more, others recoiled at the proposed boycott of the boat parade, which dates to 1908 when a single gondola led eight canoes illuminated by Japanese lanterns around the harbor. It has now swelled to a decent-sized armada of dozens of boats — some carrying paying customers — that circle past the decorated harbor-front homes.

"The boycott is ridiculous," said Shirley Pepys, whose frontyard on Balboa Island has been taken over by a family of penguins dressed for a Hawaiian luau.

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Intellectual Ventures: Why the Patent System Needs Aggregators Like Us

The U.S. patent system borrowed from mainland Europe a concept that had evolved over hundreds of years: the “moral right” for inventors to protect their ideas. But America’s founders went even further – they also included the obligation for inventors to publish.

This extra part of the deal was ingenious: It has been key to America’s history as a global leader in innovation.

Because inventors were incentivized by protection, yet still obligated to publish, their ideas became available for everybody to see. Not only did this increase the global pool of knowledge, it also allowed follow-on developers to avoid the blind alleys experienced by the original inventor.

The published patent also provides a roadmap to further innovation: the work-around. When developers become too enamored with popular features, they stop innovating. By preventing access to such successful features, patents conversely force competitors to come up with the new ideas or workarounds that lead to fresh innovation.

But as technologies converge and the products we use become increasingly complex, the system needs intermediaries within the market – companies like Intellectual Ventures – to help sift through and navigate the published landscape. By developing focused expertise, these patent licensing entities and intermediaries can function as patent aggregators, assembling portfolios of relevant inventions and providing access through licensing.

Yes, sometimes aggregators have to go to court to protect their patent rights – and get labeled with all kinds of nasty names for doing so.

But we believe it is worth fighting for a marketplace where invention rights are respected and can be efficiently accessed. Especially in a world where the products we use every day – our smartphones, our cars, our computers, and televisions – have rapidly increased in complexity.

Today’s smartphone is a high-definition camera, a camcorder, a GPS navigation device, a videogame system, a calculator, and a powerful computer. It’s a text-messaging, e-mailing, VoIP-ing machine that can make calls from nearly anywhere using a complex system of cell towers, servers, routers, and fiber optics. Just a few years ago, that combination would have cost thousands of dollars – and each of those products would have been protected by hundreds or thousands of cross-licensed, exchanged, and litigated patents.

You would have needed a shopping cart to haul all of the different devices you now carry as a single device in your pocket. But with today’s technology complexity and convergence, products like smartphones incorporate more patents in a single device than their less-complex predecessors.

So there’s now a long tail of relevant technologies in these products. The inventions behind and in them weren’t only created by large companies, but by small companies as well as individual inventors. As products get more complex, this tail just gets longer and more diffuse – which makes it much more difficult to recognize (and reward) the contributions of inventors down the tail.

Despite this complexity, we must maintain the founding principle of the U.S. patent system – providing an incentive for inventors to create without fear of being ripped off. Only then can inventors continue to focus on doing what they do best: inventing. Society benefits when the value of ideas is recognized.

However, navigating the long tail of technology patents requires a significant amount of niche expertise, time, and other resources. This is where patent aggregators come into play.

Patent aggregators sift through the issued patents with an expert eye, and provide efficient access to the long tail of patents. When tens of thousands of patents touch a product, hundreds of inventors spread around the globe deserve to be paid. But in the race to market, product companies often ignore the long tail; small inventors have very little power to do anything about this unless they can enlist the help of patent aggregators.

Perhaps more importantly, patent aggregators can provide a certain “objectivity” that other players in the patent ecosystem cannot. Product companies, for example, are incentivized to exercise their patent rights to exclude – leading the market through exclusion rather than innovation.

But aggregators, in order to maximize returns from the patents they’ve acquired, are incentivized to package and license patents as broadly as possible. If patents are available to all-comers, not just used to exclude, companies can focus on improving their products and competing through innovation.

Product companies are incentivized to lead the market through exclusion rather than innovation.

Aggregators also provide a signal to the market as the debate around patent quality continues. Every time Intellectual Ventures purchases a patent, we are making a bet that it is a quality patent. We purchase only 15 percent of the tens of thousands of patents we review, drawing on and continually building the expertise of our acquisitions team. Sometimes patents come as a package deal so we have to buy 10 to get the six or seven we really want, which is why only 40,000 of our 70,000 assets are in active licensing programs. But we continuously prune our portfolio to maximize quality – thus helping the market navigate the long tail of patents.

The many great – and complex – technology products we have today have created the tumultuous situation we’re in. Patent aggregators provide an economically feasible system for compensating the inventors in the long tail. But they also provide rights to the companies making the complex products and inventions we rely on.

Ultimately, the users of those products – you – are the ones who benefit.

Editor’s Note: Given the enormous influence of patents on technology and business – and the complexity of the issues involved – Wired is running a special series of expert opinions representing perspectives from academia and corporations to other organizations. This piece represents the perspective of the only non-practicing entity (in this case, solely a patent licensing entity) in the series.

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Florida man sentenced to 10 years in “hackerazzi” case

LOS ANGELES (Reuters) – A Florida man who pleaded guilty to hacking into the email accounts of celebrities to gain access to nude photos and private information was sentenced to 10 years in prison by a federal judge in Los Angeles on Monday.

Former office clerk Christopher Chaney, 36, said before the trial that he hacked into the accounts of film star Scarlett Johansson and other celebrities because he was addicted to spying on their personal lives.

Prosecutors said Chaney illegally gained access to email accounts of more than 50 people in the entertainment industry, including Johansson, actress Mila Kunis, and singers Christina Aguilera and Renee Olstead from November 2010 to October 2011.

Chaney, who was initially charged with 28 counts related to hacking, struck a plea deal with prosecutors in March to nine felony counts, including wiretapping and unauthorized access to protected computers.

“I don’t know what else to say except I’m sorry,” Chaney said during his sentencing. “This will never happen again.”

Chaney was ordered to pay $ 66,179 in restitution to victims.

Prosecutors recommended a 71-month prison for Chaney, who faced a maximum sentence of 60 years.

TEARFUL JOHANSSON

Prosecutors said Chaney leaked some of the private photos to two celebrity gossip websites and a hacker.

Johansson said the photos, which show her topless, were taken for her then-husband, actor Ryan Reynolds.

In a video statement shown in U.S. District Court in Los Angeles, a tearful Johansson said she was “truly humiliated and embarrassed” when the photos appeared online, asking Judge S. James Otero to come down hard on Chaney.

Prosecutors said Chaney also stalked two unnamed Florida women online, one since 1999 when she was 13 years old.

Chaney, a native of Jacksonville, Florida, was arrested in October 2011 after an 11-month FBI investigation dubbed “Operation Hackerazzi” and he continued hacking after investigators initially seized his personal computers.

Shortly after his arrest, Chaney told a Florida television station that his hacking of celebrity email accounts started as curiosity and later he became “addicted.”

“I was almost relieved months ago when they came in and took my computer … because I didn’t know how to stop,” he said.

(Reporting by Eric Kelsey; Editing by Jill Serjeant and Andrew Hay)

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The Doctor’s World: BMJ’s Holiday Tradition of Lighthearted, but Rigorous, Scholarship

LONDON — Dutch and Norwegian scientists say they have solved a glowing mystery: why Rudolph the reindeer’s nose is red.

By traveling to the Arctic and using video-microscope and thermal imaging technology, the scientists showed that the glow is from tiny blood vessels that are more abundant in the noses of reindeer than in humans’. Yes, seriously. The findings are being reported next week in BMJ, formerly known as The British Medical Journal, a publication with a quirky holiday tradition.

For the past 30 years, BMJ has devoted its Christmas-week issue to a lighter and sometimes brighter side of medicine, publishing unusual articles that vary from simply amusing to bizarre to creative or potentially important. All are based on methodologically sound science.

Alongside Rudolph on the cover of this year’s holiday issue is Cliff, a 2-year-old beagle who was trained by another Dutch team to accurately sniff out the sometimes fatal bacterial bowel infection Clostridium difficile and make the diagnosis in minutes — days faster than standard laboratory tests. The Christmas tradition began in 1982, originally intended as a one-time effort to give readers a break from stodgy scientific reports written in technical jargon. The editor then, Dr. Stephen P. Lock, recalled in an interview that he wanted to present “another side of medicine” by offering lighter reading: research oddities, bizarre stories and history. But this was no April fools’ issue: Dr. Lock insisted that the articles meet the same rigorous criteria as research published in regular issues.

Indeed, some articles in the holiday issue are also suitable for regular issues, said Dr. Tony Delamothe, the BMJ deputy editor who has overseen the last eight Christmas issues. “We are on an incessant search for novelty,” he said.

Over the years, BMJ Christmas reports have demolished myths, including a Danish one that people could get drunk by absorbing alcohol through the feet. After soaking their feet for three hours in a basin containing three bottles of vodka and measuring their blood alcohol levels, three Danish scientists found no such absorption.

The first Christmas issue included an account of a resuscitation from 1650 that still astounds today. An unwed 22-year-old mother in Oxford was condemned to death after being accused of murdering her premature, stillborn son and concealing his body. She was executed by hanging by the neck for half an hour while people present jerked her up and down.

At the time, the bodies of executed prisoners were given to doctors for anatomical dissection. Two doctors who opened the woman’s coffin were startled to hear raspy breaths. They revived her, and she went on to recover her memory and live another 15 years, marrying and giving birth to three children. The 17th-century doctors’ report met the criteria for a modern case report, wrote J. Trevor Hughes, the author of the 1982 article.

Dr. Lock, the editor, also encouraged historical back stories. In 1984, Dr. Charles Fletcher wrote about how he tested ways to safely administer the first precious batches of penicillin in 1941. The initial full test was on a 43-year-old British policeman who developed the widespread bacterial infection septicemia. He showed striking improvement from small doses of the antibiotic, but he died after the scarce supply — much of it recycled from his urine — ran out.

Many Christmas issue accounts would have upset earlier BMJ editors “like mad,” Dr. Lock said. “But so what?” he added. “It was fun.” Now there is so much competition for a spot in the issue that some authors submit papers early in the year and request publication at Christmastime.

Some articles poke fun at hoary traditions, such as diagnosing ailments in historical figures despite the lack of medical evidence. Mozart is a special favorite of armchair diagnosticians, Dr. Lucien R. Karhausen wrote in 2010 after tabulating articles reporting 140 possible causes of death and 27 mental disorders in the composer. Many, he said, were based on shoddy medical interpretations, undocumented “eyewitness accounts” or the ignoring of criteria that separate normal and abnormal behavior.

“Some causes are plausible,” Dr. Karhausen wrote, “only a few — maybe one, or maybe none of them — can be true, so most if not all are false.”

In 2006, BMJ reported on the results of a questionnaire sent to 110 members of the Sword Swallowers’ Association International. Forty-six members responded; they reported having swallowed more than 2,000 swords in the three preceding months. Sore throats (“sword throats”) were common during the learning phase, and after frequent repeated performances. Swallowers rarely sought medical advice. Of six who perforated their pharynx or esophagus, three needed surgery. No deaths were reported.

Still other articles play on the vanity of doctors, many of whose names are attached to instruments and syndromes. An article in 2010 extended the list to food products developed by doctors, including Kellogg’s Corn Flakes, various cookies, and Penfolds and Lindeman’s, the Australian wines.

As for the animals featured in this year’s holiday issue: The story of the infection-sniffing beagle began with a report from a nurse in the Netherlands, who mentioned that a patient’s stool had the distinctive odor of C. difficile — a bacterium that is causing serious and growing public-health problems in many countries, including the United States.

A team led by Dr. Marije K. Bomers at the VU University Medical Center in Amsterdam reasoned that it might be possible to train dogs to detect the infection, and Cliff the beagle did just that.

Cliff was trained to sit or lie down when he smelled C. difficile in the air walking by a patient’s bedside, and he also quickly and accurately identified all 50 stool samples with C. difficile and 25 of 30 infected patients — along with 50 stool samples free of the bacteria and 265 of 270 uninfected patients.

And the Dutch team that studied reindeer, working with researchers at the University of Tromso in the Norwegian Arctic, used a hand-held video microscope to observe the deer’s nasal capillaries as they ran on a treadmill.

The capillaries are arranged in circular clusters at different locations through the nose. Those in reindeer noses are 25 percent thicker than those observed in the human nose and are believed to perform critical roles like heating, delivering oxygen and humidifying inhaled air to keep the animal’s nose from freezing. (The leader of the team, Can Ince, a physiologist at Erasmus University Medical Center in Rotterdam, says he has a financial interest in the company that manufactures the technology, which is used to monitor reactions to various drugs and therapies among critically ill human patients.)

By showing that a large number of red blood cells flowed through the small nasal vessels, the scientists said they had unlocked the mystery of Rudolph’s red nose. May it long glow.

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DealBook: Massachusetts Fines Morgan Stanley Over Facebook I.P.O.

10:48 a.m. | Updated Morgan Stanley is paying for its role in the troubled stock market debut of Facebook.

On Monday, Massachusetts’s top financial authority fined the bank $5 million for violating securities laws, the first major regulatory action tied to Facebook’s initial public stock offering.

William F. Galvin, the secretary of the commonwealth of Massachusetts, accused the bank of improperly influencing the stock offering process. The regulator’s consent order asserts that a senior Morgan Stanley banker coached Facebook on how to share information with stock analysts who cover the social media company, a potential violation of a landmark legal settlement with Wall Street. While the banker never contacted the analysts directly, his actions, Mr. Galvin said, put ordinary investors at a disadvantage because they lacked access to the same research.

“The broader message here is we are going to use any means possible to enforce the strict code in place about giving out information,” Mr. Galvin said in an interview. “We want to get the message across that if Wall Street wants to get confidence back, they can’t disadvantage Main Street.”

The consent order did not name the Morgan Stanley banker, referring to him as a “senior investment banker.” But information in the regulator’s order indicated that it was Michael Grimes, one of the nation’s most influential technology bankers.

“Morgan Stanley is committed to robust compliance with both the letter and the spirit of all applicable regulations and laws,” a Morgan Stanley spokeswoman, Mary Claire Delaney, said. Morgan Stanley, in settling the case, neither admitted nor denied guilt.

Mr. Grimes, through Ms. Delaney, declined to comment. Although the banker was referred to in the order, Mr. Grimes has not been personally accused of any wrongdoing.

The fine is a small dent in the firm’s overall profit from the Facebook public offering. Morgan Stanley received approximately $68 million in underwriting fees for the IPO, according to data provider Thomson Reuters.

Still, the costs associated with the botched I.P.O. are rising. In addition to Mr. Galvin’s fine, the firm agreed to compensate some customers who overpaid when they bought Facebook shares because of a technical glitch at the Nasdaq.

The Facebook public offering was one of the most highly anticipated debuts of the last decade. In the run-up to the offering, investor interest was robust, prompting the company to increase the size of the offering and raise the share price to $38.

But the I.P.O. quickly turned into a debacle. The first day of trading was plagued with problems. The shares quickly fell below their offering price. The stock closed on Monday at $26.75.

Since the offering, Mr. Galvin and other regulators have opened wide-ranging investigations into Facebook and the banks that handled its debut. The continuing inquiries by the Securities and Exchange Commission and the Financial Industry Regulatory Authority are examining how the banks disseminated nonpublic information to big investors — and whether it conflicted with Facebook’s public disclosures.

Regulators are also looking into Nasdaq, the exchange where Facebook trades. They are questioning whether the exchange failed to properly test its trading systems, which faltered during the stock offering.

The Massachusetts regulator is focused on Morgan Stanley’s communications with analysts.

Shortly before the Facebook offering, analysts at several banks lowered their growth estimates for the social network. The move came after Facebook issued an amended prospectus, detailing a potential slowdown in revenue.

A Facebook executive, whose name was not given in the order but who was referred to as the treasurer, also reached out to analysts. Mr. Galvin’s order asserted that the executive, in private conversations with analysts, had provided additional information on the revenue. The order indicated that Mr. Grimes was personally involved in the decision to file the new prospectus and to have Facebook communicate with analysts.

“Morgan Stanley’s senior investment banker did everything but make the phone calls himself,” the Massachusetts regulator said in a statement, referring to Mr. Grimes. “He not only rehearsed with Facebook’s treasurer who placed the calls to the research analysts, but he also drafted the majority of the script Facebook’s treasurer utilized.”

Just 12 minutes after filing the amended prospectus with regulators on May 9, the Facebook treasurer phoned Wall Street research analysts from her hotel, according to the order. She had a 15-minute conversation with Morgan Stanley analysts, and then spoke with JPMorgan Chase and other banks.

The calls provided the analysts with additional information that did not appear in the amended prospectus, the order said. The conversations, for example, included “quantitative information regarding Facebook’s” second-quarter 2012 projections.

This behavior, Mr. Galvin said, crossed the line, violating the regulatory settlement on stock research that Morgan Stanley and other companies signed in 2003. The agreement limits the communication between bankers and research analysts and bans companies from influencing stock reports to try to bolster banking operations.

The Morgan Stanley case falls into a curious gray area.

Bankers spend months preparing companies to go public, a role that includes providing guidance on research analysts. In this instance, Mr. Grimes did not personally place the calls, which would have been a clear violation of securities laws.

In his testimony before the Massachusetts regulator’s staff, Mr. Grimes indicated that the bank had pushed for Facebook to file publicly an amended prospectus to avoid “the appearance” that the company was sharing information with a select group of clients rather than broadly with investors. Mr. Grimes, the order noted, consulted with Morgan Stanley and Facebook lawyers. Ultimately, Facebook’s chief financial officer, David A. Ebersman, e-mailed the company’s board to say that the new filing would “help us to continue to deliver accurate” information without “someone claiming we are providing any selective disclosure.”

Mr. Grimes, in testimony with the regulator, further defended his role. While the Facebook treasurer was making the calls, he noted that “I was far down the hall so I wouldn’t hear anything.”

Even so, Mr. Grimes, according to the consent order, e-mailed Mr. Ebersman to say that the Facebook treasurer “was a champ in the hotel tonight,” after the treasurer wrapped up the calls.

A version of this article appeared in print on 12/18/2012, on page B1 of the NewYork edition with the headline: Morgan Stanley Is Fined Over Facebook I.P.O. Role.

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U.S. moves ahead on new downtown L.A. courthouse

Downtown Los Angeles is finally getting its new federal courthouse, and it's going to stand out amid the aging government buildings in the Civic Center.

A 550,000-square-foot courthouse — planned for the southwest corner of Broadway and 1st Street, across from the old county law library and the Los Angeles Times building — will feature a bright, serrated facade and a structural design that allow the structure to appear to float over its stone base, officials said.

It will have a public plaza along 1st Street near recently opened Grand Park. Officials say the building's design has received a "platinum" rating for energy efficiency from the U.S. Green Building Council.

The U.S. General Services Administration is moving forward on the project despite last-minute opposition from some Republicans in Congress, who question the viability of the agency's plans to sell the federal courthouse on North Spring Street to private developers. The lawmakers also questioned whether the extra courtrooms were actually necessary.

The GSA awarded a $318-million contract last week to the architecture firm Skidmore, Owings & Merrill and Clark Construction Group, and released several renderings of the proposed design. The building will rise on a 3.6-acre lot on Broadway that city officials have long wanted to develop.

"We are moving toward the groundbreaking of a critically needed facility that will resolve long-standing security and space issues," Rep. Lucille Roybal-Allard (D-East Los Angeles) said in a statement. "At a time when we need to keep investing in our recovering economy, we expect the courthouse to create thousands of new jobs in the construction industry and related businesses."

Peter Zellner, faculty member at Southern California Institute of Architecture, noted that the courthouse design in some ways is reminiscent of Mid-Century architectural styles of other Los Angeles government centers, particularly the Wilshire Federal Building. Zellner also suggested the architects consider the courthouse plaza as part of a chain of public spaces spilling down from the Walt Disney Concert Hall.

The courthouse will include 24 courtrooms and 32 judicial chambers. Along with the judges of the U.S. District Court, the building will be used by the U.S. Marshals Service, U.S. attorneys' office and the Federal Public Defender.

Federal judges have been pushing for new space downtown since the late 1990s. In addition to the Spring Street courthouse, federal judges occupy space elsewhere in downtown, but they have complained about overcrowding and security issues.

Construction on the courthouse is expected to begin sometime next year, with completion set for 2016, the GSA said.

The agency also announced that it had released a formal "request for information" to solicit ideas for adaptive reuse of one of the old federal courthouses, on North Spring Street. Under the agency's plan, the 72-year-old building would be sold to a private developer, with the proceeds to help finance construction of a second federal office building next to the new courthouse.

Some real estate experts have questioned whether the exchange proposal would be feasible, saying it could be difficult for a private owner to adapt the old courthouse because of its structural issues, location and historic status. And the Republican critics of the courthouse plan expressed concern that if the GSA could not manage to sell the old courthouse, it would be stuck with a vacant building and higher costs to taxpayers.

There is still no specific timeline on when the exchange would be made, a GSA spokeswoman said, but officials remain upbeat about the plan.

"This step is just another example of GSA's commitment to providing real value to the American public," said acting GSA Administrator Dan Tangherlini.

sam.allen@latimes.com

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