DealBook: New Breed of SAC Capital Hire Is at Center of Insider Trading Case

When Mathew Martoma walked onto the trading floor at SAC Capital Advisors six years ago, he represented a new breed of employee at the giant hedge fund.

Steven A. Cohen, SAC’s billionaire founder, had burnished his reputation as a market wizard by surrounding himself with hard-charging traders — many of them former college jocks and frat boys who thrived in the fund’s competitive, testosterone-fueled environment.

But the brainy and unassuming Mr. Martoma, armed with a Stanford business degree and an expertise in biomedicine, was part of a wave of SAC hires in a crack new research unit. They were just as driven but had more distinguished pedigrees, hailing from top investment banks and elite schools. They were drawn to the firm, in part, by the lavish annual bonuses Mr. Cohen bestowed upon his top performers, sometimes reaching into the tens of millions of dollars.

When Mr. Martoma walks into Federal District Court in Manhattan on Monday morning, he will represent something else: the latest in a growing list of former SAC employees who find themselves accused of breaking the law.

The case against Mr. Martoma, made in a criminal complaint filed by the government last week, represents a watershed moment in its multiyear investigation of insider trading at SAC. For the first time, prosecutors have linked Mr. Cohen to trading activity that the government contends was illegal.

Mr. Martoma has rebuffed efforts by federal authorities to persuade him to plead guilty and cooperate, said a person briefed on the investigation who was not authorized to discuss the case. But if he were to “flip,” Mr. Martoma could help the government with its investigation of Mr. Cohen.

The government has placed Mr. Martoma, 38, at the center of what it calls the most lucrative insider-trading scheme it has ever uncovered. Mr. Martoma is charged with corrupting a doctor who had access to secret drug data, then using that information to gain profits and avert losses totaling $276 million. Mr. Martoma closely collaborated with Mr. Cohen on the questionable trades, prosecutors contend. Mr. Cohen, 56, of Greenwich, Conn., has not been charged, and there is no allegation that he knew the information was confidential. Through a spokesman, Mr. Cohen said that he had at all times acted appropriately.

Charles A. Stillman, a lawyer for Mr. Martoma, who will appear before a federal magistrate judge Monday, said he expected his client to be exonerated.

But with Mr. Martoma’s arrest last week, the clouds over SAC, which is based in Stamford, Conn., and Mr. Cohen have darkened. The government has now implicated five former SAC employees in its sweeping investigation into insider trading; three have admitted their crimes. Three other SAC alumni have also been charged with illegal trading after they left the firm; two have pleaded guilty.

Former employees of Mr. Cohen, all of whom spoke on the condition of anonymity, said that the case against Mr. Martoma highlighted SAC’s high-stress, pressure-packed culture. They described a ruthless place where those who helped Mr. Cohen make money would earn fortunes, while laggards could be fired abruptly, even for a single wrong-way trade.

Though SAC, with about 1,000 employees, manages about $14 billion in assets and has pushed into more esoteric investment strategies, at its core the firm buys and sells stocks. Mr. Cohen and his staff are known for relentlessly digging for information about publicly traded companies to form a “mosaic,” building a complete picture of the company’s prospects that gives the firm an edge over other investors.

SAC hired Mr. Martoma to help Mr. Cohen gain that edge. The son of Indian immigrants, Mr. Martoma was born Ajai Mathew Mariamdani Thomas, but changed his name in 2003, according to legal records. Raised in Merritt Island, Fla., outside Cape Canaveral, Mr. Martoma graduated summa cum laude from Duke University in 1995, where he studied biomedicine, ethics and public policy. After college, Mr. Martoma worked in Washington at the National Human Genome Research Institute.

He spent a year and a half at Harvard Law School, then dropped out to earn a business degree at Stanford University. He blended his passion for medicine and a desire to work on Wall Street by pursuing a career as a stock analyst covering health care companies. After a stint at a smaller hedge fund, Sirios Capital Management in Boston, Mr. Martoma joined SAC.

He became part of a new unit, CR Intrinsic, which was set up as a research engine of SAC. CR Intrinsic (the CR stands for Cumulative Return) was led by Matthew Grossman, an ambitious young analyst who became Mr. Cohen’s right-hand man. Mr. Grossman had worked at Tiger Management, the hedge fund known for its rigorous research and longer-term investment horizon.

With a deep network of contacts in the pharmaceutical and biotech fields, Mr. Martoma made a mark at CR Intrinsic. The volatile health care stocks in which Mr. Martoma specialized had long been favorites of Mr. Cohen’s, offering the potential for big returns through betting on the outcome of events like clinical trials for promising drugs.

To bolster his knowledge, Mr. Martoma tapped into expert-network firms, which employ consultants who match money managers with industry specialists, including public company employees.

For an information-driven hedge fund like SAC, the temptation to exploit the expert-network relationship was immense, two former employees said.

Two of the former SAC employees who have admitted to insider trading said they used expert-network firms to obtain secret information about public companies. And of the roughly 70 insider trading cases that federal prosecutors in Manhattan have brought in the last three years, more than a dozen have involved expert networks.

Mr. Martoma’s case began in 2006, when the expert-network firm Gerson Lehrman Group connected him to Sidney Gilman, a neurology professor at the University of Michigan and a specialist in Alzheimer’s disease. Dr. Gilman, who moonlighted as a consultant for Gerson Lehrman, helped oversee clinical trials for bapineuzumab, or bapi, a new Alzheimer’s drug being jointly developed by Elan and Wyeth.

He also brazenly leaked to Mr. Martoma secret data about the trials throughout 2008, according to the government, violating his duty to the drug companies and breaching his agreement with Gerson Lehrman not to divulge confidential information to money managers. Dr. Gilman earned $108,000 from his work for SAC, the government said.

At first, Dr. Gilman’s positive updates on the Alzheimer’s drug trials emboldened SAC to make big bets on Elan and Wyeth, prosecutors said. Mr. Martoma worked closely with Mr. Cohen on the investments, highlighting the drug companies in his weekly “best ideas” list submitted to Mr. Cohen. SAC accumulated $700 million worth of Elan and Wyeth shares, making it one of the fund’s largest bets.

Prosecutors say that in July 2008 Dr. Gilman received more complete results about bapi showing problems with the drug’s efficacy. He then shared those results with Mr. Martoma, the government contends.

With the public announcement of the data just a week away, Mr. Martoma e-mailed Mr. Cohen on a Sunday, according to the complaint. Within the hour, the two were on the phone and spoke for 20 minutes, prosecutors say.

Over several days, SAC not only sold its entire positions in Elan and Wyeth, but shorted, or bet against, the drug companies’ shares, the government said. On July 29, the companies announced results of the drug trial and their shares sank. SAC avoided about $194 million in losses by selling the stocks and then made $83 million by shorting them, according to court filings. Still, SAC paid Mr. Martoma a $9.4 million bonus in 2008 that was largely attributable to his contributions on the Elan and Wyeth trades, prosecutors said. But the firm fired him in early 2010 after his stock picks flagged. The case against Mr. Martoma stemmed in part from a referral made to federal securities regulators. In 2008, the Financial Industry Regulatory Authority observed unusual short-sales in the drug stocks and noted the abnormal activity, regulators said.

Prosecutors recently reached a nonprosecution agreement with Dr. Gilman, meaning they will not charge him. The Justice Department rarely strikes nonprosecution agreements with individuals. The government’s deal with Dr. Gilman, legal experts say, could put pressure on Mr. Martoma to strike a plea deal and cooperate.

Alain Delaquérière contributed reporting.

A version of this article appeared in print on 11/26/2012, on page B1 of the NewYork edition with the headline: New Breed of SAC Capital Hire Is at Center of Insider Trading Case.

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Attack on Pakistani Shia Muslims kills five, injures 70

ISLAMABAD, Pakistan — A bomb blast in northwest Pakistan killed five people and injured 70 others Sunday, provincial and local authorities said, the latest in a wave of attacks that have struck the country’s minority Shia Muslim community despite a host of stringent security measures, including wide-scale cellphone service bans and prohibitions on motorcycle riding in several cities.

The attack in Dera Ismail Khan was the second to strike the city of 119,000 this weekend and the fourth in five days directed at Shia Muslims as they commemorate the anniversary of the 7th century martyrdom of Imam Hussein, a grandson of the prophet Muhammad. A remote-controlled bomb planted in a shop exploded as a procession of Shia Muslims passed by, police said.  

On Saturday in Dera Ismail Khan, seven people were killed and 26 others injured by a remote-controlled bomb buried under a pile of garbage that exploded while a Shia Muslim procession moved past. Shia Muslims commemorate Imam Hussein’s death with large processions that wend their way through cramped neighborhoods in dozens of Pakistani cities, creating a formidable challenge for police assigned to provide security for the mourners.

No one had claimed responsibility for Sunday’s attack, though suspicion immediately focused on the Pakistani Taliban, the country’s homegrown insurgency. The group had previously said it was behind the wave of violence against Shia Muslims earlier in the week. The Shia Muslim community remains a prime target for the Pakistani Taliban and other Sunni militant groups, which regard Shia Muslims as heretics.

In one of the earlier attacks this week, a suicide bomber slipped into a procession of more than 150 Shia Muslims late Wednesday in the garrison city of Rawalpindi and detonated his explosives-filled vest, killing 23 people and injuring 62 others, according to Rawalpindi police. Earlier on Wednesday, militants detonated two bombs outside a Shia mosque in Pakistan’s largest city, Karachi, killing two people and injuring 12 others.

Anticipating a spike in attacks, Pakistani officials late last week announced a series of restrictions aimed at curbing violence against Shia Muslims.

Cellphone service was suspended in dozens of Pakistani cities over the weekend, a measure aimed at preventing the use of cellphones as remote-control detonators. Because assailants often use motorcycles to carry out attacks, motorcycle riding was banned in Islamabad, the capital, and the southern cities of Hyderabad and Quetta. The Pakistani newspaper Express-Tribune reported that the northwest town of Haripur imposed a 15-day ban on the wearing of shawls and coats to prevent would-be attackers from hiding explosives and other weapons.

ALSO:

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Clashes erupt, offices ablaze after Egypt president expands power

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Tracking Mars: Curiosity Makes Its Mark on the Red Planet

Since Curiosity landed on mars on Aug. 6, the rover has traveled hundreds of feet over the Martian surface. In the process, it has tracked up the sandy, dusty terrain, leaving tire marks, scoop divots, Morse code and one tiny piece of itself behind.

Unlike the Apollo astronauts' footprints on the moon, Curiosity's trails will probably be wiped away by the planet's frequent wind and sand storms. But there is still something so incredible about these little ephemeral marks we are making on another world.

Though the physical traces won't last, their impact lives on in the images the rover is sending back to Earth. Here are some of our favorite shots of Curiosity's tracks on Mars.

Image: NASA/JPL-Caltech

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Rolling Stones return to mark 50 years in music

LONDON (Reuters) – The Rolling Stones take to the stage later on Sunday after a five-year hiatus to celebrate the golden jubilee of one of the most successful and enduring bands in rock and roll history.

Now in their mid-60s to early 70s, lead singer Mick Jagger, guitarists Keith Richards and Ronnie Wood and drummer Charlie Watts will perform five concerts – two at the O2 Arena in London on November 25 and 29 and three in the United States next month.

Joining them at the O2 on Sunday will be former band members Bill Wyman and Mick Taylor, the first time the two ex-Stones have performed with the group in more than 20 years.

And in a fresh announcement on Saturday, American R&B singer-songwriter Mary J. Blige and guitar great Jeff Beck have also been added to the lineup as special guests.

The flamboyant veterans behind a string of hits including “(I Can’t Get No) Satisfaction”, “You Can’t Always Get What You Want” and “Jumpin’ Jack Flash” have promised a “stunning” gig lasting more than two hours.

A sellout crowd of some 20,000 people is expected, in spite of widespread complaints from fans at ticket prices that ranged from 95 pounds ($ 150) to up to 950 pounds for a VIP seat.

Costs went far higher on secondary ticketing websites, although by Friday eBay was offering several seats to Sunday’s show at below face value and there were places still officially available at around 400 pounds apiece.

The band has defended the prices, saying that the shows are expensive to put on, although Billboard, a specialist music publication, reported that the quartet would be paid $ 25 million for the four shows first announced. A fifth was added later.

BURST OF ACTIVITY

The concerts are the culmination of a busy few months of events, rehearsals and recordings to mark 50 years since the blues-infused rockers first took to the stage at the Marquee Club on London‘s Oxford Street in July, 1962.

There has been a photo album, two new songs, a music video, a documentary film, a blitz of media appearances and a handful of warm-up gigs in Paris.

The O2 Arena was where another top band of the 1960s and 70s, Led Zeppelin, staged an eagerly awaited one-off reunion in 2007, and while the Stones have appeared together far more regularly, it is their first arena performance in six years.

One factor behind the long break has been Wood’s struggle with alcohol addition, according to Rolling Stone magazine, while Jagger and Richards also fell out over comments the guitarist made about the singer in a 2010 autobiography.

“We can’t get divorced – we’re doing it for the kids!” joked Richards in a recent interview after apologizing to Jagger.

While the rock and roll excesses of the swinging 60s and 70s are in the past for the band, and their very best songs may be behind them, music critics praised their recent single “Doom and Gloom” from the “GRRR!” greatest hits album just released.

And there have been hints from the band that the five gigs which wind up at the Newark Prudential Center on December 15 may not be the end of their reunion.

“Once the juggernaut starts rolling, it ain’t gonna stop,” Richards told Rolling Stone. “So without sort of saying definitely yes – yeah. We ain’t doing all this for four gigs!”

(Reporting by Mike Collett-White, editing by Paul Casciato)

Music News Headlines – Yahoo! News

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Lobbying, a Windfall and a Leader’s Family

The New York Times

Ping An, one of China’s largest financial services companies, is building a 115-story office tower in Shenzhen. The company is a $50 billion powerhouse now worth more than A.I.G., MetLife or Prudential.

SHENZHEN, China — The head of a financially troubled insurer was pushing Chinese officials to relax rules that required breaking up the company in the aftermath of the Asian financial crisis.

The survival of Ping An Insurance was at stake, officials were told in the fall of 1999. Direct appeals were made to the vice premier at the time, Wen Jiabao, as well as the then-head of China’s central bank — two powerful officials with oversight of the industry.

“I humbly request that the vice premier lead and coordinate the matter from a higher level,” Ma Mingzhe, chairman of Ping An, implored in a letter to Mr. Wen that was reviewed by The New York Times.

Ping An was not broken up.

The successful outcome of the lobbying effort would prove monumental.

Ping An went on to become one of China’s largest financial services companies, a $50 billion powerhouse now worth more than A.I.G., MetLife or Prudential. And behind the scenes, shares in Ping An that would be worth billions of dollars once the company rebounded were acquired by relatives of Mr. Wen.

The Times reported last month that the relatives of Mr. Wen, who became prime minister in 2003, had grown extraordinarily wealthy during his leadership, acquiring stakes in tourist resorts, banks, jewelers, telecommunications companies and other business ventures.

The greatest source of wealth, by far, The Times investigation has found, came from the shares in Ping An bought about eight months after the insurer was granted a waiver to the requirement that big financial companies be broken up.

Long before most investors could buy Ping An stock, Taihong, a company that would soon be controlled by Mr. Wen’s relatives, acquired a large stake in Ping An from state-owned entities that held shares in the insurer, regulatory and corporate records show. And by all appearances, Taihong got a sweet deal. The shares were bought in December 2002 for one-quarter of the price that another big investor — the British bank HSBC Holdings — paid for its shares just two months earlier, according to interviews and public filings.

By June 2004, the shares held by the Wen relatives had already quadrupled in value, even before the company was listed on the Hong Kong Stock Exchange. And by 2007, the initial $65 million investment made by Taihong would be worth $3.7 billion.

Corporate records show that the relatives’ stake of that investment most likely peaked at $2.2 billion in late 2007, the last year in which Taihong’s shareholder records were publicly available. Because the company is no longer listed in Ping An’s public filings, it is unclear if the relatives continue to hold shares.

It is also not known whether Mr. Wen or the central bank chief at the time, Dai Xianglong, personally intervened on behalf of Ping An’s request for a waiver, or if Mr. Wen was even aware of the stakes held by his relatives.

But internal Ping An documents, government filings and interviews with bankers and former senior executives at Ping An indicate that both the vice premier’s office and the central bank were among the regulators involved in the Ping An waiver meetings and who had the authority to sign off on the waiver.

Only two large state-run financial institutions were granted similar waivers, filings show, while three of China’s big state-run insurance companies were forced to break up. Many of the country’s big banks complied with the breakup requirement — enforced after the financial crisis because of concerns about the stability of the financial system — by selling their assets in other institutions.

Ping An issued a statement to The Times saying the company strictly complies with rules and regulations, but does not know the backgrounds of all entities behind shareholders. The company also said “it is the legitimate right of shareholders to buy and sell shares between themselves.”

In Beijing, China’s foreign ministry did not return calls seeking comment for this article. Earlier, a Foreign Ministry spokesman sharply criticized the investigation by The Times into the finances of Mr. Wen’s relatives, saying it “smears China and has ulterior motives.”

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Boxer Hector 'Macho' Camacho dies days after being shot in head

Hector “Macho” Camacho, a former three-division boxing champion who had 88 professional fights against a who’s who of legendary opponents stretching from Ray Mancini (whom he defeated in 1989) to Oscar De La Hoya (who beat him by decision in 1997), has died. He was 50.

Camacho was pronounced dead Saturday after being shot in the head four days earlier while seated in a car outside a bar in Bayamon, Puerto Rico. Camacho’s condition deteriorated before his family opted to take him off life support.

Another man in the car, who had nine bags of cocaine in his possession, was also shot and immediately declared dead, according to the Associated Press.

PHOTOS: Hector “Macho” Camacho

Camacho, known for wearing outlandish trunks ranging from a leopard loin cloth to others adorned with lights or tassels, well understood the importance of selling a fight and employing some mental warfare.

Before fighting Mancini, he said, “I never did nothing to the character. How can he dislike a good-looking guy like me? It's jealousy. He can't even be in the same room with me because he knows he can't beat me mouth-to-mouth.”

The late Times columnist Jim Murray assessed the crowd-pleasing disparity between De La Hoya and Camacho like this:

“Oscar was winning a gold medal for his country, Macho was stealing one for himself. Oscar plays golf, Macho plays craps. He was a hyperactive child, and he's a hyperactive adult.

“He has a positive flair for rubbing people the wrong way, doing exactly what nobody wants. For instance, in his last fight, he committed the unpardonable sin of beating up Sugar Ray Leonard, no less. That's about as endearing to the public as burning the flag.”

Camacho’s theatrics were combined with an admirable desire to take on the best opponents possible. He faced the likes of Freddie Roach, Cornelius Boza Edwards, Rafael “Bazooka” Limon, Felix Trinidad, Roberto Duran and Julio Cesar Chavez Sr. His overall record was 79-6-3.

Camacho was born in Bayamon on May 24, 1962, and moved to New York City with his family. His career launched after he admitted to stealing cars in Spanish Harlem as a youth, with one transgression forcing him to jail in Rikers Island, N.Y. There, he boxed other inmates and was so good, one asked a question that stuck with him: “What are you doing here?”

“When he was young, you couldn’t hit him, that’s why he won his first 50 fights,” veteran boxing publicist Bill Caplan said.

The success emboldened his flair for flamboyance, as former Times boxing writer Richard Hoffer captured in a 1985 story:

“His style of dress … is outlandish enough to make Liberace look reserved. He wears enough jewelry to make Mr. T look like a man who only dabbles in accessories. It must be great fun to watch Camacho walk through a metal detector.”

When Camacho suffered his first loss in a 1991 World Boxing Organization lightweight title bout against Greg Haugen at Caesars Palace in Las Vegas, his personable nature shined.

“You’d think the guy would be devastated, but 15 minutes after the loss, he was back in press row for the second fight of the HBO doubleheader, shaking everyone’s hands,” Caplan said. “Just a happy-go-lucky guy who loved people.”

The flash wasn’t a mask to toughness. He was never knocked out.

Camacho’s grit was unmistakable to anyone who observed his 1992 beating in front of a sold-out Las Vegas fight crowd at the hands of Chavez Sr., Mexico’s greatest fighter who was at his peak when he pummeled Camacho with body shots en route to a unanimous decision.

De La Hoya knew the importance of beating up and knocking down Camacho in their 1997 bout:

“Listen, Chavez … and Felix Trinidad couldn't knock him out or drop him,” De La Hoya said afterward. “At least I dropped him.”

Camacho’s love of the sport was evident both in his desire to entertain beyond fisticuffs and instances such as his 1995 fight in the Olympic Auditorium in Los Angeles.

There, recalled promoter Don Chargin, main-event fighter Camacho showing up with his hands wrapped, in a robe and colorful trunks to sit alongside off-night fighters and managers in complimentary seats to watch preliminary matches 90 minutes before his own bout against Tony Rodriguez.

“He just wanted to be with people,” Caplan said.

Camacho’s son, Hector Camacho Jr., is a middleweight boxer with a 54-5-1 record who most recently fought in July.

lance.pugmire@latimes.com

twitter.com/latimespugmire

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How One <em>Myst</em> Fan Made Himself a Real-Life Linking Book

The classic PC game Myst was known for drawing people in to its massive, surreal world. But maker Mike Ando took a little piece of that world and drew it into ours. He made a lovingly authentic replica of the Linking Book that helps the main character — you — navigate the world.

Myst was a ground-breaking point-and-click adventure game created by Cyan Worlds, made of hundreds of beautifully rendered scenes whose combined size made the game so big that it needed a CD-ROM to play, back when many computers didn’t have them. It was the first breakout hit in PC gaming and from its release in 1993 it held the title of best-selling PC game until 2002 when The Sims surpassed it.

The game spawned four sequels, along with novels, music, and an MMO that is still online and being powered by donations from the fan base. The games have been widely ported and the game — once so huge that you needed special hardware to run it — is now available for download on iOS (among other places). In other words, it’s a pretty big deal.

At the core of Myst’s story was a mystical technology called Linking Books that pulled players into other realms, called Ages. They were these beautiful old tomes that, when opened, showed an animated preview of the Age to which you’d be linked.

“Ever since I first played the game, I always wanted my own linking book,” says Ando, “Of course, there was no way my old bulky 486 would fit within a book, but as time marched on technology advanced and computers became smaller. Eventually technology caught up and it was possible to shrink everything down to fit inside the book.”

Ando says his drive to make this project began six years ago when he learned where Cyan got the texture reference for the books — Harper’s New Monthly Magazine, Volume LIV, Issue 312, December 1876 to May 1877. “My mind hatched all sorts of plans about what I’d do once I had the book,” he says, “and finally I decided to set the bar as high as I could — all the Myst games, all playable, and playable well, even the 3-D ones at 30fps.”

To do this, Ando needed to perform two main feats. First, he needed to find the parts to make a computer that would fit in an extremely limited space. Then, he needed to restore the antique book, customize it to look like the ones from Myst, and gut it to make room for the compact computer that would power the game.

“Research was the main skill involved,” says Ando, “I spent hundreds of hours, literally, trying to find suitable components to meet all my requirements.”

To build the tiny computer that powers the Linking Book, Ando needed to find a X86 board that could fit inside. Most mobile devices run on ARM, but Ando wanted to run the original releases of each game, so porting wouldn’t do. It had to be X86.

“To give you an idea of how uncommon it is to shrink an X86 computer down this small,” he says, “the smallest X86 computer made by Apple, the Mac Mini, is 17 cm — this book is only 12 cm, plus I had to squeeze in my own power source and screen.”

The parts that made up the computer came from specialist vendors that ordinarily sell to aerospace and other niche enterprise customers. Ando ended up ordering a mixture of store-bought parts, and custom PCB layouts, soldering the whole thing together and switching out components between a bunch of boards to get the most efficient versions. He says he designed the touchscreen controller himself.

And as for the touchscreen itself? At one point in his search, he found himself talking to a vendor in China to arrange for a custom design. “His English skills were so poor I suggested we talk in Chinese and I used Google Translate, so I guess you could add that to my skills,” he says. “I suspect he just found one already to size and charged me as if they made it. If so, good for him — I couldn’t find one anywhere.”

For restoration and preparation of the book, Ando turned to Ian Bates, the president of the Australian Bookbinding Association. Bates handled the restoration of the cover, along with cutting the pages and embossing the book with the Myst logotype (but only after Ando had picked which of the several versions of the Myst font they should use).

If you find yourself gasping in horror at the idea that a book restorer would destroy a beautiful old book for a strange electronics project, Ando wants to assure you that nothing of value was lost. “The book I used is basically a cross between a Reader’s Digest & a gossip magazine and many of the articles are incomplete,” he says, “Today, books like this are sold to interior designers literally by the meter without any care given to their contents, author or title. Their main value rests on the aesthetics of their spine.”

Photos courtesy of Mike Ando.

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China’s ‘Beijing Blues’ wins at Taiwan film fest

TAIPEI, Taiwan (AP) — China‘s “Beijing Blues” has won the best film award at Taiwan’s Golden Horse Film Festival, an event considered the Chinese-language Oscars. Hong Kong‘s Johnnie To is taking home the best director’s award

“Beijing Blues” portrays the lives of the ordinary urban dwellers through the work of a squad of plainclothes crime-hunters.

At Saturday’s ceremony, To won the award for directing “Life Without Principle,” a movie about ordinary citizens’ struggles in hard economic times.

The film has also won veteran Hong Kong actor Lau Ching Wan the best actor’s award. Lau portrays a triad thug seeking to recover money lost in a loan shark scheme.

Taiwan’s Gwei Lun-mei won the best actress award for portraying a woman involved in a romantic triangle in “GF-BF” or “Girlfriend-Boyfriend.”

Entertainment News Headlines – Yahoo! News

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Scientists See Advances in Deep Learning, a Part of Artificial Intelligence

Hao Zhang/The New York Times

A voice recognition program translated a speech given by Richard F. Rashid, Microsoft’s top scientist, into Mandarin Chinese.

Using an artificial intelligence technique inspired by theories about how the brain recognizes patterns, technology companies are reporting startling gains in fields as diverse as computer vision, speech recognition and the identification of promising new molecules for designing drugs.

The advances have led to widespread enthusiasm among researchers who design software to perform human activities like seeing, listening and thinking. They offer the promise of machines that converse with humans and perform tasks like driving cars and working in factories, raising the specter of automated robots that could replace human workers.

The technology, called deep learning, has already been put to use in services like Apple’s Siri virtual personal assistant, which is based on Nuance Communications’ speech recognition service, and in Google’s Street View, which uses machine vision to identify specific addresses.

But what is new in recent months is the growing speed and accuracy of deep-learning programs, often called artificial neural networks or just “neural nets” for their resemblance to the neural connections in the brain.

“There has been a number of stunning new results with deep-learning methods,” said Yann LeCun, a computer scientist at New York University who did pioneering research in handwriting recognition at Bell Laboratories. “The kind of jump we are seeing in the accuracy of these systems is very rare indeed.”

Artificial intelligence researchers are acutely aware of the dangers of being overly optimistic. Their field has long been plagued by outbursts of misplaced enthusiasm followed by equally striking declines.

In the 1960s, some computer scientists believed that a workable artificial intelligence system was just 10 years away. In the 1980s, a wave of commercial start-ups collapsed, leading to what some people called the “A.I. winter.”

But recent achievements have impressed a wide spectrum of computer experts. In October, for example, a team of graduate students studying with the University of Toronto computer scientist Geoffrey E. Hinton won the top prize in a contest sponsored by Merck to design software to help find molecules that might lead to new drugs.

From a data set describing the chemical structure of 15 different molecules, they used deep-learning software to determine which molecule was most likely to be an effective drug agent.

The achievement was particularly impressive because the team decided to enter the contest at the last minute and designed its software with no specific knowledge about how the molecules bind to their targets. The students were also working with a relatively small set of data; neural nets typically perform well only with very large ones.

“This is a really breathtaking result because it is the first time that deep learning won, and more significantly it won on a data set that it wouldn’t have been expected to win at,” said Anthony Goldbloom, chief executive and founder of Kaggle, a company that organizes data science competitions, including the Merck contest.

Advances in pattern recognition hold implications not just for drug development but for an array of applications, including marketing and law enforcement. With greater accuracy, for example, marketers can comb large databases of consumer behavior to get more precise information on buying habits. And improvements in facial recognition are likely to make surveillance technology cheaper and more commonplace.

Artificial neural networks, an idea going back to the 1950s, seek to mimic the way the brain absorbs information and learns from it. In recent decades, Dr. Hinton, 64 (a great-great-grandson of the 19th-century mathematician George Boole, whose work in logic is the foundation for modern digital computers), has pioneered powerful new techniques for helping the artificial networks recognize patterns.

Modern artificial neural networks are composed of an array of software components, divided into inputs, hidden layers and outputs. The arrays can be “trained” by repeated exposures to recognize patterns like images or sounds.

These techniques, aided by the growing speed and power of modern computers, have led to rapid improvements in speech recognition, drug discovery and computer vision.

Deep-learning systems have recently outperformed humans in certain limited recognition tests.

Last year, for example, a program created by scientists at the Swiss A. I. Lab at the University of Lugano won a pattern recognition contest by outperforming both competing software systems and a human expert in identifying images in a database of German traffic signs.

The winning program accurately identified 99.46 percent of the images in a set of 50,000; the top score in a group of 32 human participants was 99.22 percent, and the average for the humans was 98.84 percent.

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New Zealand Wants a Hollywood Put on Its Map

WELLINGTON, New Zealand — Standing by his desk in New Zealand’s distinctive round Parliament building, known locally as the Beehive, Prime Minister John Key proudly brandished an ornately engraved sword. It was used, he said, by Frodo Baggins, the protagonist of the “Lord of the Rings” trilogy, and in the films it possesses magical powers that cause it to glow blue in the presence of goblins.

“This was given to me by the president of the United States,” said Mr. Key, marveling that President Obama’s official gift to New Zealand was, after all, a New Zealand product.

In Mr. Key’s spare blond-wood office — with no goblins in sight — the sword looked decidedly unmagical. But it served as a reminder that in New Zealand, the business of running a country goes hand in hand with the business of making movies.

For better or worse, Mr. Key’s government has taken extreme measures that have linked its fortunes to some of Hollywood’s biggest pictures, making this country of 4.4 million people, slightly more than the city of Los Angeles, a grand experiment in the fusion of film and government.

That union has been on enthusiastic display here in recent weeks as “The Hobbit: An Unexpected Journey,” the first of three related movies by the director Peter Jackson, approached its world premiere on Wednesday in Wellington (and on Dec. 14 in the United States). Anticipation in New Zealand has been building, and there are signs everywhere of the film’s integration into Kiwi life — from the giant replica of the movie’s Gollum creature suspended over the waiting area at Wellington Airport to the gift shops that are expanding to meet anticipated demand for Hobbit merchandise (elf ears, $14).

But the path to this moment has been filled with controversy. Two years ago, when a dispute with unions threatened to derail the “Hobbit” movies — endangering several thousand jobs and a commitment of some $500 million by Warner Brothers — Mr. Key persuaded the Parliament to rewrite its national labor laws.

It was a breathtaking solution, even in a world accustomed to generous public support of movie projects, and a substantial incentive package was included: the government agreed to contribute $99 million in production costs and add $10 million to the studio’s marketing budget. And its tourism office will spend about $8 million in its current fiscal year, and probably more in the future, as part of a promotional campaign with Time Warner that is marketing the country as a film-friendly fantasyland.

For a tiny nation like New Zealand, where plans to cut $35 million from the education budget set off national outrage earlier this year (and a backtrack from the government), the “Hobbit” concessions were difficult for many to swallow, especially since the country had already provided some $150 million in support for the three “Lord of the Rings” movies.

Now, even amid the excitement of the “Hobbit” opening, skepticism about the government’s film-centric strategy remains. And recently it has become entangled with new suspicions: that Mr. Key’s government is taking cues from America’s powerful film industry in handling a request by United States officials for the extradition of Kim Dotcom, the mogul whose given name was Kim Schmitz, so he can face charges of pirating copyrighted material.

New Zealand’s political scene erupted in September, as Mr. Key publicly apologized to Mr. Dotcom for what turned out to be illegal spying on him by the country’s Government Communications Security Bureau. The Waikato Times, a provincial paper, taunted Mr. Key, accusing him of making New Zealand the “51st state,” while others suggested that a whirlwind trip by Mr. Key to Los Angeles in early October was somehow tied to the Dotcom case.

“No studio executive raised it with me,” Mr. Key said in an interview last month. He spoke the day after a private dinner where he lobbied executives from Disney, Warner Brothers, Fox and other companies for still more New Zealand film work, with Mr. Jackson, a New Zealander, joining by video link.

Mr. Key has been sharply criticized for cozying up to Mr. Jackson in what some consider unseemly ways. Last year, a month before elections in which he and his National Party were fighting to keep control of the government, Mr. Key skipped an appointment with Queen Elizabeth II in Australia to visit the Hobbiton set. He also interviewed Mr. Jackson on a radio show, prompting an outcry from the opposition.

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