Calpers, others sue Pfizer as “opt outs” to class action

NEW YORK (Reuters) – A dozen large investors have sued Pfizer Inc for securities fraud, distancing themselves from a long-running shareholder class action over allegations the company misled them about the safety of the pain relievers Celebrex and Bextra.

The plaintiffs in the new case, filed late Thursday in U.S. District Court in Manhattan, include the California Public Employees‘ Retirement System (Calpers), the biggest U.S. public pension fund, the California State Teachers’ Retirement System (Calstrs), and several mutual funds.

“Opting out” of securities class actions has become a growing trend, as some plaintiffs gamble they can do better by suing solo or in a small group instead of joining a larger case.

The plaintiffs in the new case said in September that they would not be part of the pending class action. The class action, led by the Teachers’ Retirement System of Louisiana, grew out of lawsuits that started in 2004 following a study on the cardiovascular risks of Celebrex and Bextra.

Pfizer said it will fight the new case, as well as another opt-out case and the larger class action.

“The company believes these cases and the original class action lawsuit have no merit based on the undisputed facts in the record and the governing federal securities law,” said Pfizer spokesman Chris Loder.

He said both drugs “were rigorously studied and tested” by the company and independent experts, and that the U.S. government, doctors, patients, and investors received accurate information on the risks and benefits of the medications.

Revenues from Celebrex and Bextra dropped by over $ 2 billion in the first nine months of 2005 after the safety concerns were made public, while Pfizer saw a $ 68.4 billion loss in stock market value between October 2004 and October 2005, according to allegations by investors.

In September 2009, Pfizer agreed to pay $ 2.3 billion to settle a U.S. Department of Justice probe into the marketing of drugs including Bextra.

Plaintiffs have opted out of past securities fraud class actions, including cases involving Countrywide Financial Corp and stemming from the collapse of WorldCom.

“Opt-outs are a major trend, probably reflecting the increased competition within the plaintiff’s bar,” said John Coffee, a law professor and securities law expert at Columbia University Law School. He said large institutional investors “can settle for more in cases in which they are not submerged in a huge class with smaller investors.”

Other public pension funds in Thursday’s lawsuit include the Teacher Retirement System of Texas, the Montana Board of Investments and the Arizona State Retirement System. Thrivent Financial for Lutherans and American Century Investment Management are also among the plaintiffs.

The complaint seeks compensatory and punitive damages, as well as interest and attorneys fees.

The plaintiffs are represented by Bernstein Litowitz Berger & Grossmann, a New York law firm that often leads class actions.

Other investors also have opted out of the Pfizer class action. Wolf Opportunity Fund Ltd and Okumus Capital LLC sued Pfizer on Wednesday, making similar allegations of fraud.

Matthew Siben, a lawyer for Wolf and Okumus with law firm Dietrich Siben Thorpe, did not respond to a request for comment Thursday.

Jay Eisenhofer, a lawyer for the lead plaintiff in the class action, declined to comment on the new cases.

The case is Montana Board of Investments, et al. v. Pfizer Inc., et al., U.S. District Court, Southern District of New York, No. 12-cv-9379 .

(Reporting By Nate Raymond; Editing by Martha Graybow and Tim Dobbyn)

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Petraeus says al Qaeda role known early

WASHINGTON (Reuters) - Former CIA Director David Petraeus told Congress on Friday that he and the spy agency had sought to make clear from the outset that September's deadly attack on the U.S. diplomatic mission in Benghazi, Libya, involved an al Qaeda affiliate, lawmakers said.

Petraeus told the House of Representatives intelligence committee that "there were extremists in the group" that launched the initial attack on the diplomatic mission, describing them as affiliates of al Qaeda and other extremist groups, said Representative C.A. Dutch Ruppersberger, the committee's top Democrat. "The fact is that he clarified it."

Another lawmaker, Republican Representative Peter King, said Petraeus' account in the closed-door session differed from the assessment that the CIA chief gave to Congress two months ago, just days after the September 11 attack that killed U.S. Ambassador Christopher Stevens and three other Americans.

"He also stated that he thought all along he made it clear that there were significant terrorist involvement, and that is not my recollection of what he told us on September 14," King said.

Petraeus later appeared before the Senate intelligence panel. His appearances before lawmakers came the week after he quit as CIA chief because of an extramarital affair with his biographer, Paula Broadwell. Lawmakers said a somber Petraeus told them his resignation had nothing to do with issues related to Benghazi or any reluctance to testify before Congress.

"The general did not address any specifics of the affair, of that issue," Democratic Representative Jim Langevin said. "What he did say in his opening statement was that he regrets the circumstances that led to his resignation."

Petraeus, a retired Army four-star general, slipped into the closed sessions unseen by a swarm of media.

The assault on the U.S. mission in Benghazi has turned into a flash point between President Barack Obama and Republicans, who accuse the White House of misleading the public in the days following the attack.

Some Republicans have suggested that Obama and his aides wanted to downplay the idea they had failed to prevent a terrorist attack, which might have dampened the president's re-election chances on November 6. Obama has denied that implication.

Petraeus' testimony to the House and Senate intelligence committees seems unlikely to dampen the controversy over why the Obama administration had asserted for days after the Benghazi attack that it had sprung from a spontaneous protest prompted by an anti-Muslim film.

Republicans have targeted Obama's U.N. ambassador, Susan Rice, who in five Sunday talk show appearances on September 16 said the assault was prompted by the video and then morphed into a more violent act. But she told CBS's "Face the Nation" that day that it was "clear that there were extremist elements that joined in and escalated the violence."

Rice aides and White House officials have said that she had based her remarks on talking points provided by the CIA.

'A FRIEND'

Lawmakers appeared to treat the question of his personal life with kid gloves. They said the questioning was sometimes awkward against the backdrop of the Broadwell scandal and because some of them have known Petraeus for years and think highly of his military service in which he ran the wars in Afghanistan and Iraq.

"I consider him a friend, which made the questioning tough, to be honest with you," King told reporters.

"I've known him for nine years now. I actually asked him to run for president a few years ago," he said.

The affair has raised questions about whether any classified information was divulged to Broadwell that would affect national security. So far, FBI investigators have not discovered anything to suggest that was the case, law enforcement sources said.

Before his resignation, Petraeus had gone to Libya to interview people about what happened in Benghazi on September 11, when there was a series of escalating attacks on the diplomatic mission and a nearby CIA annex.

Ruppersberger said the committee learned on Thursday during a closed hearing in which it saw a real-time film of the events in Benghazi that the attack on the diplomatic mission was different than the subsequent attack on the nearby annex.

"The first incident was a lot different than the second incident in the annex," he said. The attack on the mission involved looters and people setting buildings on fire, while the attack on the annex was "well-organized" and involved people who had experience in conducting attacks, he said.

(Additional reporting by Patricia Zengerle; Editing by Will Dunham)

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Jamaica to abolish slavery-era flogging law

KINGSTON, Jamaica (AP) — Jamaica is preparing to abolish a slavery-era law allowing flogging and whipping as means of punishing prisoners, the Caribbean country’s justice ministry said Thursday.

The ministry said the punishment hasn’t been ordered by a court since 2004 but the statutes remain in the island’s penal code. It was administered with strokes from a tamarind-tree switch or a cat o’nine tails, a whip made of nine, knotted cords.

Justice Minister Mark Golding says the “degrading” punishment is an anachronism which violates Jamaica’s international obligations and is preventing Prime Minister Portia Simpson Miller‘s government from ratifying the U.N. convention against torture.

“The time has come to regularize this situation by getting these colonial-era laws off our books once and for all,” Golding said in a Thursday statement.

The Cabinet has already approved repealing the flogging law and amendments to other laws in the former British colony, where plantation slavery was particularly brutal.

The announcement was welcomed by human rights activists who view the flogging law as a barbaric throwback in a nation populated mostly by the descendants of slaves.

“We don’t really see that (the flogging law) has any part in the approach of dealing with crime in a modern democracy,” said group spokeswoman Susan Goffe.

But there are no shortage of crime-weary Jamaicans who feel that authorities should not drop the old statutes but instead enforce them, arguing that thieves who steal livestock or violent criminals who harm innocent people should receive a whipping to teach them a lesson.

“The worst criminals need strong punishing or else they’ll do crimes over and over,” said Chris Drummond, a Kingston man with three school-age children. “Getting locked up is not always enough.”

The last to suffer the punishment in Jamaica was Errol Pryce, who was sentenced to four years in prison and six lashes in 1994 for stabbing his mother-in-law.

Pryce was flogged the day before being released from prison in 1997 and later complained to the U.N. Human Rights Committee, which ruled in 2004 that the form of corporal punishment was cruel, inhuman and degrading and violated his rights. Jamaican courts then stopped ordering whipping or flogging.

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Film defrocks church hierarchy over handling of sex abuse

NEW YORK (Reuters) – Four deaf Wisconsin men were some of the first to seek justice after suffering childhood sexual abuse at the hands of a priest, and a new documentary about the Catholic Church‘s poor handling of such cases stemming from the Vatican seeks to make their voices heard.

“Mea Maxima Culpa: Silence in the House of God” explores the impact of the Roman Catholic Church’s protocol as dictated from the Vatican for dealing with pedophile priests. It opens in U.S. cinemas on November 16, and will air on cable channel HBO in February.

Though American media coverage about child sex abuse by clergy has been extensive since a slew of cases came to light in Boston in 2002, Oscar-winning documentary director Alex Gibney wanted to connect individual stories with what he sees as systemic failures stemming from the top of the church.

“A lot of individual stories had been done about clerical sex abuse, but I hadn’t seen one that really connected the individual stories with the larger cover-up by the Vatican, so that was important,” Gibney told Reuters in an interview.

The film centers on the group of deaf men and their experiences as young boys attending St. John’s School for the Deaf in St. Francis, Wisconsin.

In a letter to the Vatican in 1998, the late Rev. Father Lawrence Murphy admitted abusing some 200 deaf boys over two decades beginning in the 1950s.

Murphy claimed he had repented, and asked to live out his last years as a priest, and was never defrocked or punished by civil authorities. He died in 1998.

In the film, the men communicate their frustrating attempts to bring their experiences to the attention of religious and civil authorities with effusive sign language and facial expressions, paired with voiceovers by actors such as Ethan Hawke.

The film also traces a convoluted bureaucracy – right up to the cardinal who is now Pope Benedict – to reveal a set of policies that the film portrays as often seeming more interested in preserving the Church’s image.

STRUGGLING TO BE HEARD

“These were deaf men whose voices literally couldn’t be heard, so there was a silence from them, and there was also this silence coming from the church, a refusal to confront this obvious crime, in part because they were covering it up,” said Gibney.

The Vatican has denied any cover-up in the Murphy case and in 2010 issued a statement condemning his abuse. It has criticized media reports about the Church’s handling of the cases as anti-Catholic.

Contrasting that, the film shows interviews with former church officials who talk openly of church policies to handle cases by “rehabilitating” abusive clergymen and snuffing out scandal.

Gibney said that all of the Vatican officials he contacted declined his interview requests.

Raised Catholic himself, Gibney no longer practices organized religion, but empathizes with Catholics who feel a sense of loyalty to the religion’s institutions and acknowledges that criticism of the church can feel like a personal attack.

“Mea Maxima Culpa,” a Latin phrase meaning “my most grievous fault” focuses on the failures of the Catholic Church‘s hierarchy. But Gibney – who won an Oscar for “Taxi to the Dark Side” – said the film’s theme transcends religion and is also relevant for secular institutions.

“This is obviously about the church, but it’s also a crime film,” he said. “It’s about abuse of power and it’s about how institutions instead of reckoning with problems try to cover them up. It’s always the cover-up that creates the problem.”

He cited the Jerry Sandusky sex abuse scandal that rocked Penn State University recently, and the BBC’s poor handling of abuse allegations against the late British TV personality Jimmy Savile as examples of secular institutions brought low by similar issues.

“The thing about predators is that they tend to hide in plain sight,” Gibney said. “You’re seeing it now with Sandusky, you’re seeing it now with Jimmy Savile in Great Britain, and you saw it with Father Murphy in the film.”

Gibney thinks that the public’s stubbornly rosy perceptions of charismatic authority figures, including priests, is a major factor in such scandals.

“They’re often involved in charity or good works,” he said of high-profile abusers. “That seems to give you license to do unbelievable things because people cut you all sorts of slack that they wouldn’t normally do for other people.”

(Editing by Christine Kearney and Richard Chang)

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Belize prime minister says McAfee “bonkers,” should help in murder case

BELIZE CITY (Reuters) – Belize‘s prime minister on Wednesday urged anti-virus software pioneer John McAfee to help the country’s police with a murder inquiry, calling McAfee “bonkers” for recent media statements.

“I don’t want to be unkind, but he seems to be extremely paranoid – I would go so far as to say bonkers,” Prime Minister Dean Barrow said in Belize City. “He ought to man up and respect our laws and go in and talk to the police.”

Belizean police want to question McAfee, 67, about the murder of his neighbor and fellow U.S. citizen, Gregory Viant Faull, 52, with whom McAfee had quarreled.

Police have been unable to track down McAfee since finding Faull dead on Sunday in his house on Ambergris Caye, an island off the coast. In an interview on Tuesday, McAfee said he had gone into hiding because he believed Belizean authorities were trying to frame him for Faull’s murder.

“You can say I’m paranoid about it, but they will kill me, there is no question. They’ve been trying to get me for months,” Wired magazine’s website quoted McAfee as saying. “I am not well liked by the prime minister.

According to the magazine, which has published details of several interviews with the entrepreneur, McAfee says he has been riding in boats, hunkering down on the floorboards of taxis, and sleeping in a bed that he said was infested with lice.

Since he went into hiding, McAfee has repeatedly told Wired he had nothing to do with Faull’s death. Explaining his actions, McAfee said he does not want to give himself up because he is afraid the authorities will torture or kill him.

But McAfee said they would track him down in the end. On Wednesday, the magazine said that McAfee claimed to have dyed his hair, eyebrows, beard, and mustache jet black.

“I’ll probably look like a murderer, unfortunately,” it quoted him as saying.

PUBLIC SPOTLIGHT

Barrow called McAfee’s statements “nonsense,” noting he had “never met the man” and that the media attention McAfee had attracted was offering him “the best possible safeguard.”

“It’s not as if the police have said he is a suspect and certainly there is no question at this point of charges pending,” Barrow said. “The fact that this is smeared across international headlines means the police would have to act extremely cautiously in the full glare of the public spotlight.”

McAfee, who invented the anti-virus software that bears his name, has homes and businesses in Belize, and is believed to have settled around 2010 in the tiny Central American nation bordered by Mexico and Guatemala.

There is already a case pending in Belize against McAfee for possession of illegal firearms, and police previously suspected him of running a lab to make the synthetic drug crystal meth.

On Wednesday, Belizean police said they had charged McAfee’s British bodyguard William Mulligan, 29, and Mulligan’s wife, Stefanie, 22, for having unlicensed weapons and ammunition.

Barrow rejected statements made by McAfee and an associate that the software pioneer was being targeted for refusing to donate to Belize’s ruling United Democratic Party (UDP) to help fund its successful re-election bid in March.

“I know of no individual in the UDP who has spoken to McAfee about contributions,” Barrow said.

McAfee was one of Silicon Valley’s first entrepreneurs to build an Internet fortune. The ex-Lockheed systems consultant started McAfee Associates in 1989. He now has no relationship with the company, which was sold to Intel Corp.

(Writing by Gabriel Stargardter; Editing by Dave Graham and Eric Walsh)

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Big rise in Americans with diabetes, especially in South

CHICAGO (Reuters) – A breakdown of U.S. diabetes cases shows dramatic increases in the number of people diagnosed with diabetes overall between 1995 and 2010, with especially sharp increases among people in the South and in Appalachian states.

According to a study released on Thursday by the U.S. Centers for Disease Control and Prevention, the number of diagnosed cases of diabetes grew by 50 percent or more in 42 U.S. states, and by 100 percent or more in 18 states.

In 2010, 18.8 million Americans had been diagnosed with diabetes and another 7 million had undetected diabetes, according to the CDC.

States with the largest increases over the 16-year period were Oklahoma, up 226 percent; Kentucky, up 158 percent; Georgia, up 145 percent; Alabama, up 140 percent, Washington, up 135 percent, and West Virginia, up 131 percent, according to the study published in CDC’s Morbidity and Mortality Weekly Report.

“Regionally, we saw the largest increase in diagnosed diabetes prevalence in the South, followed by the West, Midwest, and Northeast,” Linda Geiss, a statistician with CDC’s Division of Diabetes Translation and lead author of the report, said in a statement.

The findings reinforce data from other studies showing that southern and Appalachian states were experiencing the biggest regional gains in diabetes diagnoses, Geiss said.

Although much of the increase in the number of people diagnosed with diabetes is likely due to more people developing the condition, the study also notes that diabetes treatments have improved, which may mean that more people are living longer with their disease.

Type 2 diabetes, which can be prevented through lifestyle changes, accounts for 90 percent to 95 percent of all diabetes cases in the United States, according to the CDC.

“These rates will continue to increase until effective interventions and policies are implemented to prevent both diabetes and obesity,” Ann Albright, director of CDC’s Division of Diabetes Translation, said in a statement.

Globally, there are now 371 million people living with diabetes, up from 366 million a year ago, according to the latest report by the International Diabetes Federation, up from 366 million a year ago.

Without significant lifestyle changes, the group projects as many as 552 million will have diabetes by 2030.

(Editing by Cynthia Osterman)

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A father's anguish in Gaza

Jihad Misharawi carries his son’s body at a Gaza hospital. (AP)

Jihad Misharawi, a BBC Arabic correspondent who lives in Gaza, tragically became part of the story he's been covering on Wednesday, when an Israeli airstrike killed his 11-month-old son.

A chilling photo showing Misharawi carrying his son's body through al-Shifa hospital in Gaza City was published by the Associated Press and printed on the front page of Thursday's Washington Post.

According to Paul Danahar, the BBC's Middle East bureau chief, Misharawi's sister-in-law was also killed in the the airstrike that hit his home in Gaza. Misharawi's brother was also seriously wounded, Danahar said.

"This is a particularly difficult moment for the whole bureau in Gaza," BBC World editor Jon Williams wrote in a memo to colleagues. "We're fortunate to have such a committed and courageous team there. It's a sobering reminder of the challenges facing many of our colleagues."

At least 10 Palestinians, including Hamas military chief Ahmed al-Jabari, were killed during the Israeli airstrikes on Wednesday, Palestinians officials said.

Israel launched the operation in response to successive days of rocket fire coming out of Gaza. Hamas, meanwhile, warned Jabari's assassination "had opened the gates of hell."

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Canada’s Carney says rate hikes “less imminent”

TORONTO (Reuters) – Interest rate hikes have become less imminent than the Bank of Canada once expected, although rates are still likely to rise, central bank Governor Mark Carney said in an interview published on Saturday.

“Over time, rates are likely to increase somewhat, but over time, so a less imminent timing relative to our expectation,” Carney said in an interview with the National Post newspaper.

Canada’s economy rebounded better than most from the global economic recession, and the Bank of Canada is the only central bank in the Group of Seven leading industrialized nations that is currently hinting at higher interest rates.

But Carney has also made clear that there will be no rate rise for a while, despite high domestic borrowing rates that he sees as a major risk to a still fragile economy.

“We’ve been very clear in terms of lines of defense in addressing financial vulnerabilities,” he said in the interview. “And the most prominent one, obviously, in Canada, is household debt.”

He said the bank was monitoring the impact of four successive government moves to tighten mortgage lending, which aimed to take the froth out of a hot housing market without causing a damaging crash in prices.

A Reuters poll published on Friday showed the majority of 20 forecasters believe the government has done enough to rein in runaway prices, preventing the type of crash that devastated the U.S. market.

The experts expect Canadian housing prices to fall 10 percent over the next several years, but they do not expect the recent property boom to end in a U.S.-style collapse.

(Reporting by Janet Guttsman; Editing by Vicki Allen)

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Springsteen, McCartney, Kanye set for Sandy show

NEW YORK (AP) — Paul McCartney, Bruce Springsteen & the E Street Band and Kanye West will hit the stage at a Superstorm Sandy benefit concert next month at Madison Square Garden.

MSG announced Thursday that Billy Joel, The Who, Alicia Keys and Jon Bon Jovi will also perform at the Dec. 12 show, dubbed “12-12-12.” More performers will be announced at a later date.

Proceeds from the concert will go to the Robin Hood Relief Fund to benefit those affected by Sandy in New York, New Jersey and Connecticut. Sandy’s assault more than two weeks ago created widespread damage and power outages throughout the area.

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Facebook jumps on biggest lock-up expiration day

NEW YORK (AP) — Facebook‘s stock is up more than 7 percent despite expectations that it would fall because more than 850 million additional shares in the company are being freed up for sale.

Shares of Facebook Inc. are up $ 1.48, or 7.5 percent, at $ 21.34. Facebook went public in May at $ 38 in a much-hyped initial public offering of stock that turned out to be a letdown for investors. Its stock price hasn’t hit $ 38 since.

Wednesday marked the expiration of Facebook’s biggest lock-up period, which is a time following an IPO that prevents insiders from selling stock. In all, 773 million shares became eligible for sale, along with 31 million restricted stock units. And about 48 million shares held by former Facebook employees also became eligible for sale, bringing the total to 852 million. These shares would be on top of what’s already been available for trading, increasing the supply and potentially lowering the overall price.

Lock-ups are common after initial public stock offerings and are designed to prevent a stock from experiencing the kind of volatility that might occur if too many shareholders decide to sell all at once.

The previous lock-up expired on Oct. 29, when U.S. stock markets were closed because of Superstorm Sandy. Facebook’s stock fell nearly 4 percent two days later, when the stock market reopened.

Cantor Fitzgerald analyst Youssef Squali believes a potential increase in the capital gains tax on Jan. 1, when Bush-era tax cuts would expire unless Congress acts, could pressure Facebook’s stock. That said, he called the Menlo Park, Calif.-based social media company a “long-term winner.”

Facebook’s stock saw its biggest one-day gain on Oct. 24, the day after the company reported stronger-than-expected third-quarter results and detailed for the first time how much money it made from mobile ads. The stock, which added 19 percent that day, closed at $ 23.23. Even with Wednesday’s gain, it is still 8 percent below that price.

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