MF Global customers sue PricewaterhouseCoopers in amended lawsuit

NEW YORK (Reuters) – Former customers of MF Global Holdings Ltd‘s broker-dealer have added accounting firm PricewaterhouseCoopers LLP as a defendant in a lawsuit stemming from the collapse of the brokerage.

In an amended complaint filed in U.S. District Court in Manhattan on Monday, the customers of MF Global Inc accused PwC of failing to adequately audit MF Global’s internal controls over customer funds.

The complaint also repeated prior accusations against former officials at MF Global, including former Chief Executive Jon Corzine, who is accused of violating the Commodity Exchange Act, which restricts the use of customer funds.

Caroline Nolan, a spokeswoman for PwC, said it conducted its last audit of MF Global in March 2011 “in accordance with professional standards.” The audit at the time confirmed that MF Global had maintained its customer accounts in accordance with federal regulations, she said.

“We will defend this lawsuit vigorously,” Nolan said.

The lawsuit also named as a defendant CME Group Inc , the exchange that oversaw MF Global.

Neither a lawyer for Corzine nor spokesperson for CME Group immediately responded to requests for comment on the case.

An estimated $ 1.6 billion in customer funds went missing following MF Global’s collapse. MF Global filed for bankruptcy in October 2011.

Investigations by the U.S. Department of Justice and Commodity Futures Trading Commission are ongoing.

PwC had served as independent auditor of MF Global in 2010 and 2011, according to the complaint.

The lawsuit, which is seeking class action status, contends that PwC failed to examine MF Global’s controls over customer funds. This amounted to professional malpractice and a breach of the auditors duties to the company and customers, the lawsuit said.

“If PwC had properly executed its duties and evaluated and reported on ‘s control problems in March 2011, there would have been ample time for management to institute proper controls over customer funds,” the complaint said.

Lawyers for the plaintiffs are cooperating with James Giddens, the trustee for the liquidation of MF Global Inc. Under the deal, the plaintiffs’ lawyers say Giddens has assigned to them certain claims against MF Global’s directors and officers and PwC.

The case is DeAngelis et al v. Corzine et al, U.S. District Court, Southern District of New York, No. 11-07866.

(Reporting by Nate Raymond in New York; Editing by Dan Grebler)

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Methane warnings ignored before NZ mine disaster

WELLINGTON, New Zealand (AP) — A New Zealand coal mining company ignored 21 warnings that methane gas had accumulated to explosive levels before an underground explosion killed 29 workers two years ago, an investigation concluded.

The official report released Monday after 11 weeks of hearings on the disaster found broad safety problems in New Zealand workplaces and said the Pike River Coal company was exposing miners to unacceptable risks as it strove to meet financial targets.

“The company completely and utterly failed to protect its workers,” New Zealand Prime Minister John Key said Monday.

The country’s labor minister, Kate Wilkinson, resigned from her labor portfolio after the report’s release, saying she felt it was the honorable thing to do after the tragedy occurred on her watch. She plans to retain her remaining government responsibilities.

The Royal Commission report said New Zealand has a poor workplace safety record and its regulators failed to provide adequate oversight before the explosion.

At the time of the disaster, New Zealand had just two mine inspectors who were unable to keep up with their workload, the report said. Pike River was able to obtain a permit with no scrutiny of its initial health and safety plans and little ongoing scrutiny.

Key said he agrees with the report’s conclusion that there needs to be a philosophical shift in New Zealand from believing that companies are acting in the best interests of workers to a more proscriptive set of regulations that forces companies to do the right thing.

The commission’s report recommended a new agency be formed to focus solely on workplace health and safety problems. It also recommended a raft of measures to strengthen mine oversight.

Key said his government would consider the recommendations and hoped to implement most of them. He would not commit on forming a new agency. Workplace safety issues are currently one of the responsibilities of the Ministry of Business, Innovation and Employment.

In the seven weeks before the explosion, the Pike River company received 21 warnings from mine workers that methane gas had built up to explosive levels below ground and another 27 warnings of dangerous levels, the report said. The warnings continued right up until the morning of the deadly explosion.

The company used unconventional methods to get rid of methane, the report said. Some workers even rigged their machines to bypass the methane sensors after the machines kept automatically shutting down — something they were designed to do when methane levels got too high.

The company made a “major error” by placing a ventilation fan underground instead of on the surface, the report found. The fan failed after the first of several explosions, effectively shutting down the entire ventilation system. The company was also using water jets to cut the coal face, a highly specialized technique than can release large amounts of methane.

The report did not definitively conclude what sparked the explosion itself, although it noted that a pump was switched on immediately before the explosion, raising the possibility it was triggered by an electrical arc.

The now-bankrupt Pike River Coal company is not defending itself against charges it committed nine labor violations related to the disaster. Former chief executive Peter Whittall has pleaded not guilty to 12 violations and his lawyers say he is being scapegoated.

An Australian contractor was fined last month for three safety violations after its methane detector was found to be faulty at the time of the explosion.

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Staples to have Amazon lockers in U.S. stores: spokeswoman

NEW YORK (Reuters) – Staples Inc, the largest U.S. office supply retailer, has agreed to install “Amazon Lockers” in its U.S. stores, a Staples spokeswoman said on Monday.

The Amazon lockers at Staples will allow online shoppers to have packages sent to the office supply chain’s stores. Amazon already has such storage units at grocery, convenience and drug stores, many of which stay open around the clock.

Amazon.Com Inc, the world’s largest Internet retailer, is trying to let customers avoid having to wait for ordered packages due to a missed delivery.

With the service, Amazon sends customers an email with a pickup code, which is entered on a touchscreen to open the locker containing the package. Shoppers have three days from the delivery date to pick up the package.

The online giant pays a small fee to the owners of the stores that house its lockers.

Staples did not give any further details of the service.

(Reporting by Dhanya Skariachan; Editing by Dan Grebler)

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“Wreck-It Ralph” hammers box office, sails over “Flight”

LOS ANGELES (Reuters) – “Wreck-It Ralph,” Disney‘s animated film about a videogame character who destroys everything in his path, scored the highest-grossing opening weekend in Disney animation history with $ 49.1 million, as box office attendance picked up in the aftermath of superstorm Sandy.

The tally for “Wreck-It Ralph,” which features the voices of John C. Reilly and Jane Lynch, hammered the Denzel Washington film “Flight,” which generated ticket sales of $ 25 million at U.S. and Canadian theaters, according to studio estimates on Sunday.

After a quiet box office last weekend with the U.S. East Coast preparing for superstorm Sandy, there was a jump in movie attendance this week in areas hit by the storm.

Dave Hollis, executive vice president of film distribution at Walt Disney Studios, told Reuters that movie attendance in affected areas was “very healthy,” boosted by school closures on Friday, which saw a bounce in matinee showings.

“In a nice way, ‘Wreck-It Ralph,’ in areas affected by the storm, ended up actually becoming an opportunity to relieve yourself from the reality that might be going on around you, we saw the theater business around areas affected by the storm very healthy,” Hollis said.

“The storm and its impact – I don’t know if it was a function of cabin fever or just escaping by getting into a movie theater, but there was definitely a gravitating-towards-the- theater phenomenon.”

Disney had developed “Wreck-It Ralph” for more than a decade and spent an estimated $ 165 million to produce the film, which featured cameo appearances by a Pac-Man ghost and Mentos candy.

The film was produced by the same team behind Disney‘s animated film “Tangled,” which earned the previous highest opening weekend gross with $ 48.8 million in 2010. “Wreck-It Ralph” was forecast to generate sales in the mid-$ 40 million range, according to Paul Dergarabedian, president of the box office division of Hollywood.com.

New release “Flight,” in which Washington stars as an airline captain who saves his plane from crashing but is accused of drinking before the flight, beat industry analysts’ $ 13 million forecast. The film, produced by Viacom’s Paramount Pictures unit, was made on a $ 31 million budget.

STORM BOOST

Unlike “Wreck-It Ralph,” “Flight” did not experience the same benefit from school closures in parts of the East Coast, according to Don Harris, president of distribution at Paramount Pictures.

“The Disney movie would benefit from school being out in a large number of big urban and suburban eastern markets, they were always going to have a very good opening, I think they got a little help on Friday,” Harris told Reuters.

He also said that the target adult audience for “Flight” would have probably been occupied with Tuesday’s presidential election and being “more active in helping people in their neighborhood” in the aftermath of Sandy, and not necessarily attending theaters this weekend.

“We did about what we expected to do but we certainly didn’t get a bump. I don’t think it hurt us very much either,” Harris said.

Critically acclaimed Iran hostage thriller “Argo,” last week’s box office leader, came in third this weekend after generating $ 10.2 million in sales.

Directed by and starring Ben Affleck, “Argo,” produced by Warner Bros. and GK Films for $ 44 million, is based on the true story of a mission to rescue U.S. government employees held hostage in Iran in 1979. It has totaled $ 75.9 million in three weeks at movie theaters and earned Oscar buzz after stellar reviews from critics.

New release “The Man With The Iron Fists” was unable to beat “Argo’s” momentum this weekend and came in fourth with ticket sales of $ 8.2 million.

Starring Russell Crowe and hip hop artist RZA, the film, produced on a budget of $ 15 million, follows a blacksmith in 19th-century China trying to defend his village from warriors and assassins searching for gold.

In fifth place, “Taken 2,” an action-thriller starring Liam Neeson as a former spy who is kidnapped in Istanbul, earned $ 6 million this weekend. It has generated a total of $ 125.7 million at the U.S. and Canadian box office since its release last month.

Overseas, the new James Bond film, “Skyfall,” enjoyed a stellar second weekend, earning $ 156 million in ticket sales at the international box office. The film will be released in North American theaters on November 9.

Walt Disney Co released “Wreck-It Ralph.” “Flight” was distributed by Paramount Pictures, a unit of Viacom Inc. Warner Bros., a division of Time Warner Inc, distributed “Argo.” Universal Studios released “Man with the Iron Fists.” “Taken 2″ was released by 20th Century Fox, a unit of News Corp.

(Reporting By Piya Sinha-Roy and Ronald Grover; Editing by Eric Beech)

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Drugmakers offer to cap Greece’s medicines bill

LONDON (Reuters) – International drug companies have offered to cap the total amount the Greek government has to pay for its medicines in a bid to resolve a crisis that is jeopardizing both the supply of drugs to patients and drugmakers’ profits.

The proposal was set out by the trade group the European Federation of Pharmaceutical Industries and Associations (Efpia) in a letter to the Greek ministers of health and finance, a copy of which was seen by Reuters.

In exchange for a ceiling on outpatient pharmaceutical expenditure of 2.88 billion euros ($ 3.70 billion) in 2012, Efpia wants the government to commit to pay off all outstanding debts and promise not to allow further arrears to build up.

Under the plan, individual drug companies would be subject to a “clawback” if the cost ceiling is breached, based on their share of the Greek market.

The move follows growing concerns about the situation in Greece, where the government last month took the highly unusual step of suspending all drug exports from the country in an attempt to prevent shortages.

Richard Bergstrom, Efpia’s director general, said the industry’s offer to Greece reflected a new realism among major drug manufacturers, who have seen sales and profits eroded by steep price cuts and unpaid bills in austerity-hit Europe.

“Setting a growth cap or budget ceiling is not something we have ever liked to do in the past, but in the current environment it is better to do that and have some stability,” he said in a telephone interview.

Other pharmaceutical stability agreements have already been agreed in Portugal, Ireland and Belgium, and the model could be extended to other states in future.

“We’ve suggested this to a number of other governments as an approach to deal with the financial crisis,” Bergstrom said.

Both European and U.S.-based drugmakers have been hit by the worsening situation in Europe and executives have highlighted the issue as a drag on profits in recent third-quarter financial reports.

Andrew Witty, the chief executive of Britain’s biggest drugmaker GlaxoSmithKline , told reporters last week it was “not reasonable” for governments to think they could continue to squeeze the industry without serious knock-on effects.

In the latest sign of how the crisis is affecting the provision of healthcare services, German pharmaceuticals firm Merck KGaA said on Saturday it was no longer delivering its cancer drug Erbitux to Greek hospitals.

Another German company, Biotest , which makes products from blood plasma, was the first drugmaker to stop shipments to Greece because of unpaid bills in June.

($ 1 = 0.7785 euros)

(Reporting by Ben Hirschler; Editing by Chizu Nomiyama)

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About That Gold Stored in Flood-Prone Lower Manhattan

As New York City continues to dry out in the aftermath of Hurricane Sandy, the financial world is reconsidering just how smart it is to place critical pieces of infrastructure in flood-prone areas. Citigroup’s (C) waterlogged building at 111 Wall St. will be unusable for several weeks, and two critical Verizon Communications (VZ) facilities suffered extensive flooding during the storm.

At least the material at those sites is replaceable. What about the nearly 15 million pounds of gold bricks stored at the New York Fed?

They’re safe—and will be, in theory, should floodwaters return. The bullion is so heavy that its vault sits 80 feet below street level, and 50 feet below sea level, on the bedrock beneath Manhattan. Though the bank’s fortress-like building is located far downtown, close to where other financial institutions sustained water damage, the property at 33 Liberty St. sits in the city’s evacuation zone C, where residents are told to expect storm-surge flooding only from major, category 3 or 4 hurricanes that hit the New York harbor.

The New York Fed is tight-lipped about how it secures the planet’s largest concentration of gold, referring questions on the subject to a brochure (PDF) published on its website. The pamphlet claims that the vault is protected by an “airtight and watertight seal” created by lowering a 90-ton steel cylinder just three-eighths of an inch into a 140-ton steel-and-concrete frame—an effect “similar to pushing a cork down into a bottle.” Other security measures include closed-circuit video feeds, firearms training for guards, and the weight of the gold itself. At 27 pounds per bar, it’s hard to smuggle one out in a pocket. “The Bank’s security arrangements are so trusted by depositors that few have ever asked to examine their gold,” the New York Fed writes.

That, obviously, has helped fuel a string of conspiracy theories—the gold isn’t really there, isn’t really gold, or is otherwise suspect. The Los Angeles Times reported in August that the federal government was conducting its first-ever audit of the bullion it stores beneath Liberty Street, drilling tiny holes into selected ingots and analyzing the metal.

Ordinarily, you’d be able to eye the gold bars yourself. Some 25,000 visitors tour the bank’s vault each year. Those visits, the bank says, have been canceled indefinitely “due to the aftermath of Hurricane Sandy.”

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Newspaper discloses new Cameron text messages

LONDON (AP) — A British lawmaker says he’s asked the country’s media ethics inquiry to consider newly disclosed text messages sent between Prime Minister David Cameron and Rebekah Brooks, the ex-chief executive of Rupert Murdoch‘s British newspaper division.

The Mail on Sunday newspaper on Sunday published two previously undisclosed messages exchanged between the pair, who are friends and neighbors.

Brooks is facing trial on conspiracy charges linked to Britain’s phone hacking scandal, which saw Murdoch close down The News of The World tabloid.

In one newly disclosed message, Cameron thanked Brooks in 2009 for allowing him to borrow a horse, joking it was “fast, unpredictable and hard to control but fun.”

Opposition lawmaker Chris Bryant has asked a judge-led inquiry scrutinizing ties between the press and the powerful to examine the messages.

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Mosaic by Mixbook tops iOS Apps of the Week

Mosaic by Mixbook is an app that actually results in its user receiving a real package of photos in the mail. Our other top apps this week are not quite as ambitious, but they’re all interesting in other ways. There’s a big update to a great music discovery app, a new recipe app, a 5K training app and an app for kids to learn about the forest.

With the glut of digital photography apps, it can be easy to forget that photos were once a tangible thing. Mosaic by Mixbook gets us back closer to that time by taking 20 photos you upload into a photo book for $ 20. You can preview the book before you purchase it, so you’ll know exactly what you’re getting before it’s actually assembled. The book arrives just four days later and suddenly your collection of digital photos now has a physical home.

Band of the Day, the app where you can discover one new musical act each day, is back with a major update. Band of the Day now features a “mix tape” feature that’s a lot like those seen in radio station apps. You can listen to a collection of tracks from previous featured bands. There’s also a new related artist tab, so you can see who else sounds like the band you’re currently listening to. Band of the Day now also features an easier-to-find biography and review section for each day’s band, so you can research while you rock out.

The recipes of Yotam Ottolenghi may be a bit pricey, but they’re a bit more advanced than the kind of recipes you’d find in your average food app. Yotam will give you step-by-step, hands free instructions for making things like Shakshuka, Chermoula-marinated whole sea bass with capers, red peppers and preserved lemon and for the sweet-tooth chefs, dark chocolate mousse with baileys and mascarpone cream. The app also has a shopping list that you can add ingredients to as well as a button to label your favorite recipes for quick reference.

Zombies, Run! 5K Training is easily the most interesting training app I have ever seen. The app features not only a professionally designed 8-week training regimen designed to prepare you to run a 5K, but it does so while featuring a narrative audio adventure about a zombie apocalypse. The idea behind the app is that listening to the story will make you want to keep training. There are 25 workouts in the 8-week program and the audio adventure will have you running to find supplies and protect your town from a horde of oncoming zombies.

Now that fall is here and the leaves have left barren tree branches, kids might have more questions than ever about their nearby forests and Scholastic First Discovery: The Forest for iPhone hopefully has the answers. The app lets kids interact with a digital forest. They can learn by tapping on different types of leaves and trees and can even change the seasons in the app to see what the forest looks like in various states. There is also a focus within the app of animals and plants that live in the forest. There is also an iPad version.

Download the Appolicious Android app

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Full house in Toon Town: Oscars get 21 animated submissions

NEW YORK (TheWrap.com) – “Wreck-It Ralph,” “Frankenweenie” and “Hotel Transylvania” are among the 21 animated films submitted for the 2013 Oscars, the Academy announced on Friday.

The record number of submissions all but guarantees that the category will have a full slate of five nominees for only the fourth time in its 11-year existence, but the third time in the last four years. A field of 16 or more eligible films means five nominations; while the Academy’s Short Films and Feature Animation Branch still has to rule on the eligibility of the submitted films, there is little question that at least that many will make the cut.

Last year, 18 films were submitted and only one, “The Smurfs,” was disqualified.

The list includes several of the year’s most successful films at the box office, such as DreamWorks Animation‘s “Madagascar 3: Europe’s Most Wanted” and Fox’s “Ice Age Continental Drift,” as well as critical darlings like “ParaNorman” and “Ralph.”

Disney and Pixar, which have won a combined six trophies, boast a bevy of nominees, including Tim Burton‘s “Frankenweenie,” Pixar’s “Brave” and the new critical favorite “Wreck-It Ralph.”

The small New York-based company GKIDS, which shocked the bigger animation studios by landing a pair of nominations last year, has entered four films in competition: the French-made “The Painting,” “The Rabbi’s Cat” and “Zarafa,” and the Japanese film “From Up on Poppy Hill.”

Also entered: the offbeat and freewheeling “A Liar’s Autobiography: The Untrue Story of Monty Python’s Graham Chapman,” along with several films that had been on the radar of few awards-watchers, “Walter & Tandoori’s Christmas,” “The Mystical Laws” and “Hey Krishna” among them.

Several of the films, such as “Rise of the Guardians,” have yet to make their qualifying runs in Los Angeles.

In 2009, a then-record 20 films competed in the category.

The full list:

“Adventures in Zambezia”

“Brave”

“Delhi Safari”

“Dr. Seuss‘ The Lorax”

“Frankenweenie”

“From Up on Poppy Hill”

“Hey Krishna”

“Hotel Transylvania”

“Ice Age Continental Drift”

“A Liar’s Autobiography: The Untrue Story of Monty Python’s Graham Chapman“

“Madagascar 3: Europe’s Most Wanted”

“The Mystical Laws”

“The Painting”

“ParaNorman”

“The Pirates! Band of Misfits”

“The Rabbi’s Cat”

“Rise of the Guardians”

“Secret of the Wings”

“Walter & Tandoori’s Christmas”

“Wreck-It Ralph”

“Zarafa”

The Academy will announce the nominees January 10. Animated films are eligible for nominations in other categories, though none has ever won Best Picture. “Up” was nominated for Best Picture in 2009 while “Wall-E” earned four nominations beyond the animated category in 2008.

The Oscars will take place February 24 at the Dolby Theater in Hollywood.

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Nurses Who Saved NICU Babies Remember Harrowing Hurricane Night

Nurses at the Neonatal Intensive Care Unit at New York University’s Langone Medical Center have challenging jobs, even in the best of times. Their patients are babies, some weighing as little as 2 pounds, who require constant and careful care as they struggle to stay alive.

On Monday night, as superstorm Sandy bore down on Manhattan, the nurses’ jobs took on a whole new sense of urgency as failing power forced the hospital’s patients, including the NICU nurses’ tiny charges, to evacuate.

“20/20″ recently reunited seven of those nurses: Claudia Roman, Nicola Zanzotta-Tagle, Margot Condon, Sandra Kyong Bradbury, Beth Largey, Annie Irace and Menchu Sanchez. They described how they managed to do their jobs – and save the most vulnerable of lives – under near-impossible circumstances.

On Monday night, as Sandy’s wind and rain buffeted the hospital’s windows, the nurses were preparing for a shift change and the day nurses had begun to brief the night shift nurses. Suddenly, the hospital was plunged into darkness. The respirators and monitors keeping the infants alive all went silent.

For one brief moment, everyone froze. Then the alarms began to ring as backup batteries kicked in. But the coast wasn’t clear – the nurses were soon horrified to learn that the hospital’s generator had failed, and that the East River had risen to start flooding the hospital.

Vanishing America: Jersey Shore Boardwalks Washed Away Watch Video

“Everybody ran to a patient to make sure that the babies were fine,” Nicola Zanzotto-Tagle recalled. “If you had your phone with a flashlight on the phone, you held it right over the baby.”

For now, the four most critical patients – infants that couldn’t breathe on their own – were being supplied oxygen by battery-powered respirators, but the clock was ticking. They had, at most, just four hours before the machines were at risk of failing.

Annie Irache tended to the most critical baby — he had had abdominal surgery just the day before – as an evacuation of 20 NICU babies began.

“[He] was on medications to keep up his blood pressure,” Irache said, “and he also had a cardiac defect, so he was our first baby to go.”

One by one, each tiny infant, swaddled in blankets and a heating pad, cradled by one nurse and surrounded by at least five others, was carried down nine flights of stairs. Security guards and secretaries pitched in, lighting the way with flashlights and cell phones.

The procession moved slowly. As nurses took their careful steps, they carefully squeezed bags of oxygen into the babies’ lungs.

“We literally synchronized our steps going down nine flights,” Zanzotto-Tagle said. “I would say ‘Step, step, step.”

With their adrenaline pumping, the nurses said, it was imperative that they stay focused.

“We’re not usually bagging a baby down a stairwell … n the dark,” said Claudia Roman. “I was most worried about, ‘Let me not trip on this staircase as I’m carrying someone’s precious child, because that would be unforgivable.”

When the medical staff and the 20 babies emerged, a line of ambulances was waiting. A video of Margot Condon cradling a tiny baby as she rode a gurney struck a chord worldwide. But Condon said she had a singular goal.

“I was making sure the tube was in place, that the baby was pink,” she said. “I was not taking my eyes off that baby or that tube.”

Like other nurses, she did not feel panic. Her precious patient helped keep her calm.

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