Chicago man gets 35 years for role in Mumbai terror attack









David Coleman Headley, the terrorist who played a key planning role in the Mumbai massacre that killed more than 160 people in 2008, was sentenced today in Chicago’s federal court  to 35 years in prison.


U.S. District Judge Harry Leinenweber could have imposed a life sentence but chose the sentence recommended by federal prosecutors who wanted Headley rewarded for his extensive cooperation in spite of his help in the deadly attacks in India.

Before imposing the 35-year prison term, the judge said he wanted to make sure Headley, 52, is "never in a position again to commit a terrorist attack."

Leinenweber was skeptical of a letter that Headley recently wrote to him. "I don't have any faith in Mr. Headley when he says he's a changed person," the judge said.

Headley should be "under lock and key for the rest of his life," Leinenweber said.


In the letter, Headley claimed he was learning to embrace "American values" and coming to grips with how he was convinced to plan terrorist attacks under the guise of religious obligation, Leinenweber said.

"Mr. Headley's letter to the judge expressed his sincere remorse," Robert Seeder, one of Headley's attorney, told reporters after the sentencing. "He did explain in that letter what led him to this and how sorry he was. And I think we'll leave it at that."

During the hearing, another defense attorney told the judge that Headley "literally saved lives" by providing valuable information that "no one else knew" about terrorist activities. "He has never minimized his role," attorney John Theis said. "He has accepted responsibility."

Theis told reporters later he had asked the judge for a specific sentence for Headley, but he declined to reveal the length, saying the request was made under seal.





Before the sentence was handed down, a victim of the terror attack told the judge how surprised she was by the youth of the terrorists who stormed into a hotel’s first-floor cafe while she was eating there.

Linda Ragsdale, a Nashville woman who was shot in the back during the 2008 rampage, recalled wondering how a man as young as her son could kill innocent people.  Holding back tears, Ragsdale described a barrage of bullets so intense that "waves of heat clouded" her vision.

"I know what a bullet could do to every part of the human body," Ragsdale said. "I know the sound of life leaving a 13-year-old child. These are things I never needed to know, never needed to experience."

Ragsdale also read from a statement written by another survivor of the shooting at the Oberoi Hotel who said it would be an "appalling dishonor" if Headley was sentenced to the 30 to 35 years in prison recommended by federal prosecutors.

But former U.S. Attorney Patrick Fitzgerald, making a surprise appearance at the sentencing hearing, told Leinenweber he should consider the “unusual nature” of Headley’s cooperation even though Headley was involved in a “very, very heinous crime.”

On the night of his arrest at O’Hare International Airport, Headley “freely admitted” his role in the Mumbai massacre within half an hour of being given his Miranda rights, Fitzgerald said.

Headley, 52,  appearing amid heightened security in Leinenweber’s courtroom, faced up to life in prison. He pleaded guilty to scouting out sites to be targeted in the terrorist attack that killed more than 160 people – including six Americans -- in India’s largest city. He also admitted playing a similar role in an aborted plot to storm a Danish newspaper and behead staffers in retaliation for printing a cartoon of the Prophet Muhammad.

Federal prosecutors have cited Headley’s extraordinary cooperation for seeking a sentence of 30 to 35 years in prison.

Headley, who was arrested at O'Hare as he prepared to fly overseas, detailed the inner-workings of Lashkar-e-Taiba, the Pakistani terror organization that planned the Mumbai attacks. His information led to charges against seven terrorist figures, including his childhood friend from a Pakistani school, Tahawwur Rana, a former Chicago businessman.

Headley was the key witness at the trial of Rana, who was convicted of aiding the Denmark plot and providing support to Lashkar.  Judge Leinenweber sentenced him  last week to 14 years in prison, about half what prosecutors sought.

Headley, an American citizen of Pakistani descent, came to the United States at age 17 and was twice convicted of drug smuggling in the late 1980s. He later agreed to work as an informant for the DEA. Headley also revealed during testimony  at Rana’s trial that there was an overlap between his work for the DEA and his early days with Lashkar.

Headley became involved with Lashkar, a radical group that opposes Indian rule in divided Kashmir, around 2000, attending training camps between 2002 and 2005. He had moved to Chicago by 2009 and reconnected with Rana.

Though embraced by Rana’s family, Headley lived a very different life that included multiple wives and apparently indoctrinating even his children with his ideologies. His 5-year-old son once dropped to the ground in a Chicago park and pretended to fire a weapon after a soccer coach yelled "shoot, shoot!" to him during a game, Headley testified at Rana’s trial.

The charges against Headley and Rana likely represented the most significant terrorism case brought during Fitzgerald’s nearly 11 years as Chicago’s chief federal prosecutor.

Bomb-sniffing dogs checked the coats and bags of all the spectators entering Leinenweber’s courtroom today.  At one point, more than 100 people had lined up to attend the sentencing.


asweeney@tribune.com





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RIM shares rise on report of Lenovo interest


TORONTO (Reuters) - Shares of Research In Motion Ltd rose 3 percent on Thursday after a report quoted China's Lenovo Group as saying a bid for the BlackBerry maker was among the options for boosting its mobile business.


"We are looking at all opportunities -- RIM and many others," Lenovo Chief Financial Officer Wong Wai Ming told Bloomberg in an interview at the World Economic Forum's annual meeting in Davos, Switzerland. "We'll have no hesitation if the right opportunity comes along that could benefit us."


Wong said Lenovo has spoken to RIM and its bankers about various combinations or strategic ventures, the Bloomberg report said.


Any bid for RIM, which Canadian Prime Minister Stephen Harper has described as a national "crown jewel," would face a rigorous review by the government to determine whether the deal would bring a "net benefit" to Canada.


Earlier this week, RIM shares surged to a 13-month high after Chief Executive Thorsten Heins said RIM may consider strategic alliances with other companies after next week's launch of devices powered by a new operating system.


In an interview with a German newspaper on Monday, Heins said RIM's review could potentially lead to the sale of its handset business or the licensing of its software to rival smartphone companies.


Analysts expressed skepticism about a Lenovo bid for RIM.


"Anybody who's serious about buying a company doesn't go talking it up...It sounds to me like a comment made more for publicity's sake than a serious approach for RIM," said Charter Equity analyst Ed Snyder. "It is a very long shot at the best. There's so many hurdles. One is regulatory of course."


Earlier this week, Canada's Industry Minister Christian Paradis told Reuters that the Canadian government might go to the extent of even reviewing a sale of RIM's handset business, following the comments made by RIM's CEO.


"I think third parties are always interested in making acquisitions, but to conclude that they (Lenovo) are going to buy RIM is a stretch," said RBC Capital Markets analyst Paul Treiber.


ALL OPTIONS EXAMINED


RIM announced a far-reaching strategic review last May under which it was expected to examine all options, from software licensing deals to an outright sale of the company.


After the comments from Lenovo, a RIM spokesman said the company had nothing new to report on its strategic review at this time.


"We continue to examine all available options to create new opportunities, focusing on areas where we will be more effective partnering rather than going it alone, and ultimately maximizing value for all stakeholders," said RIM spokesman Nick Manning.


The company, once a pioneer in the smartphone industry, has struggled in recent years as its aging line-up of devices lost market share to Apple Inc's iPhone and devices based on Google Inc's Android operating system.


RIM hopes its new touch-screen and keyboard devices, powered by its new BlackBerry 10 operating system, will help it claw back market share.


Shares of RIM were up 3.1 percent at $17.88 in midday trading on the Nasdaq. The Toronto-listed shares were up 3.5 percent at C$17.90. RIM is a volatile stock, and moves of 3 percent and more are not uncommon.


A spokesman for Lenovo said the comments made during the Bloomberg interview were consistent with previous statements on Lenovo's M&A strategy.


"Lenovo is very focused on growing its business, both organically and through M&A. When inorganic ideas arise, we explore them to see if there is a strategic fit," Lenovo spokesman Brion Tingler said in an e-mail.


RIM shares are down almost 90 percent from an all-time high of over C$148 in 2008, but the stock has rallied in the last four months as the launch of the BlackBerry 10 devices nears. Its shares have nearly tripled in value since dipping as low as C$6.22 in late September.


(Reporting by Euan Rocha in Toronto and Sinead Carew in New York; Editing by Frank McGurty and Leslie Gevirtz)



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Azarenka eludes chokehold, gains Australian final


MELBOURNE, Australia (AP) — Sloane Stephens sat for nine minutes, mostly staring at the court and trying to forget the curious timing of Victoria Azarenka's medical timeout.


She may have been the only one trying to ignore it.


The 19-year-old American had just saved five match points and broken Azarenka. But she knew she had to hold serve to stay in her first Grand Slam semifinal whenever Azarenka — the No. 1 player and defending Australian Open champion — returned to Rod Laver Arena.


The restless murmuring in the crowd gave way to slow claps. Why had Azarenka chosen that very moment for a medical break?


Azarenka eventually hustled onto the court, and Stephens won only three more points.


"I almost did the choke of the year," Azarenka said in a frank admission during an on-court interview. "At 5-3, having so many chances, I couldn't close it out."


The crowd that had cheered wildly for Stephens, only 25 hours after she ousted an injured Serena Williams, gave Azarenka tepid applause as she left the court. She'll face 2011 finalist Li Na in the final Saturday night. Given the support Li enjoyed in her 6-2, 6-2 win over No. 2-ranked Maria Sharapova, there's no question which player the crowd will favor in the title match.


Azarenka's immediate post-match remarks suggest she panicked after failing to convert five match points, her forehand misfiring. She had little trouble finishing the match after she came back, and the No. 29-seeded Stephens had cooled off.


"I just felt a little bit overwhelmed. I realized I'm one step away from the final and nerves got into me for sure," Azarenka said.


The 23-year-old Belarusian said she was later compelled to explain that she misunderstood the question in the on-court interview, and she wanted to dispel the perception that her medical timeout amounted to little more than gamesmanship.


"I understand the point of people maybe not understanding what I said; me not understanding what I've been asked," she said during an official news conference more than two-thirds devoted to questions on her medical timeout. "So I'm just glad that I'm here, you know, to make everything clear.


"You know, I think you cannot really judge by (a) few words. The situation had to be explained."


Medical staff said Azarenka had timeouts for treatment of left knee and rib injuries. The rib needed to be manipulated because it was affecting her breathing. Tournament director Craig Tiley said Azarenka hadn't broken any rules.


Azarenka hadn't helped herself in a second television interview after the match when she said she couldn't breathe.


"I had chest pains," she said. "It was like I was getting a heart attack."


She tried to allay any negative perception with her explanation that the choking was related to shortness of breath from the rib injury, not her faltering game.


"When you cannot breathe you start to panic," she said. "I was really panicking, not because I couldn't convert my match point. That's not the case. I mean, I'm experienced enough to go over those emotions. But when you cannot breathe, when something's really blocking you, the stress — that was the stress I was talking about.


"What I said — that I was stressed out and choked — was not because I couldn't finish my shot. It was just so stressing me out the pain that I had that, maybe it was overreaction, but I just really couldn't breathe."


Azarenka had retired during previous Grand Slam matches, including a fourth-round match against Serena Williams at the 2009 Australian Open. But with a second major title so close, and the fact she needed to reach the final to retain the No. 1 ranking, she desperately didn't want to quit this time.


For her part, Stephens seemed sympathetic. She had to wait through a medical timeout Wednesday when Williams received treatment for a sore back — the 15-time major winner injured herself after leading by a set and a break. Another rival earlier in the tournament took a long break between sets for other reasons.


"I mean, when you take a medical break or timeout, obviously it's for a reason," she said. "I mean, just another something else that happens. If it was one of my friends, I would say, 'Oh, my God, that sounds like a PP, which is a personal problem. Other than that, it's just unfortunate."


Besides, Stephens said, it didn't affect the outcome of the match.


"No, not at all. She played obviously a really good match," she said. "First set she played awesome; got close in the second. It didn't go my way, but I wouldn't say at all what happened affected the match."


Novak Djokovic dispensed with No. 4-seeded David Ferrer 6-2, 6-2, 6-1 in the night match, saying he "played perfectly" to reach his third consecutive Australian Open title match. Then he dispensed some medical advice of his own.


The Serb, who won the Australian titles in 2008, 2011 and 2012, wore a white shirt with a red cross on the back, pretending to be a doctor to treat Henri Leconte during a legends doubles match at Rod Laver Arena.


He's relaxed now that he has an extra day to prepare for Sunday's final. Djokovic will next play the winner of Friday's semifinal between No. 2 Roger Federer, a four-time Australian Open champion, and No. 3 Andy Murray, the U.S. Open champion.


Djokovic lost only seven points in 11 service games against Ferrer, and hit 30 crisp, clean winners in an almost flawless performance.


"I cannot remember the last time I played so well," Djokovic said. "I've played many great matches, but this one stands out. Hopefully, I can play the same level on Sunday."


He played confidently in the first two sets, and was sublime in the third. Even Ferrer, who has now lost five Grand Slam semifinals and never reached a championship match, was surprised.


After hitting a forehand a fraction wide of the line and losing his challenge in a review, Ferrer double-faulted to give Djokovic match point. The errors were a measure of just how much pressure Djokovic was applying.


Right after his semifinal, Djokovic started playing mind games leading to the final.


"Federer-Murray, when they're playing it's always very close," he said, confirming he'd be closely watching the match. "I wouldn't give the role of the favorite to either of them. I expect to enjoy it. Whoever I play against, I'm going to be ready."


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Aretha Franklin Approves of Beyonce’s ‘Beautiful’ Inaugural Lip-Syncing






LOS ANGELES (TheWrap.com) – Aretha Franklin r-e-s-p-e-c-t’s Beyoncé’s decision to use a “beautiful” pre-recorded rendition of the national anthem during President Barack Obama‘s inaugural ceremony on Monday.


The Queen of Soul, who sang “My Country ‘Tis of Thee” during Obama‘s inauguration in 2009, told ABC News that the cold weather warranted Beyoncé lip-syncing “The Star-Spangled Banner.”






“The weather down there was about 46 or 44 degrees and for most singers that is just not good singing weather,” Franklin said after noting the news gave her a good laugh. “When I heard that I just really cracked up. I thought it was really funny, but she did a beautiful job with the pre-record … next time I’ll probably do the same.”


She says “next time,” because she wasn’t afraid to brave below-freezing temperatures in Washington D.C. when she performed live four years ago. “In 2009, I wanted everything to be live and on the real side for the moment as it actually happened. Those were my feelings for my performance, but having come face to face with 28, 22 degrees I am not surprised she pre-recorded,” Franklin continued. “She wanted her performance to be what she wanted to be and she realized it wasn’t going to be the way she wanted it to be or she was going to be running a risk. That’s probably why she pre-recorded exactly how she wanted it to be heard.”


The 70-year-old Franklin isn’t the only music star shrugging off Beyoncégate. Jennifer Lopeztold Jon Stewart on Tuesday’s episode of “The Daily Show” that “all performers do have to” lip-sync at some point in their career.


“You know, sometimes it happens,” she explained. “When you’re in certain stadiums and in certain venues, they do pre-record things.”


Lopez’s former “American Idol” judging panel partner, Steven Tyler, isn’t particularly bothered by Beyoncé lip-syncing either. “It doesn’t matter,” he told TMZ.


“Beyoncé’s so hot, she can do anything,” the Aerosmith frontman added to give some shallow perspective. “Let’s just get real.”


Whether or not Beyoncé would agree with Tyler’s flattering statement, she has yet to comment on the matter herself, aside from posting the performance on her Tumblr — an action that suggests she has no regrets.


Meanwhile, the U.S. Marine Band that previously admitted to using a pre-recorded track to back her performance and suggested Beyoncé did the same for her vocals, has changed its tune.


“Each piece of music scheduled for performance in the Inauguration is pre-recorded for use in case of freezing temperatures, equipment failure, or extenuating circumstances,” a spokesman for the Marines told TheWrap on Tuesday. “Regarding Ms. Knowles-Carter’s vocal performance, no one in the Marine Band is in a position to assess whether it was live or pre-recorded.”


Music News Headlines – Yahoo! News




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CDC: New version of stomach bug causing US illness


NEW YORK (AP) — Health officials say a new strain of stomach bug that's sweeping the globe is taking over in the U.S.


In the last four months, more than 140 outbreaks in the U.S. have been caused by the new Sydney strain of norovirus. These kinds of contagious bugs cause bouts of diarrhea and vomiting.


The new strain may not be unusually dangerous; some scientists don't think it is. But it is different, and many people might not be able to fight off its gut-wrenching effects.


It often spreads in places like schools, cruise ships and nursing homes. The new strain was blamed for a recent outbreak on the Queen Mary 2.


The Centers for Disease Control and Prevention reported on the new strain Thursday.


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Online:


CDC report: http://www.cdc.gov/mmwr


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White, Underwood, Lumineers to perform at Grammys


NEW YORK (AP) — Grammy nominees Jack White, Carrie Underwood and the Lumineers will hit the Grammys stage next month.


The Recording Academy announced Thursday that those acts will join previously announced performers including fun., The Black Keys and Taylor Swift at the Feb. 10 awards show in Los Angeles.


White is nominated for album of the year and the Lumineers are up for best new artist.


U.K. newcomer Ed Sheeran and Elton John will perform together. Sheeran's "The A Team" is nominated for song of the year.


Country singers Miranda Lambert and Dierks Bentley will also join forces onstage.


The Black Keys, Rihanna and Mumford & Sons are also set to perform.


Frank Ocean, Jay-Z, fun., Kanye West, Black Keys' Dan Auerbach and Mumford & Sons lead with six nominations each.


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Online:


http://www.grammys.com


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United to cut 600 front-office jobs









United Continental Holdings Inc. will cut about 600 front-office jobs through voluntary and involuntary cuts, the company said Thursday as it announced disappointing financial losses for 2012.

The world's largest airline did not detail where cutbacks will take place, but Chicago is likely to be most affected considering the corporate headquarters and network operations center are in downtown Chicago and that Chicago O'Hare airport is one of the airline's largest hubs.

The job cuts were announced Thursday morning during a conference call about the airline's profits. United officials said they were disappointed in the airline company's 2012 performance and pledged to improve in 2013, both in financial performance and the airline's operational reliability.

They said they intend to win back corporate customers who defected to other airlines last year when the airline experienced periods of poor on-time performance and high cancellations rates. The operational problems, which have abated since the fall, stemmed from numerous computer-related glitches after the airline merged United and Continental customer reservation systems onto a common platform last March.

United CEO Jeff Smisek called 2012 "the toughest year of our merger integration," but that the airline was "back on track."

"Despite our integration pains, we accomplished an enormous amount and we are now in a position to go forward as a single carrier and compete effectively on a global scale," he said. "Our operations are running smoothly. Our many product improvements are rolling out and our customer satisfaction scores are climbing."

Smisek also said the airline maintains its confidence in the Boeing 787 Dreamliner, which was grounded in the U.S. and elsewhere after numerous glitches, including a serious fire hazard with its lithium ion batteries.

He said he had confidence in the airplane and "Boeing's ability to fix the issues just as they have done on every other new aircraft model they've produced."

Smisek said he has no indication on when the Federal Aviation Administration will allow the planes to fly again, including Dreamliner on a route between Chicago and Houston. Boeing is also based in Chicago.

United, the only U.S. carrier currently operating 787 planes, has six Dreamliners. Smisek said the company expects to take delivery of two additional 787s in the second half of this year.

EARNINGS

United Continental said it lost $723 million in 2012, or $2.18 per share. Excluding special charges of $1.3 billion, mostly related to merging United and Continental, the company earned $589 million, or $1.59 per share, meeting Wall Street analyst expectations.

In the fourth quarter, United lost $620 million, or $1.87 per share, compared with a loss of $138 million, or 42 cents per share, in the same quarter a year earlier.

It took charges of $430 million in the quarter, with much of that tied to paying off pension debt and costs for systems integration and training and severance. Excluding items, United said the 2012 quarterly loss was 58 cents a share, compared with a 61 cent loss expected by analysts on average, according to Thomson Reuters I/B/E/S.

Revenue fell 2.5 percent to $8.7 billion.

Superstorm Sandy, which barreled through the U.S. Northeast in late October, reduced revenue by about $140 million and profit by about $85 million in the fourth quarter. The storm caused shutdowns at major New York area airports, including New Jersey's Newark Liberty International where United operates a major hub.

CUSTOMER SERVICE

Customer service will be a larger focus for the airline, Smisek said during the conference call.

That focus includes a comprehensive customer service training program for airport agents, contact center agents and flight attendants, he said. It will also roll out a program called "It's Our Job," a companywide approach to customer service "that clearly explains our customer service standards and expectation for front line coworkers," Smisek said.

It will also include an expanded recognition program to reward employees for outstanding service, collecting more customer-satisfaction data and roll out of a new set of tools for airport agents, he said.

JOB CUTS

As far as the job cuts, they will not affect unionized workers, such as pilots, flight attendants and airport ground workers, a spokeswoman said. The airline in December reduced the officer ranks by several positions, representing 7 percent of managers with titles of vice president and higher. It will reduce management and administrative staff by 6 percent through voluntary and involuntary cuts and not filling empty positions.

Those cuts will begin in early February, Smisek said in a letter to employees Thursday morning.

gkarp@tribune.com

 
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2 men died in high-rise fire after rescuing elderly woman: officials

A high-rise fire on Chicago's south side killed two men and seriously injured a woman.









The two men who died in a South Shore high-rise fire had rescued an elderly woman on the seventh floor and had returned to the burning apartment with fire extinguishers when they apparently were overcome by smoke, officials said today.

Jameel Johnson, 36, and his co-worker, John Fasula, 50, were doing contract work for a cable company when the fire broke out on the seventh floor of the 16-story building in the 6700 block of South Shore Drive Tuesday morning. The two heard an 81-year-old woman screaming for help and placed her inside an elevator and pressed a button to take her to the first floor, according to police and David A. Fields Jr., Johnson’s cousin.

Fasula and Johnson returned to her apartment with fire extinguishers, police said. They were later found by firefighters, collapsed on the floor and were in full cardiac arrest, according to police and fire officials.

The woman collapsed on the floor of the lobby after the elevator doors opened, but was revived by paramedics and taken to the University of Chicago Hospitals, where she was listed in critical condition from smoke inhalation, according to police.

“He died a hero,” Fields said in a telephone interview. “They died saving a woman’s life.”

Johnson, the father of two girls, was working as a private contractor for a cable company, his family said. He did not like being inside high-rise buildings, but the company could not find a replacement, relatives said.

“He went with the understanding that maybe it was just a service call and he could be in and out,” Fields said. “He didn’t want to be in the high-rise building, that was his whole thing. He didn’t want to be there.”

Relatives described Johnson, an Englewood native, as a fun-loving man who did whatever he could to take care of his fiance and two children, ages 14 and 3. Johnson had ventured into different careers over the years, but returned to the cable business about a year ago.

“He was a good father who was just trying to make sure his kids had the best,” Fields said.

He had been with his fiance for 15 years and the family lives in Gary, Ind., Fields said. His youngest daughter still doesn’t understand what happened, relatives said.

“She’s still looking for her father to come home,” said Johnson’s aunt, Rosemary Cohns. “That’s the hardest part.”


Relatives of Fasula said they were not surprised to hear he risked his life for someone else.

“That’s how my brother-in-law was,” said Michelle Kozicki, 65, Fasula’s sister-in-law. “There’s never going to be another one like my brother-in-law Johnny. There’s not a bad bone in his body.”


Fasula was a maintenance manager for the CTA, spokeswoman Lambrini Lukidis said. He started working for the transit agency in 1983.








Fasula’s family knew he was at the apartment building for a “side job,” though she wasn’t sure what the work entailed. Kozicki said it was common for Fasula, who had been married for nearly 40 years, to work jobs outside his day job at the CTA.
 
“He didn’t like to sit still,” she said.

He went out of his way to help his father before he died in 2009. He was with him “every step of the way,” Kozicki said. For example, Fasula took time off of work to drive his father to doctor’s appointments.


Fire officials have said the fire apparently started in a bedroom on the seventh floor. Fire Department spokesman Larry Langford said the cause is undetermined pending further analysis of electrical information.  It does not appear suspicious, he added.

“In short, it generally means we have to have some items looked at,” Langford said of the analysis.


chicagobreaking@tribune.com


Twitter:@ChicagoBreaking





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Options market sees big move in Apple shares after earnings


NEW YORK/CHICAGO (Reuters) - The options market is bracing for a big move in Apple shares after it posts earnings on Wednesday amid what has been a dramatic plunge for the world's most valuable publicly traded company.


Apple Inc shares were trading at $512 on Tuesday, down sharply from $702.10 in September, on worries that its mobile devices are no longer as popular.


Based on options activity just hours before the announcement, due after the market close, traders were estimating about a 7 percent one-day move after the earnings, which would be a much more volatile outcome than normal for Apple. Such a move could push the shares as low as $465 or as high as $535, depending on how earnings come out.


"Three ingredients make this earnings for Apple especially appetizing for options traders: (CEO) Tim Cook has missed earnings estimates 60 percent of the time over the past five quarters, the stock has crashed almost 30 percent since September, and no stock has as many hedge funds owning it," said Gareth Feighery, a founder of options education firm Markettamer.com in Philadelphia.


"Combine those three factors together and Apple is a fireworks display ready to ignite, which makes it no surprise to see its options building in a move of close to 7 percent post-earnings."


In the previous eight quarters, the average one-day earnings move has been 3.9 percent, according to RiskReversal.com, an options research firm based in New York.


As competition intensifies from Samsung Electronics Co Ltd and others using Google Inc's Android software, investors are wondering if Apple's days of hyper growth are over.


Despite the sharp decline in recent months that cost Apple nearly $190 billion in market capitalization - about equal to the entire value of AT&T - plenty of Apple bulls remain on Wall Street, with about four-fifths of the nearly 60 analysts covering the company rating it "buy" or "strong buy," according to Thomson Reuters data.


The median price target on Wall Street is $745, roughly 50 percent above Apple's current stock price.


Dan Nathan, a co-founder of options research firm RiskReversal.com, expects a bounce in shares after results.


"The sentiment got too negative too fast, and expectations for Q1 and Q2 may be achievable and possibly even too low," he said. Nathan said the stock could rebound to about $550 before running into problems, if Apple can "beat and dispel most of the rumors about either iPhone demand or production issues in the quarter, and guide in-line or a tad higher than Wall Street consensus."


Hedge fund manager David Einhorn said in a letter to investors he bought back shares in Apple.


The shares are trading at 9.8 times estimated forward 12-month earnings, a level that analysts say is unusually inexpensive for a company with its growth profile.


But some were more cautious, given the loss of momentum in the stock that had helped it hit records in September and drive the S&P's rally through the summer.


"While there is a bulk of activity in calls way out-of-the-money in prices like $520 and $550, there is also a lot of buying of the at-the-money puts at around $500," suggesting that the put buyers who are most likely to be Apple stock owners are hedging against an immediate downside risk, said JJ Kinahan, chief derivatives strategist at TD Ameritrade.


Feighery noted that February weekly $510 strike calls expiring on the week of February 22 are cheaper than their equivalent puts, suggesting concerns about whether Apple can "bounce back short-term with conviction and maintain its gains."


Analysts, on average, estimate Apple's fiscal first-quarter earnings per share of $13.41, down slightly from $13.87 in the year-earlier quarter. Revenue is seen up 18 percent at $54.7 billion, according to Thomson Reuters I/B/E/S.


Wall Street estimates Apple sold between 47.5 million and 53 million iPhones, up considerably from the 26.9 million sold in the previous quarter, when the iPhone 5 had not yet made it to all markets. IPad sales are expected at 23 million to 25 million.


The company is expected to continue to post double-digit revenue growth into at least 2015 and a Thomson Reuters StarMine analysis of its expected growth over the next decade puts the stock's intrinsic value at about $708 a share.


(Reporting by Angela Moon in New York and Doris Frankel in Chicago; editing by David Gregorio and Nick Zieminski)



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NCAA announces problems with Miami investigation


CORAL GABLES, Fla. (AP) — The NCAA has found what it calls "a very severe case of improper conduct" committed by former members of its own enforcement program during the Miami investigation, and will not deliver the long-awaited notice of allegations against the Hurricanes until an external review is completed.


NCAA President Mark Emmert announced the findings Wednesday. The sports governing body said former enforcement staff members worked with the criminal defense attorney for former Miami booster and convicted Ponzi scheme architect Nevin Shapiro "to improperly obtain information ... through a bankruptcy proceeding that did not involve the NCAA."


The NCAA did not name the attorney involved. Shapiro has been represented by Maria Elena Perez, a Miami graduate. Perez did not immediately return a request for comment from The Associated Press on Wednesday.


One key person in the investigation has been former Miami equipment-room staffer Sean Allen, who was deposed by Perez as part of Shapiro's bankruptcy proceedings. If the NCAA found that it could not use the information gleaned in that particular deposition, that would figure to be a major victory for the Hurricanes.


Miami had no immediate comment.


"I have been vocal in the past regarding the need for integrity by NCAA member schools, athletics administrators, coaches, and student-athletes," Emmert said. "That same commitment to integrity applies to all of us in the NCAA national office."


The Hurricanes' athletic compliance practices have been probed by the NCAA for nearly two years. Allegations of wrongdoing involving Miami's football and men's basketball programs became widely known in August 2011 when Yahoo Sports published accusations brought by Shapiro, who is serving a 20-year term in federal prison for masterminding a $930 million Ponzi scheme.


This would figure to be another significant issue for the NCAA and its enforcement department. Among the others pending:


— A California case filed by former Southern Cal assistant football coach Todd McNair, who said the NCAA was "malicious" in its investigation into his role in the benefits scandal surrounding Heisman Trophy winner Reggie Bush. Los Angeles Superior Court Judge Frederick Shaller said he was convinced the actions of NCAA investigators were "over the top."


— Earlier this month, the NCAA was sued by Pennsylvania Gov. Thomas W. Corbett, who claimed the sports governing body overstepped its authority and "piled on" when it penalized Penn State for the Jerry Sandusky scandal last summer. The governor asked a federal judge to throw out the sanctions, arguing that the measures — which include a four-year bowl ban and $60 million fine — have harmed students, business owners and others who had nothing to do with Sandusky's crimes.


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