Jesse Jackson Jr. resigns, acknowledges federal probe

Rep. Jesse Jackson resigned from Congress Wednesday, saying in a letter that he is cooperating with a federal investigation "into my activities" but blaming his health problems for his decision to step down just two weeks after his re-election.

Jackson's letter to House Speaker John Boehner was his first acknowledgment of the ongoing corruption probe into his alleged misuse of campaign dollars.

"I am doing my best to address the situation responsibly, cooperate with the investigators, and accept responsibility for my mistakes, for they are my mistakes and mine alone," Jackson said in the two-page letter dated Nov. 21. "None of us is immune from our share of shortcomings or human frailties and I pray that I will be remembered for what I did right."

Despite his admission of "my share of mistakes," Jackson said his deteriorating health was the reason he was quitting. He has been on medical leave since June while receiving treatment for bipolar depression.

"Against the recommendations of my doctors, I had hoped and tried to return to Washington and continue working on the issues that matter most to the people of the Second District. I know now that will not be possible," Jackson said in the letter.

"My health issues and treatment regimen have become incompatible with service in the House of Representatives. Therefore, it is with great regret that I hereby resign as a member of the United States House of Representatives, effective today, in order to focus on restoring my health," Jackson wrote.

The congressman could not be reached.

Hours after the letter was submitted, Jackson's attorneys -- including former federal prosecutor Dan Webb -- released a statement saying any "resolution" of the federal probe could be months away.

“Mr. Jackson is cooperating with the investigation," the statement read. "We hope to negotiate a fair resolution of the matter but the process could take several months. During that time, we will have no further comment and urge you to give Mr. Jackson the privacy he needs to heal and handle these issues responsibly.”

Jackson, 47, won election this month while being treated at the Mayo Clinic in Rochester, Minn. and issued a statement on election night saying he would return to work once his doctors approved.

"Once the doctors approve my return to work, I will continue to be the progressive fighter you have known for years," said Jackson, no longer a patient at Mayo. "My family and I are grateful for your many heartfelt prayers and kind thoughts. I continue to feel better every day and look forward to serving you."

He has not appeared in the House since June 8. Nor did he stage a campaign event -- or even run a TV ad. Jackson advanced to the general election after defeating a one-term member of Congress, Debbie Halvorson, in a March primary.

The next Congress will be sworn in Jan. 3 and Jackson would have been required to take the oath of office before being allowed to vote.

News of the resignation on the eve of Thanksgiving, when Congress was not meeting and many Washingtonians were traveling, seemed to take even Jackson staffers by surprise.
 
His press secretary, Frank Watkins, said Wednesday morning that he didn’t know anything about a possible resignation. Watkins attributed the rumors to press speculation.

House Minority Leader Nancy Pelosi, D-Calif., said in a statement that she had spoken to Jackson and his father, the Rev. Jesse Jackson, earlier in the afternoon.
 
“As he works to address his health, our thoughts and prayers are with him, his wife Sandi, his children as well as his parents," she said in a statement. "We are grateful to him and his family for their longstanding record of public service to our country.”

The House adjourned Friday and reconvenes at 2 p.m. Tuesday.  Protocol calls for Jackson's letter to be placed before the House on Tuesday and his resignation noted then, an official said. Normally the House has 435 members, but there is now one vacancy, so Jackson's will be a second.

Under Illinois law, Gov. Pat Quinn, a fellow Democrat, would call a special election to fill Jackson’s 2nd District congressional seat, which extends from Chicago’s South Side to Kankakee. Quinn has five days to set a schedule for the election. Election law says it must be held within 115 days.

Jackson's resignation, long suspected by political insiders, set off a scramble with as many as a dozen names of potential successors already surfacing. They range from political has-beens to up-and-comers in the south suburban district.

Jackson has been under investigation by the House Ethics Committee for alleged improprieties related to his bid to win appointment in 2008 to the Senate seat that had been held by President Barack Obama. A Jackson emissary is alleged to have offered to raise up to $6 million in campaign funds for disgraced former Gov. Rod Blagojevich in exchange for the governor appointing Jackson to the Senate seat.

Blagojevich is serving a prison term for corruption convictions including trying to sell or trade the Senate seat.

After the March primary election, the congressman’s aides belatedly announced his medical leave, which at first was blamed on “exhaustion.”

He is the son of the Rev. Jesse Jackson, the civil rights leader, and the husband of Chicago Ald. Sandi Jackson, 7th.

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In HP-Autonomy debacle, many advisers but little good advice

(Reuters) - When Hewlett Packard acquired Autonomy last year for $11.1 billion, some 15 different financial, legal and accounting firms were involved in the transaction -- and none raised a flag about what HP said Tuesday was a major accounting fraud.

HP stunned Wall Street with the allegations about its British software unit and took an $8.8 billion writedown, the latest in a string of reversals for the storied company.

HP Chief Executive Meg Whitman, who was a director at the company at the time of the deal, said the board had relied on accounting firm Deloitte for vetting Autonomy's financials and that KPMG was subsequently hired to audit Deloitte.

HP had many other advisers as well: boutique investment bank Perella Weinberg Partners to serve as its lead adviser, along with Barclays. Banking advisers on both sides of the deal were paid $68.8 million, according to data from Thomson Reuters/Freeman Consulting.

Barclays pocketed the biggest banker fee of the transaction at $18.1 million and Perella was paid $12 million. The company's legal advisers included Gibson, Dunn & Crutcher; Freshfields Bruckhaus Deringer; Drinker Biddle & Reath; and Skadden, Arps, Slate, Meagher & Flom, which advised the board.

On Autonomy's side of the table were Frank Quattrone's Qatalyst Partners, which specializes in tech deals and which picked up $11.6 million.

UBS, Goldman Sachs, Citigroup, JPMorgan Chase and Bank of America were also advising Autonomy and were paid $5.4 million each. Slaughter & May and Morgan Lewis served as the company's legal advisers.

While regulators in the United States and the United Kingdom, as well as the Federal Bureau of Investigation, are likely to spend many months if not years investigating what happened, legal experts said on Tuesday that it wasn't clear if any of the advisers would ultimately be held liable.

"The most logical deep pocket would be the acquired firm's auditors, who should have allegedly caught these defalcations," said James Cox, a professor at Duke University law school who specializes in corporate and securities law. Since both auditors missed the problems and it appeared to have taken HP a while to catch it after it took over Autonomy, the auditors may have a strong defense.

"You can have a perfectly sound audit and still have fraud exist," he said. A Deloitte UK spokesman said the company could not comment and would cooperate with any investigations.

The law firms and the bankers will likely argue that they were not hired to review the bookkeeping and had relied on the opinion of the auditors, securities law experts said.

Multiple sources with knowledge of the HP-Autonomy transaction added that the big-name banks on Autonomy's side were brought in days before the final agreement was struck. These sources said the banks were brought on as favors for their long relationships with the companies, in a little-scrutinized Wall Street practice of crediting -- and paying -- investment banks that actually have little do with the deal.

LAWSUITS, REPUTATIONS AT STAKE

Plaintiffs lawyers said they were taking calls from investors about HP on Tuesday. Darren Robbins, a San Diego-based plaintiff lawyer who represents shareholders, said the tech icon appears to have spent billions on a shoddy company without undertaking the proper due diligence, and thus misrepresented its finances to investors.

"I think they have serious troubles," he said.

But plaintiff lawyers may have difficulty bringing so-called derivative lawsuits against professional services firms, said Brian Quinn, an M&A professor at Boston College Law School. In those cases, plaintiff lawyers can sue third parties, such as auditors, on behalf of HP -- but they must convince a judge that HP's board is unfit to pursue those claims itself. In this situation, though, HP's board disclosed the alleged fraud itself, Quinn said.

Even if the bankers and lawyers escape any legal problems, they could suffer a reputational hit. The scrutiny could be particularly unwelcome for Perella Weinberg: the firm advised Japanese camera maker Olympus' acquisition of British Gyrus -- a transaction that prompted investigations in the United States, United Kingdom and Japan into fees and payments made by Olympus.

Olympus had hired Perella to execute the transaction, which included a fee paid to "advisers" of $687 million - way beyond the usual scale for a transaction valued at only $2 billion. Perella was not implicated in the matter.

Meanwhile, the most controversial banker involved in the HP-Autonomy deal, Frank Quattrone of Qatalyst, represented Autonomy and played a key role in getting HP to pay a high price.

A star investment banker in the 1990s, Quattrone had worked at Morgan Stanley, Deutsche Bank and Credit Suisse, and helped arrange some of the biggest tech initial public offerings of the era, including Amazon.com Inc and Cisco Systems Inc.

But his time at the top of Silicon Valley was curtailed by charges that he blocked an investigation into IPO kickbacks. After two trials failed to resolve his case, he ultimately reached a deal with prosecutors.

His return to the Silicon Valley M&A scene has impressed many in the tech world.

"His reputation is at an all-time high right now," said Dan Scheinman, the former head of mergers and acquisitions at Cisco who has worked with Quattrone on several deals.

Analysts almost uniformly deemed the $11.1 billion he got HP to pay for Autonomy as overly rich -- a compliment to him at the time, but possibly a hollow success if HP's allegations prove true.

(Reporting By Nadia Damouni and Nicola Leske in New York and Andrew Callus in London. Additional reporting by Dan Levine in San Francisco.; Editing by Peter Lauria, Jonathan Weber, Muralikumar Anantharaman, Janet McBride)

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Boxer 'Macho' Camacho critical in Puerto Rico

SAN JUAN, Puerto Rico (AP) — Hector "Macho" Camacho was clinging to life Wednesday after being shot in the face while in a car, with doctors and his family expected to decide whether to remove the former boxing champion from life support.

Doctors initially had said Camacho was in critical, but stable condition and expected to survive after he was shot Tuesday night in his hometown of Bayamon. But his condition worsened overnight and his heart stopped at one point, said Dr. Ernesto Torres, director of the Centro Medico trauma center in San Juan.

"He's battling minute to minute. This is the most important fight of his life," Torres told The Associated Press outside the hospital in the Puerto Rican capital.

The 50-year-old Camacho was shot as he and a friend sat in a Ford Mustang parked outside a bar. Police spokesman Alex Diaz said officers found nine small bags of cocaine in the friend's pocket, and a 10th bag open inside the car.

Torres said doctors were trying to determine the boxer's level of brain activity.

The specialists will then consult with other doctors and Camacho's mother, who flew in Wednesday from New York, to discuss whether he should be removed from life support, said Ismael Leandry, a longtime friend and former manager who was also at the hospital.

"We just have to wait to see if 'Macho' gets better. It's a hard battle," Leandry told AP.

Torres said Camacho's mother, Maria Matias, spent about 20 minutes with her son, one of the most dynamic boxing personalities of his era, and was expected to return for a second visit on Wednesday night.

"His mother came and she is devastated," he said. "She knows the prognosis is not at all favorable."

A godson, Widniel Adorno, said the family has discussed the possibility of organ donation but no final decision has been made.

Camacho's friend, identified as 49-year-old Adrian Mojica Moreno, was killed in the attack. Police said two assailants fled in an SUV but no arrests have been made and no motive has been disclosed.

Camacho was rushed to Centro Medico, where doctors initially said the bullet passed through his jaw and lodged in his shoulder. Torres said the bullet damaged three of the four main arteries in his neck and fractured two vertebrae, which could leave him paralyzed if he were to survive.

Steve Tannenbaum, who has also represented Camacho in the past, had been told earlier by friends at the hospital that the boxer would make it.

"This guy is a cat with nine lives. He's been through so much," he said. "If anybody can pull through it will be him."

Friends and family members waited anxiously at the hospital, fondly recalling Camacho's high-energy personality and his powerful skills in the ring.

"He was like a little brother who was always getting into trouble," said former featherweight champion Juan Laporte, a fellow Puerto Rican who grew up and trained with Camacho in New York.

Camacho has been considered one of the more controversial figures in boxing, but also popular among fans and those who worked in the sport.

"The Macho Man was a promoter's dream," renowned promoter Don King told AP. "He excited boxing fans around the world with his inimitable style. He was a nice, amiable guy away from the ring."

King had promoted Camacho but was caught off guard by news of the attack on the former champion. "What a tragedy this is," he said. "I'm very sorry for Hector and his family. My prayers go out to him."

The fighter's last title bout came against then-welterweight champion Oscar De La Hoya in 1997, a loss by unanimous decision. He last fought in May 2010, losing to Saul Duran. Tannenbaum said they were looking at a possible bout in 2013.

"We were talking comeback even though he is 50," he said. "I felt he was capable of it."

Camacho was born in Bayamon, one of the cities that make up the San Juan metropolitan area

He left Puerto Rico as a child and grew up mostly in New York's Harlem neighborhood, one of the reasons he later earned the nickname "the Harlem Heckler."

He went on to win super lightweight, lightweight and junior welterweight world titles in the 1980s.

Camacho has fought other high-profile bouts in his career against Felix Trinidad, Julio Cesar Chavez and Sugar Ray Leonard. Camacho knocked out Leonard in 1997, ending what was that former champ's final comeback attempt.

Camacho has a career record of 79-6-3.

In recent years, he has divided his time between Puerto Rico and Florida, appearing regularly on Spanish-language television as well as on a reality show called "Es Macho Time!" on YouTube. In San Juan, he had been living in the beach community of Isla Verde, where he would obligingly pose for photos with tourists who recognized him on the street, said former pro boxer Victor "Luvi" Callejas, a neighbor and friend.

"We all know what Macho Camacho has done, but in the last couple of months he hasn't been in any trouble," Callejas said as he kept vigil outside the hospital. "He has been taking it easy. He's been upbeat."

Drug, alcohol and other problems have trailed Camacho since the prime of his boxing career. He was sentenced in 2007 to seven years in prison for the burglary of a computer store in Mississippi. While arresting him on the burglary charge in January 2005, police also found the drug ecstasy.

A judge eventually suspended all but one year of the sentence and gave Camacho probation. He wound up serving two weeks in jail, though, after violating that probation.

His wife also filed domestic abuse complaints against him twice before their divorce several years ago.

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Associated Press writer David Skretta in Kansas City contributed to this report.

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US abortions fall 5 pct, biggest drop in a decade

NEW YORK (AP) — U.S. abortions fell 5 percent during the recession and its aftermath in the biggest one-year decrease in at least a decade, perhaps because women are more careful to use birth control when times are tough, researchers say.

The decline, detailed on Wednesday by the Centers for Disease Control and Prevention, came in 2009, the most recent year for which statistics are available. Both the number of abortions and the abortion rate dropped by the same percentage.

Some experts theorize that some women believed they couldn't afford to get pregnant.

"They stick to straight and narrow ... and they are more careful about birth control," said Elizabeth Ananat, a Duke University assistant professor of public policy and economics who has researched abortions.

While many states have aggressively restricted access to abortion, most of those laws were adopted in the past two years and are not believed to have played a role in the decline.

Abortions have been dropping slightly over much of the past decade. But before this latest report, they seemed to have pretty much leveled off.

Nearly all states report abortion numbers to the federal government, but it's voluntary. A few states — including California, which has the largest population and largest number of abortion providers — don't send in data. While experts estimate there are more than 1 million abortions nationwide each year, the CDC counted about 785,000 in 2009 because of incomplete reporting.

To come up with reliable year-to-year comparisons, the CDC used the numbers from 43 states and two cities — those that have been sending in data consistently for at least 10 years. The researchers found that abortions per 1,000 women of child-bearing age fell from about 16 in 2008 to roughly 15 in 2009. That translates to nearly 38,000 fewer abortions in one year.

Mississippi had the lowest abortion rate, at 4 per 1,000 women of child-bearing age. The state also had only a couple of abortion providers and has the nation's highest teen birth rate. New York, second to California in number of abortion providers, had the highest abortion rate, roughly eight times Mississippi's.

Nationally since 2000, the number of reported abortions has dropped overall by about 6 percent and the abortion rate has fallen 7 percent.

By all accounts, contraception is playing a role in lowering the numbers.

Some experts cite a government study released earlier this year suggesting that about 60 percent of teenage girls who have sex use the most effective kinds of contraception, including the pill and patch. That's up from the mid-1990s, when fewer than half were using the best kinds.

Experts also pointed to the growing use of IUDs, or intrauterine devices, T-shaped plastic sperm-killers that a doctor inserts into the uterus. A study released earlier this year by the Guttmacher Institute, a nonprofit organization that does research on reproductive health, showed that IUD use among sexually active women on birth control rose from less than 3 percent in 2002 to more than 8 percent in 2009.

IUDs essentially prevent "user error," said Rachel Jones, a Guttmacher researcher.

Ananat said another factor may be the growing use of the morning-after pill, a form of emergency contraception that has been increasingly easier to get. It came onto the market in 1999 and in 2006 was approved for non-prescription sale to women 18 and older. In 2009 that was lowered to 17.

Underlying all this may be the economy, which was in recession from December 2007 until June 2009. Even well afterward, polls showed most Americans remained worried about anemic hiring, a depressed housing market and other problems.

You might think a bad economy would lead to more abortions by women who are struggling. However, John Santelli, a Columbia University professor of population and family health, said: "The economy seems to be having a fundamental effect on pregnancies, not abortions."

More findings from the CDC:

— The majority of abortions are performed by the eighth week of pregnancy, when the fetus is about the size of a lima bean.

— White women had the lowest abortion rate, at about 8.5 per 1,000 women of child-bearing age; the rate for black women was about four times that. The rate for Hispanic women was about 19 per 1,000.

— About 85 percent of those who got abortions were unmarried.

— The CDC identified 12 abortion-related deaths in 2009.

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Tom Hanks, Will Ferrell offer custom recordings

NEW YORK (AP) — Imagine having William Shatner supply your outgoing voicemail message. Or maybe you'd prefer Morgan Freeman coolly telling callers to wait for the beep. Or perhaps having Betty White joke around is more your speed.

All it takes is $299 and some luck.

The advocacy group Autism Speaks is offering custom-recorded messages from those celebrities as well as Will Ferrell, Carrie Fisher, Tom Hanks, Derek Jeter, Leonard Nimoy, Patrick Stewart and Ed Asner.

From Dec. 3 to Dec. 9, a limited number of 20-second long MP3 messages will be recorded by each celebrity on a first-come, first-served basis for fans to do with as they wish. All requests must be of the PG variety.

Asner, the curmudgeonly Emmy Award winner of "The Mary Tyler Moore Show" and "Lou Grant," dreamed up the unusual fundraiser with his son Matt, who works for Autism Speaks.

"I think people will get a charge out of it," says Asner, who is currently on Broadway in the play "Grace." ''I'll probably say, 'What are you wearing?' Or, 'Take it off.' Something like that."

All proceeds will support autism research and advocacy efforts. An estimated 1 in 88 children in the U.S. is on the autism spectrum, a developmental disorder characterized by communication difficulties, social and behavioral challenges, as well as repetitive behaviors.

If he could get a message from one of the other stars participating, which would Asner want?

"I'm awfully stuck on Will Ferrell, having been subjected to him in 'Elf,'" Asner says. "But they're all such standouts — Patrick Stewart, Leonard Nimoy, Shatner. The list doesn't stop. Even Betty White," he adds about his "MTM" co-star. "She's still got some good left in her."

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Online: http://SoundOffForAutismSpeaks.com

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Judge rejects 9/11 suit against United

United Airline employees help passengers at the check-in counter in Terminal 1 at Chicago O'Hare International Airport. (Stacey Wescott, Chicago Tribune / November 15, 2012)

Reuters

9:48 a.m. CST, November 21, 2012

United Airlines bears no responsibility for suspected security lapses at a Maine airport that allowed hijackers onto the American Airlines plane that crashed into one of the World Trade Center towers on Sept. 11, 2001, a federal judge ruled.

U.S. District Judge Alvin Hellerstein on Wednesday granted a request by United and its parent United Continental Holdings Inc. to dismiss negligence claims brought by Larry Silverstein, the leaseholder of the World Trade Center property.

The decision concerned the destruction of 7 World Trade Center, the North Tower that collapsed hours after being pierced by debris stemming from the crash of AMR Corp.'s American Airlines Flight 11 into 1 World Trade Center.

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Prosecutors seek raw footage of Chief Keef at gun range

Cook County prosecutors trying to subpoena an online video showing South Side rapper Chief Keef firing a rifle at a gun range argued in court today that the uncut version of the footage is essential in determining whether the teen violated his probation.

The video was shot earlier this year when the 17-year-old rapper did an on-camera interview with Pitchfork Media, an Internet-based music publication, at a gun range in New York. In the video, Chief Keef, whose real name is Keith Cozart, is reportedly seen with a rifle.

Prosecutors have argued that the rapper violated the terms of his probation by holding that rifle following his conviction for pointing a gun at a Chicago cop last year.

Assistant State's Attorney Jullian Brevard today told Juvenile Court Judge Carl Anthony Walker that the full uncut version of the video, including portions that weren't made public by Pitchfork, is needed by prosecutors to ensure that it is in fact Chief Keef holding the rifle in the video.

"In today's media age, it could be spliced," Brevard said of the current video being shown online.

A lawyer for Pitchfork, Travis Life, objected, telling Walker that the release of the uncut video would violate Pitchfork's First Amendment protections.

"There are other means by which (prosecutors) can collect that information," Life said at the end of the 50-minute hearing. "Why not go through a witness that can provide the exact same information?"

Without making a ruling, Walker instead set the matter over until Dec. 5.

Chicago police have been looking into whether Chief Keef and his allies played a role in the Sept. 4 slaying of aspiring rapper Lil Jojo.

The slaying garnered national attention after Chief Keef sent a taunting tweet about the slain 18-year-old, whose real name was Joseph Coleman, hours after he was killed. Chief Keef, who recently signed a deal with Interscope Records, received mostly negative feedback from his more than 200,000 Twitter followers before he claimed his account had been hacked.

jgorner@tribune.com

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HP alleges Autonomy wrongdoing, takes $8.8 billion charge

(Reuters) - Hewlett-Packard stunned Wall Street by alleging a massive accounting scandal at its British software unit Autonomy that will cost the company the majority of $8.8 billion in charges.

It was the latest in a string of reversals that have renewed questions about the basic competence of the storied company's board and senior managers.

HP said on Tuesday it discovered "serious accounting improprieties" and "a willful effort by Autonomy to mislead shareholders," after a whistleblower came forward following the ouster of Autonomy's then-chief executive, Mike Lynch, in May.

The charge follows a nearly $11 billion writedown last quarter for the company's EDS services division.

The technology company has been roiled in the past few years by a revolving door of CEOs, overall management turnover and challenges in its core personal computer and printer businesses.

HP's stock slid to a 10-year low, dropping 12 percent to $11.71 in regular trading on Tuesday. Shares are down nearly 50 percent year to date.

Lynch "flatly rejected" HP's allegations and said he was "shocked" but confident he would be absolved of any wrongdoing.

He had not been notified by HP about the allegation before it was made public, nor had he been contacted by any authorities, Lynch said in an interview with Reuters.

HP took $8.8 billion in charges in the quarter, with $5 billion tied to the problems at Autonomy. The rest of the charge related to the "recent trading value of HP stock and headwinds against anticipated synergies and marketplace performance," HP said.

HP said it has referred the matter to the U.S. Securities and Exchange Commission's enforcement division and the UK's Serious Fraud Office for civil and criminal investigation. It said it would take legal action to recoup "what we can for our shareholders."

Both agencies declined to comment.

HP Chief Executive Meg Whitman, who voted for the deal while she was on HP's board, said the investigation of Autonomy's finances - both external and internal - will take multiple years as it makes it way through the courts in both countries.

"Most of the board was here and voted for this deal, and we feel terribly about that," said Whitman on a call with analysts. "The board relied on audited financials, audited by Deloitte. Not Brand X accounting firm, but Deloitte," she said, adding that KPMG was hired to audit Deloitte.

"Neither of them saw what we now see after someone came forward to point us in the right direction," Whitman said.

INFLATED SALES, REVENUE

HP alleged that Autonomy's former management inflated revenue and gross margins to mislead potential buyers. It said Autonomy executives mischaracterized revenue from low-end hardware sales as software sales and booked some licensing deals with partners as revenue, even though no customer bought products.

HP said Autonomy claimed its gross margins were in the 40 percent to 45 percent range while realistically they were in the 28 percent to 30 percent range.

Moreover, Autonomy always represented itself as a software firm but 10 percent to 15 percent of its revenue came from money-losing sales of low-end hardware, HP said.

The company also claimed that Autonomy was booking licensing revenue upfront before deals closed.

HP has embarked on an internal investigation, including a forensic review by PricewaterhouseCoopers of Autonomy's historical financial results, under HP General Counsel John Schultz after the whistleblower came forward in May.

Schultz said since the accounting troubles occurred prior to the acquisition of Autonomy, it took a long time before HP was in a position to make the news public.

"Not surprisingly, Autonomy did not have sitting on a shelf somewhere a set of well-maintained books that would walk you through what was actually happening from a financial perspective inside the company," he said. "Indeed critical documents were missing from the obvious places, and it required that we look in every nook and cranny."

Whitman said her predecessor, Leo Apotheker and the former chief strategy officer, Shane Robison, were the key people behind the Autonomy acquisition.

Apotheker bought Autonomy to diversify HP's business and beef up its portfolio to provide one-stop shopping for corporations. The $11 billion acquisition of Autonomy - heavily criticized by investors as too costly - was a key part of the plan to transform HP.

Apotheker was ousted as CEO in September 2011 after just 11 months on the job and Robison left soon after.

In a statement, Apotheker said he was "stunned and disappointed" by the revelations and offered to make himself available to HP and the authorities to get to the bottom of the matter.

Whitman on Tuesday stood by Autonomy's technology and products despite the allegations, saying it will be the growth engine for HP. The former California gubernatorial candidate has been trying to move beyond some of HP's past controversies, which includes the ouster of the past two CEOs, a haphazard product strategy and a plan to sell its PC unit that was later dropped.

HP has been running Autonomy since the acquisition closed in October 2011, but it didn't find the accounting problems on its own. The company investigated only after a senior Autonomy executive came forward to detail the financial metrics surrounding Autonomy.

Advisers working on behalf of Autonomy included Qatalyst Partners, the investment bank run by technology investment banker Frank Quattrone; UBS; Goldman Sachs; Citigroup; JPMorgan Chase, and Bank of America. Perella Weinberg Partners and Barclays Capital advised for HP.

Law firms for Autonomy were Slaughter & May and Morgan Lewis. The firms for HP included Gibson, Dunn & Crutcher; Freshfields Bruckhaus Deringer; Drinker Biddle & Reath; and Skadden, Arps, Slate, Meagher & Flom.

Robert Enderle, a tech analyst at the Enderle Group, said he has never seen such a potential misrepresentation of financials.

"You have to rely on what the firm gives you during due diligence and I've never seen a misstatement at this level," Enderle said.

If the charges are true, it could result in a massive punitive damages award for HP, Enderle said.

Other analysts hoped it was the end of the bad news for HP.

"This kind of feels like the last of the bad news," Forrester analyst Frank Gillett said.

FOURTH-QUARTER LOSS

The Autonomy allegations and announcement of the charge coincided with the reporting of a fiscal fourth-quarter loss for HP.

HP said net revenue fell 6.7 percent to $29.96 billion for the quarter, ended October 31, from $32.12 billion a year earlier. Analysts, on average, expected $30.43 billion, according to Thomson Reuters I/B/E/S.

Revenue from all of its main business units declined, with the personal computer division recording the steepest drop, at 14 percent while revenue from printing fell 5 percent.

HP reported a quarterly net loss of $6.85 billion, or $3.49 a share, versus a profit of $239 million, or 12 cents, a year earlier.

The sprawling company, which employs more than 300,000 people globally, is undergoing a restructuring aimed at focusing on enterprise services in the mold of International Business Machines Corp.

"To put it bluntly ... this story has been an unmitigated train wreck, and it seems every time management speaks to the Street, there is new negative incremental information forthcoming," said ISI Group analyst Brian Marshall.

(Reporting by Poornima Gupta in San Francisco, Nicola Leske in New York and Supantha Mukherjee in Bangalore; Additional reporting by Paul Sandle; Editing by Peter Lauria, Saumyadeb Chakrabarty, Jeffrey Benkoe and Steve Orlofsky)

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Rutgers joins the Big Ten, leaving Big East behind

PISCATAWAY, N.J. (AP) — As the Big East was being picked apart, Rutgers was looking for a way out and a new place to show off a football program that has been resurrected in the past decade.

Not only did Rutgers find that escape hatch, the Scarlet Knights ended up in one of the most desirable neighborhoods in college sports.

Rutgers joined the Big Ten on Tuesday, leaving the Big East behind and cashing in on the school's investment in a football team that only 10 years ago seemed incapable of competing at the highest level.

The move follows Maryland's announcement a day earlier that it was heading to the Big Ten in 2014. The additions give the Big Ten 14 schools and a presence in lucrative East Coast markets.

Rutgers announced its decision Tuesday at a campus news conference attended by Big Ten Commissioner Jim Delany, Rutgers President Robert Barchi and athletic director Tim Pernetti.

"The Big Ten is really where Rutgers belongs," Barchi said. "This is not just a good fit for us athletically, it's a good fit for us academically and as an institution."

Rutgers has been competing in the Big East since 1991. But the league has been torn up by conference realignment, losing three key members last year.

Pernetti had insisted all along that Rutgers would land on its feet, that being a member of the prestigious American Association of Universities and residing in the largest media market in the country would ensure the school wouldn't be cast aside as the landscape of college sports changed.

The Scarlet Knights landed in the best possible spot. A spot that seemed unthinkable a decade ago when Rutgers football was a Big East cellar-dweller.

"It's a transformative day for Rutgers University, and transformative in so many ways," Pernetti said. "This is about collaboration at every level, the perspective the Big Ten institutions have, the balance between academics and athletics, proving over decades and decades that athletics at the highest level and academics at the highest level can coexist. It's the perfect place for Rutgers."

Rutgers left its entry date ambiguous, though clearly the Big Ten and the school would like it to line up with Maryland.

The Big East requires 27 months' notification for departing members. The Scarlet Knights will have to negotiate a deal with the Big East to leave early, the way Pittsburgh, Syracuse and West Virginia have done.

"Although we are disappointed that Rutgers has decided to leave the Big East Conference, we wish them well," Big East Commissioner Mike Aresco said in a statement. "They have been a valued member of the Conference for many years."

The Big East is trying to rebuild itself as a 12-team football conference next season, with the addition of Boise State and five other schools. Now the conference is again on the defensive. Connecticut or Louisville could be next to go with the ACC looking for a replacement for Maryland.

"We remain committed to, and confident in, the continued growth and vitality of the Big East Conference," Aresco said.

Whenever Rutgers enters the Big Ten, it will be the culmination of one of the most remarkable turnarounds in college sports.

In 2002, the Scarlet Knights football team went 1-11 under second-year coach Greg Schiano.

The team, however, steadily improved as the university made the huge financial commitment necessary to support major college football.

Facilities were upgraded, the on-campus stadium was expanded and as Schiano started to win, his salary began to rise into the millions. Not everyone on campus embraced the idea of turning Rutgers into a big-time football school, and it did come with a price.

The expanded and renovated stadium cost of $102 million. The school had hoped to raise the money through private donors, but fell short. Rutgers scaled back plans for the expansion and issued bonds and borrowed money to complete the project.

In 2006, the school had to cut six varsity sports. As the football team has become a consistent winner — Rutgers has gone to a bowl six of the last seven years — the athletic department has received tens of millions in subsidies from the university.

Schiano left for the NFL last year, and Rutgers hired longtime assistant Kyle Flood, who has the Scarlet Knights poised to take make another big step. No. 21 Rutgers (9-1) is in position to win its first Big East championship and go to a BCS game for the first time.

In the Big Ten, the revenue Rutgers receives from the league's television and media deals should triple in the short term and could be even more than that in years to come.

The Big Ten reportedly paid its members about $24 million last year, though new members generally do not get a full share of revenue immediately. The Big East's payout to football members last year was $6 million.

In exchange, the Big Ten gets a member in the largest media market in the country, with Rutgers and Maryland as north and south bookends.

"You know, it was a factor," Delany said, referring to the New York television market. "I think it's been a factor that's been a little overplayed to be honest with you."

Losing access to that market is yet another blow to the Big East. The conference is again facing an uncertain future and at the worst possible time. The Big East is trying to negotiate a crucial new television contract.

With the Big East on shaky ground, there has been speculation that Boise State and San Diego State could renege on their commitments to the Big East and stay in the Mountain West.

San Diego State AD Jim Sterk told the North County Times that the Aztecs are not looking to bail.

"It's not great to lose UConn or Rutgers, but if that happens, it gives us an opportunity to have less travel in the Western division," Sterk told the newspaper. "We pick up someone further west, and we're in better shape than yesterday's Big East."

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Follow Ralph D. Russo at www.Twitter.com/ralphdrussoap

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“Secret Disco Revolution” Gets U.S. Release

LOS ANGELES (TheWrap.com) – Screen Media Films has acquired U.S. theatrical rights to the documentary “Secret Disco Revolution,” featuring interviews with many 70′s music icons, including Gloria Gaynor, The Village People, and Kool and the Gang.

ScreenMedia plans a June 2013 U.S. theatrical run of the documentary, the company announced Monday.

Written, directed, and produced by Kastner, the film looks into the disco movement and many of its key figures.

“For anyone that grew up with disco this film will transport you back in time while filling in the blanks to what you didn’t even realize was happening around you,” said Suzanne Blech, president of Screen Media Films.

“If you weren’t around at the time to get caught up in the disco craze, the music and the moves will make you want to get up and dance,” Blech said.

Entertainment One Films International (eOne) has also sold the film to a number of other territories, including Japan (Kadokawa), Italy (Sky Arts) and Germany, Austria, Switzerland and France, all through ZDF Arte.

The Screen Media deal was negotiated by Blech and Charlotte Mickie from eOne, along with Andrew Herwitz from The Film Sales Company, on behalf of the filmmakers.

Music News Headlines – Yahoo! News

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