Former Goldman Director Charged With Insider Trading

The Securities and Exchange Commission on Tuesday accused the former head of consulting giant McKinsey & Company of leaking confidential information to Raj Rajaratnam, the Galleon Group founder now awaiting trial on securities fraud and conspiracy charges.

The commission says that the former McKinsey executive, Rajat Gupta, passed along information he gleaned while serving on the boards of Goldman Sachs and Procter & Gamble. Among the tips that Mr. Gupta is alleged to have provided, was word that Warren E. Buffett would invest $5 billion in Goldman Sachs in September 2008 as the financial crisis raged. That information, the S.E.C. says, generated “illicit profits and loss avoidance of more than $17 million” for various Galleon funds. Mr. Gupta is also accused of disclosing to Mr. Rajaratnam information about Procter & Gamble’s 2008 fourth-quarter results on the eve of their release. The trial of Mr. Rajaratnam is scheduled to start in federal district court in Manhattan on March 8.

Gary Naftalis, a lawyer for Mr. Gupta, said that the S.E.C. allegations were “totally baseless.”

“Mr. Gupta has done nothing wrong,” he said.

“There is no allegation that Mr. Gupta traded in any of
these securities or shared in any profits as part of any quid pro quo.” Mr. Gupta, he noted, had lost his entire $10 million investment in a fund managed by Mr. Rajratnam during the period of the S.E.C. allegations. Mr. Gupta, 62, served on Goldman’s board from November 2006 through May 2010 and has been on P.&G.’s board since 2007. “Directors who violate the sanctity of board room confidences for private gain will be held to account for their illegal actions,” said Robert Khuzami, director of the S.E.C. division of enforcement.

The S.E.C.’s allegations were outlined in an order that institutes administrative and cease-and-desist proceedings against Mr. Gupta. The order provides some detail on what Goldman’s board was told in the chaotic wake of the collapse of Lehman Brothers. At a special meeting on Sunday, Sept. 21, 2008, the board was updated on the strategic alternatives the firm was considering and the strong net revenue Goldman was seeing even with financial markets in turmoil.

The S.E.C. says that the next morning Mr. Gupta and Mr. Rajaratnam “very likely had a telephone conversation,” noting that the Galleon Tech funds bought 80,000 shares of Goldman that day. The following Tuesday afternoon, the board held a conference call to approve Mr. Buffett’s $5 billion preferred stock investment in Goldman.

“Immediately after disconnecting from the board call, Gupta called Rajaratnam from the same line, ” the S.E.C. order says. A minute later, Galleon Tech funds bought more than more than 175,000 additional shares of Goldman just before the market closed, the agency says. After the close, Goldman announced the investment and its shares rallied the next day. The Galleon funds netted a profit of more than $900,000 on the Goldman shares, the S.E.C. contends. Mr. Gupta headed McKinsey from 1994 to 2003 and left as a partner in 2007. A former colleague at McKinsey, Anil Kumar, pleaded guilty to fraud charges related to the Galleon cased.

Mr. Kumar admitted receiving $1.75 million in payments from Mr. Rajaratnam after providing information from 2004 to 2009.

Caption Cameron Diaz's Tight Squeeze

  

Calling all couture cops—it's YOU Write 'Em Up time!

The Perp: Cameron Diaz in a Michael Kors dress and Jimmy Choo peep-toes, at the Vanity Fair Oscars afterparty

The bubbly star has some of the sexiest stems in the Biz, but this too-short, too tight minidress ain't the classiest way to show 'em off. Cammy, next time just go up a size—no one will ever know and it will look so much nicer.

What do you think of Cameron's leopard-print mini? Write a clever caption about her getup below and we'll post our favorite here and on our Facebook page.

Christina Aguilera, Boyfriend Busted for Boozing!

 

This is certainly one, if not the most positive, way to promote today's DVD release of Burlesque.

Christina Aguilera was arrested at 2:45 this morning and booked at the West Hollywood police station for public intoxication.

The singer's boyfriend, Matthew Rutler, was also arrested at the same time and place for driving under the influence. Both are misdemeanors.
Rutler was behind the wheel when Los Angeles Sheriff's deputies pulled them over. Authorities deemed Aguilera "extremely intoxicated" and too sloppy to drive home so she and Rutler were hauled into the West Hollywood station to dry out, according to department spokesman Steve Whitmore.

Whitmore said neither was belligerent in any way and prosecutors will not push charges against the 30-year-old Aguilera, whose vital signs were conveniently listed s 5-foot-2, 100 pounds, blonde/blue, by the Sheriff's website.

Aguilera was allowed to leave around 7:30, escaping through a back door to avoid paparazzi, Whitmore said. Sadly, because Aguilera will not be prosecuted, her arrest was not commemorated with a mug shot.

However, Rutler, 25, remains behind bars on $5,000 bail. No comment yet from the singer's reps.

Pregnant Holly Willoughby recovering after hospital scare

Pregnant Holly Willoughby missed Dancing On Ice on Sunday because she had a thumping head.

The TV favourite has also been absent from the This Morning TV studios this week, but worried fans will be glad to know she's on the mend. Holly, 30 - whose baby girl is due in May - called her This Morning co-host Phillip Schofield from home during the show today to say hello.

'I feel much better today thank you,' she told him. 'To be honest I'm not sure [what was wrong] I just felt really unwell on Saturday. 'I went to the hospital to have some checks done and I'd managed to make myself quite anaemic I think... 'And I think the headaches were because of that. 'They gave me things to take which have eased the pain a bit but also made me quite sleepy. 'It was just one of those things really and another thing that comes with being pregnant. 'I think I'll definitely be in tomorrow. 'I've had lots of messages too - so thank you to everybody.

'I'm better now so thank you very much.' Coleen Nolan stood in for Holly on Dancing On Ice this week and Ruth Langsford has been taking her place on This Morning. 'So! @hollywills is suffering from migraines and has been advised by her doctor to rest,' Phillip, 48, Tweeted on Sunday.

Clothes Makers Join to Set ‘Green Score’

	Danish Siddiqui/Reuters

But American shoppers in a typical department store encounter no obvious connection between those polluting plumes of dye — or really any other environmental impact — and their favorite pair of designer blues. In many cases, the company whose name appears on the label is only marginally better informed.

But a new and prominent assemblage of retailers, clothing manufacturers, environmental groups and academics plans to change that.

Calling itself the Sustainable Apparel Coalition, the group intends to announce Tuesday that it is developing a comprehensive database of the environmental impact of every manufacturer, component and process in apparel production, with the aim of using that information to eventually give every garment a sustainability score.

Later, the coalition hopes to produce a label that would share some version of that score with shoppers, giving them a much more detailed view into the supply of fabrics, zippers, dyes, threads, buttons and grommets that come together to form the clothing they buy, as well as what impact the creation of that clothing has on both people and the planet.

The coalition includes middle-market companies like Wal-Mart, J. C. Penney, H&M and Hanes, along with more traditionally environmentally minded manufacturers of rugged outdoor clothing like Patagonia and Timberland. The 30 founding members also include Duke University, the nonprofit Environmental Defense Fund, the labor rights group Verité, and the Environmental Protection Agency.

Americans spent roughly $340 billion on clothing and shoes last year, which is about 25 percent of the global market, and virtually all of it — 99 percent for footwear and 98 percent for clothes — came from somewhere else, according to the American Apparel and Footwear Association. And the various pieces and parts of any single garment — a jacket, say, or pair of pants — often come from such a diverse multinational chain of fabric mills, dye operations and assembly plants that quantifying the environmental impact of a single item is nearly impossible.

Initially, the coalition wants to help individual companies clean up their supply chains. Company members have all agreed to chip in some money to begin the effort, with the larger companies being asked for additional “seed funding” to support the development of a sustainability indexing tool. Rick Ridgeway, who heads sustainability efforts for Patagonia and is the chairman of the new coalition, estimated that the group would spend $2 million by the end of 2011 on developing the tool.

“People are at such different points on the sustainability journey, and working together can accelerate our ability to make change,” said Alex Tomey, a vice president for product development and design at Wal-Mart, which has worked closely with Patagonia to get the coalition off the ground.

The obscure nature of the global supply chain for apparel has long been a concern to many environmental groups, including Greenpeace, which reported on the Xintang textile mills in December. While individual manufacturers and smaller segments of the apparel industry have begun trying to quantify their effects, a robust study of the entire life cycle of the apparel and footwear industries is only now getting under way.

“The apparel supply chain is long and quite complicated, and many of our current apparel companies — brand companies — don’t really own all the production facilities and factories,” said Huantian Cao, an associate professor of fashion and apparel studies at the University of Delaware. “So even for a company that has a label or brand on the product, it might not be easy to study the whole life cycle of that product, because so much of that supply chain is out of their control.”

The coalition’s tool is meant to be a database of scores assigned to all the players in the life cycle of a garment — cotton growers, synthetic fabric makers, dye suppliers, textile mill owners, as well as packagers, shippers, retailers and consumers — based on a variety of social and environmental measures like water and land use, energy efficiency, waste production, chemical use, greenhouse gases and labor practices.

A clothing company designer could then use the tool to select materials and suppliers, computing an overall sustainability score based on industry standards. If the score exceeds the company’s own sustainability goals — or if competitive pressures arising from a consumer label are compelling the company to bring scores down — designers could revise their choices with the tool.

Such a tool is a work in progress. It draws heavily from two earlier efforts — an environmental design tool developed by Nike, and an “Eco Index” begun by the Outdoor Industry Association last year. But these afford only a partial or approximate look at the potential effects of discrete industry segments.

In order to bring broader life-cycle data to the effort, the coalition is also working with the Sustainability Consortium, which is developing sustainability measurement and reporting standards across many product categories.

The new coalition is still debating how to formalize its structure, and because it plans to focus, at least in the short term, on the supply chain tool, consumers might not see a sustainability label in stores for some time. “The coalition members see the need and value of a consumer-facing rating for products,” the group states on its Web site. “However, they appreciate the complexity involved in arriving at a single numeric score.”

But Jeffrey Swartz, the chief executive of Timberland, says he is optimistic that a label is only a matter of time.

“This is really filling a void,” Mr. Swartz said. “The government has standards for miles per gallon on a car, but we have no real standards for clothing. This will ultimately put the power in the hands of the consumers, because the apparel industry is saying out loud, ‘We’re going to find a way to disclose to you what’s behind this purchase decision — beyond color, size and fit.’ ”
With just a few clicks on Google Maps, anyone can call up a satellite image of blue dye and other chemicals washing downriver from textile mills in Xintang, China — the world capital of blue jeans production.

John Galliano sacked by fashion house Dior

Galliano joined the Dior label in 1996 British fashion designer John Galliano has been sacked by fashion house Dior following alleged anti-Semitic comments he made last week.

Dior said it had decided to fire him after seeing a video clip allegedly showing Galliano telling two women in a Paris cafe: "I love Hitler."
"I very firmly condemn what was said by John Galliano," said Dior's chief executive Sidney Toledano.
A lawyer for the 50-year-old designer said he denied the allegations.
Toledano said Galliano's alleged comments "totally contradict the values which have always been defended by Christian Dior."
Earlier on Tuesday, Oscar-winning actress Natalie Portman said she was "disgusted" at fashion designer John Galliano's alleged anti-Semitic remarks in a video.
"I am deeply shocked and disgusted by the video of John Galliano's comments that surfaced today," said Portman, who won the best actress Oscar on Sunday.
It followed the footage posted online allegedly showing Galliano telling a Paris cafe patron: "People like you would be dead today - your mothers, your forefathers would be gassed."

Portman and Galliano both work for the Dior fashion house

Galliano and Portman have both worked for fashion label Dior.
Portman is the face of Miss Dior Cherie perfume and has often been seen wearing Dior at red carpet events.
But at the Academy Awards on Sunday, she chose to wear a dress designed by Black Swan design label, Rodarte. 
"In light of this video, and as an individual who is proud to be Jewish, I will not be associated with Mr Galliano in any way," Portman said in her statement.
"I hope at the very least, these terrible comments remind us to reflect and act upon combating these still-existing prejudices that are the opposite of all that is beautiful," she added.

Watch: Sasha Wilkins: "A house as large as Dior needs a name, a really big fashion name"

Police briefly detained the designer on Thursday night after a couple accused him of making anti-Semitic remarks. He also allegedly traded slaps with them.
Galliano's dismissal comes on the first day of Paris fashion week - his Dior show is due to run on Friday although it is not yet clear if it will now go ahead.
UK Vogue editor Alexandra Shulman said on the fashion magazine's website: "I think Galliano made a terrible mistake and such offensive behaviour could not be ignored.
"It is all the same true that he has a huge talent and has contributed enormously to the resurrection of the house of Dior. Who can predict what the future will bring?"

Google 'finds' missing G-mails on tape

  Google now says just 0.02% of Gmail users were affected by the problem. Google has apologised to customers who found their Gmail inboxes empty after accounts were accidentally wiped clean.

It said that the e-mails were "never lost" and that "things should be back to normal for everyone soon".
Many of the missing e-mails are backed up on tape, hence the delay in restoring them, the search giant said.
It blamed a software bug for the incident and said just 0.02% of Gmail customers were affected.

Initially it had said that less than 0.08% of its 170 million users had been affected.

"I know what some of you are thinking: how could this happen if we have multiple copies of your data, in multiple data centres?" asked Ben Treynor, Google's site reliability czar, in the firm's official Gmail blog.

"Well, in some rare instances software bugs can affect several copies of the data. That's what happened here," he added.

He said that Google backs up data on offline tapes, which are protected from software bugs.
"But restoring data from them takes longer than transferring your requests to another data centre, which is why it's taken us hours to get the e-mail back instead of milliseconds," he said.
"Thanks for bearing with us as we fix this, and sorry again for the scare," he signed off.

Pearson says Libyan shares frozen by UK authorities

The US government of frozen $30bn of Libyan assets, including those of the Gaddafi family Publishing giant Pearson has said that it considers the 3.3% stake in the company held by Libya's sovereign wealth fund as "effectively frozen".

The UK Treasury has frozen the assets of Libyan leader Muammar Gaddafi, but has not said if the Libyan Investment Authority's (LIA) assets are included.
In contrast, the US government has frozen $30bn (£18bn) of Gaddafi family, LIA and central bank assets.
The European Union has frozen assets of Col Gaddafi and five family members.
It has also banned the supply of arms, ammunition and any equipment that could be used for "internal repression".
Austria has also confirmed it has frozen assets belonging to the Gaddafi family. The country's central bank said about 1.2bn euros ($1.7bn; £850m) of Libyan assets were currently held in Austrian accounts.
Germany said it had blocked an account holding 2m euros held by one of Colonel Gaddafi's sons.
The UK Treasury has not confirmed the value of the Gaddafi family assets that it has frozen, but reports suggest a figure of £1bn.

Until very recently, it was very clear who was in charge of the [LIA's] money”

End Quote Pepe Egger Exclusive Analysis

The UK has also stopped the export of about £900m worth of new Libyan dinars ordered by state authorities.

'Uncomfortable' Pearson announced last summer that the LIA had taken a significant stake in the publisher, which owns the Financial Times and Penguin.
It said it had "reasonable cause" to believe the fund had since added to its holding.
Pearson chief executive Marjorie Scardino said she was "uncomfortable" with the LIA's shareholding.
The fund holds stakes in a number of other institutions, including Italy's Unicredit bank and industrial group Finmeccanica, as well as Canadian oil exploration group Verenex.
Reports also suggest it holds shares in Russian aluminium giant Rusal.
The fund, established in 2006, holds $70bn of assets and is the 13th largest sovereign wealth fund in the world, according to the Sovereign Wealth Fund Institute.
The fund, built on Libya's oil wealth, scores two out of 10 on the institute's transparency ranking.
'Paralyse' Governments across the world are deciding whether the assets of the LIA should be considered assets of the Gaddafi family and should be frozen, said Pepe Egger, head of western Europe forecasting at Exclusive Analysis.
If instead they are considered assets of the Libyan people, governments may feel they should not be frozen, Mr Egger told BBC News.
The question is particularly difficult in Italy, he said, given the extent of not just the LIA's investments in the country, but also those of the country's central bank.
"For example, the governor of the Libyan Central Bank is on the board of Unicredit."
If the fund's assets are frozen, then "it's shareholding rights will be put on hold. This could paralyse big companies," Mr Egger explained.
Together, both the LIA and central bank own more than 7% of Unicredit, one of Italy's biggest banks.
Such large shareholdings could be clouding what would otherwise be a fairly straightforward issue, he suggested.
"Until very recently, it was very clear who was in charge of the [LIA's] money," said Mr Egger.
"Libya was Gaddafi and Gaddafi was Libya."

Former Apple employee guilty of conspiring against firm

  Parts for products like the iPad and iPhone come from suppliers in South Korea, Taiwan and China 

A former employee of computer and phone firm Apple has pleaded guilty to multiple criminal charges and admitted he took bribes from Asian suppliers. colectores en republica dominicana

Paul Devine is accused of providing confidential information to suppliers so that they could negotiate favourable contracts.
Mr Devine admitted that the loss to Apple from his actions was more than $2m (£1.2m).
An Apple spokesperson declined to comment on the guilty plea.
Making amends? Mr Devine worked as a global supply manager for the maker of the popular iPhone from 2005 to 2010.
He was arrested in August after Apple found incriminating emails in which he agreed to be paid for providing inside information.
Mr Devine pleaded guilty in a San Jose federal court on Monday to wire fraud, conspiracy and money laundering.
He also agreed to give up $2.28m in money and property, the US attorney's office announced.
Mr Devine's lawyer said he was a "good man who made a mistake, and now he's trying to make amends".