Naomi Gleit helps keep Facebook growing

The gig: As senior director of Facebook Inc.'s growth, engagement and mobile team, Naomi Gleit helps grow the social network's 1-billion-plus user base.

Facebook employee No. 29: Few people outside Facebook have heard of Gleit, but she's the second-longest-serving Facebook employee, after Facebook founder Mark Zuckerberg. Gleit, 29, talked her way into a job at Facebook on July 18, 2005 — her birthday. She was Facebook's 29th employee, coming on board shortly after the company hit 1 million users and before anyone had an inkling of the colossus it would become.

Dogged spirit: Unlike most other early employees who eventually dispersed to seek new fortunes, Gleit says she has no intention of leaving Facebook. She gets that tenacity from her "tiger mom," a computer programmer who ferried her to ballet, piano, karate and Chinese lessons, and her Jewish father, an immigration lawyer who took her to Hebrew school, she said. "I know it sounds completely irrational, but I had no doubt in 2005 that Facebook would be something incredible in the future," she said.

Rival social networks: Her passion for Facebook began before she was hired, when she was a Stanford undergraduate studying science, technology and society, an interdisciplinary major. She wrote her senior thesis on why Facebook beat out rival college social networking site Club Nexus at Stanford. (Club Nexus was started by Stanford student and Turkish software engineer Orkut Büyükkökten, who went on to create Orkut, Google's first attempt at a social network.) Getting in on the ground floor at Facebook made her feel like she was taking part in something bigger than herself, the same feeling she got volunteering for six months in a refugee camp in Botswana, she said.

Growing with Facebook: Gleit helped Facebook push beyond colleges to high schools and eventually to everyone. In late 2007, when the torrid growth pace temporarily cooled, Zuckerberg tapped a team of five to reignite it and asked Gleit to lead product management. It fell to the growth team to identify the obstacles to the company's momentum. In a company ruled by engineers, Gleit, who never studied programming, earned respect with her analytical approach and intuitive understanding of people. "I always believed that growth was the most important thing, the most important way to impact the company," she said. There are now more than 150 people on the team. "It's been an incredible learning experience," she said. "Each year is different."

That magic moment: Those who work closely with Gleit say part of her success early on was her ability to seize on the "magic moment" that makes users fall in love with Facebook. She made it simpler to sign up, and she helped people find friends as soon as they joined. She also helped Facebook spread quickly to new countries by enlisting users to translate the service into more than 80 languages. Gleit helps her team parachute into new markets and traverse less-familiar languages and cultures. It's something that comes from her own passion to see the world and have new experiences. She has taught on a Navajo reservation and lived in a Buddhist monastery in Thailand.

One billion users: Around noon Sept. 14, Zuckerberg gathered with Gleit and dozens of employees in front of a big screen as the number of Facebook users crossed 1 billion. "The scale was insane," she said. "But that is not the goal. When Mark talks about his vision for Facebook, he talks about being able to connect everyone in the world to the people that they care about and provide some value for them every single day."

A problem solver: Zuckerberg calls on Gleit for high-profile projects. In May 2010, when Facebook was under siege because of how it was handling users' personal information, he put Gleit in charge of simplifying privacy settings. Last year she worked on a popular feature that lets users subscribe to a News Feed without having to become Facebook friends.

Betting on mobile: Now Gleit is focused on the future: mobile devices and how they can unlock emerging markets. Gleit knew back in 2011 that people would begin to log on to Facebook from mobile devices in greater numbers than from desktops, particularly in the developing world. So she traveled to Tel Aviv to buy Snaptu, which makes software that helps people on low-tech phones access Facebook, and she brought the whole team back to Silicon Valley with her. Now Facebook is surging in popularity on mobile devices in Tokyo and Nairobi, Kenya. "I have always been interested in technology and how it can be used to improve lives," Gleit said.

jessica.guynn@latimes.com

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Boehner's 'fiscal cliff' plan fails

WASHINGTON — House Speaker John A. Boehner abruptly canceled a vote on his Plan B tax proposal late Thursday after failing to find enough GOP support, a stunning political defeat that effectively turned resolution of the year-end budget crisis over to President Obama and the Democrats.

The speaker had spent the last few weeks negotiating one-on-one with the president, establishing himself as the second-most powerful figure in Washington. But with his strategy imploding, Boehner conceded that he would play a lesser role.

"Now it is up to the president," he said, to work with a fellow Democrat, Senate Majority Leader Harry Reid of Nevada, "to avert the fiscal cliff."

The proposal the speaker had hoped to bring to a vote would have prevented a year-end tax increase for all but those earning more than $1 million a year.

But the Ohio Republican said in a statement, "It did not have sufficient support from our members to pass."

The unexpected turn of events caused an immediate reaction on Wall Street, where after-hours investors began to yank money out of U.S. stocks. Futures that track the Standard & Poor's 500 fell 1.5%, and the Dow Jones industrial average dropped 1.6%.

Now, Obama faces a crucial test of his leadership, with little time left to craft a deal.

Obama's most recent offer is likely to be the starting point. He made a substantial concession: raising taxes only on household income above $400,000, rather than the $250,000 threshold he campaigned on for reelection.

As he pursues votes in Congress, the president will need to face down Democrats, particularly the liberal wing that may feel emboldened to demand that a deal be tilted toward their views — perhaps with additional spending on infrastructure or unemployment benefits.

Any compromise will need substantial Democratic support. Although the president needs the speaker to allow legislation to come to a vote in the GOP-controlled House, Boehner emerges in a weakened position and has little leverage to demand further concessions. His Senate counterpart, Mitch McConnell (R-Ky.), will need to decide whether to become a final line of defense against Obama or step aside for a Democratic-led plan.

"The president's main priority is to ensure that taxes don't go up on 98% of Americans and 97% of small businesses in just a few short days," White House Press Secretary Jay Carney said after Boehner canceled the vote. "The president will work with Congress to get this done, and we are hopeful that we will be able to find a bipartisan solution quickly."

Without a compromise, most Americans will see their taxes automatically rise and spending cuts ripple across the economy in the new year. The White House and the speaker had been closing in on a broad deficit-reduction deal to steer around the coming "fiscal cliff," but Boehner suddenly changed course this week to gauge the sentiment of House Republicans.

The support expressed by top Republicans for new taxes has cracked the party's anti-tax orthodoxy and opened the door to a compromise that would have been unthinkable before the November election.

Mindful that his own job as speaker comes up for a vote in two weeks, Boehner must make a difficult choice: whether to allow a plan to come to the House floor without support from his majority, or play a key role in sending the nation over the fiscal cliff and raising taxes on most Americans.

As the speaker and his lieutenants trolled for votes earlier Thursday, buttonholing lawmakers in scenes like those in the movie "Lincoln," Carney dismissed Boehner's Plan B as a "multi-day exercise in futility."

"Instead of taking the opportunity that was presented to them to continue to negotiate what could be a very helpful large deal for the American people, the Republicans in the House have decided to run down an alley that has no exit," he said.

Late in the evening, as the time for voting neared, the House took an unscheduled recess — a sign that the tally had come up short. With Democrats almost unanimously against the bill, Boehner could afford to lose only two dozen Republican defectors.

The speaker and his top lieutenants then convened a late-night meeting of rank-and-file lawmakers and announced they were pulling the bill.

"We don't have the votes," the speaker said, according to a lawmaker in the room.

Conservatives split over Plan B, complicating Boehner's quest. He received a major assist when anti-tax stalwart Grover Norquist's Americans for Tax Reform declared that the bill was a vote for lower taxes and did not violate the pledge most Republicans had signed not to raise taxes. But other leading conservative groups opposed it, including FreedomWorks, which is extremely influential with tea party supporters.

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Facebook tests $1 fee for messages to non-friends

SAN FRANCISCO (AP) — Facebook says it is testing a service that will charge users $ 1 to guarantee that messages they send to people they are not connected to arrive in users’ inboxes, rather than in an often-ignored folder called “other.”

Launched in 2011, the “other” folder is where Facebook routes messages it deems less relevant. Not quite spam, these include messages from people you most likely don’t know, based on Facebook’s reading of your social connections. Many users ignore this folder.

Now, users will be able to pay $ 1 to route their messages to non-friends. Facebook said Thursday that it is testing the service with a small percentage of individuals — not businesses — in the U.S.

“For example, if you want to send a message to someone you heard speak at an event but are not friends with, or if you want to message someone about a job opportunity, you can use this feature to reach their Inbox,” Facebook said in an online post. “For the receiver, this test allows them to hear from people who have an important message to send them.”

The company says charging for messages could help discourage spammers.

In October, Facebook unveiled another feature that lets users pay if they want more people to read their updates. For $ 7, users can promote a post to their friends, just as advertisers do.

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Country singer Tate Stevens wins Fox's 'X Factor'

NEW YORK (AP) — Tate Stevens, who was mentored by music exec L.A. Reid on the second season of "The X Factor," has won the Fox singing competition.

The 37-year-old country singer from Belton, Mo., beat runner-up Carly Rose Sonenclar, a 13-year-old schoolgirl from Westchester, N.Y., and teenage girl group Fifth Harmony on the finale that aired live Thursday night.

Stevens wins a $5 million recording contract.

More than 35 million votes were cast by viewers after Wednesday's performance show.

Besides Reid, judges this season included Demi Lovato, Britney Spears and series creator Simon Cowell.

Thursday's show was also the grand finale for Reid. Earlier this month, he said he wouldn't be returning to "The X Factor" next year. No replacement has been announced.

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Stigma Fading, Marijuana Common in California

Jim Wilson/The New York Times

At a San Francisco concert in 2010, marijuana use was general while signatures were collected for a measure to decriminalize it.

LOS ANGELES — Let Colorado and Washington be the marijuana trailblazers. Let them struggle with the messy details of what it means to actually legalize the drug. Marijuana is, as a practical matter, already legal in much of California.

No matter that its recreational use remains technically against the law. Marijuana has, in many parts of this state, become the equivalent of a beer in a paper bag on the streets of Greenwich Village. It is losing whatever stigma it ever had and still has in many parts of the country, including New York City, where the kind of open marijuana use that is common here would attract the attention of any passing law officer.

“It’s shocking, from my perspective, the number of people that we all know who are recreational marijuana users,” said Gavin Newsom, the lieutenant governor. “These are incredibly upstanding citizens: Leaders in our community, and exceptional people. Increasingly, people are willing to share how they use it and not be ashamed of it.”

Marijuana can be smelled in suburban backyards in neighborhoods from Hollywood to Topanga Canyon as dusk falls — what in other places is known as the cocktail hour — often wafting in from three sides. In some homes in Beverly Hills and San Francisco, it is offered at the start of a dinner party with the customary ease of a host offering a chilled Bombay Sapphire martini.

Lighting up a cigarette (the tobacco kind) can get you booted from many venues in this rigorously antitobacco state. But no one seemed to mind as marijuana smoke filled the air at an outdoor concert at the Hollywood Bowl in September or even in the much more intimate, enclosed atmosphere of the Troubadour in West Hollywood during a Mountain Goats concert last week.

Arnold Schwarzenegger, the former Republican governor, ticked off the acceptance of open marijuana smoking in a list of reasons he thought Venice was such a wonderful place for his morning bicycle rides. With so many people smoking in so many places, he said in an interview this year, there was no reason to light up one’s own joint.

“You just inhale, and you live off everyone else,” said Mr. Schwarzenegger, who as governor signed a law decriminalizing possession of small amounts of marijuana.

Some Californians react disdainfully to anyone from out of state who still harbors illicit associations with the drug. Bill Maher, the television host, was speaking about the prevalence of marijuana smoking at dinner parties hosted by Sue Mengers, a retired Hollywood agent famous for her high-powered gatherings of actors and journalists, in an interview after her death last year. “I used to bring her pot,” he said. “And I wasn’t the only one.”

When a reporter sought to ascertain whether this was an on-the-record conversation, Mr. Maher responded tartly: “Where do you think you are? This is California in the year 2011.”

John Burton, the state Democratic chairman, said he recalled an era when the drug was stigmatized under tough antidrug laws. He called the changes in thinking toward marijuana one of the two most striking shifts in public attitude he had seen in 40 years here (the other was gay rights).

“I can remember when your second conviction of having a single marijuana cigarette would get you two to 20 in San Quentin,” he said.

In a Field Poll of California voters conducted in October 2010, 47 percent of respondents said they had smoked marijuana at least once, and 50 percent said it should be legalized. The poll was taken shortly before Californians voted down, by a narrow margin, an initiative to decriminalize marijuana.

“In a Republican year, the legalization came within two points,” said Chris Lehane, a Democratic consultant who worked on the campaign in favor of the initiative. He said that was evidence of the “fact that the public has evolved on the issue and is ahead of the pols.”

A study by the California Office of Traffic Safety last month found that motorists were more likely to be driving under the influence of marijuana than under the influence of alcohol.

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Hedge fund manager alleges Herbalife is 'pyramid scheme'

Herbalife Ltd. is girding for a fight against a Wall Street money man who's betting $1 billion that the company is nothing more than what he called a "pyramid scheme."

The Los Angeles maker of nutritional products rushed to defend itself Thursday against a hedge fund manager's accusation.

Hedge fund titan Bill Ackman accused Herbalife of paying its sales staff far more money to recruit new distributors than to actually sell its products.

That results in the roughly 2.6 million distributors at the bottom of the sales pyramid making little or no income, while a handful at the top hauls in millions, he said.

"This is the best-managed pyramid scheme in the history of the world," Ackman said.

The company denied the allegation and accused Ackman of trying to manipulate the stock. Herbalife shares slumped 10% on Thursday and are off 21% in the two days since Ackman announced that the company is in his sights.

"Today's presentation was a malicious attack on our business model based largely on outdated, distorted and inaccurate information," Herbalife said in a statement. "We are not an illegal pyramid scheme."

Herbalife, which bills itself as a so-called multilevel marketer, has beaten back similar accusations in the past. But the company has rarely faced a nemesis such as Ackman.

The 46-year-old billionaire has fashioned a career on high-stakes gambits in controversial companies. His fund firm, Pershing Square Capital Management, manages $12 billion.

Showdowns between companies and skeptical investors historically play out behind closed doors, especially in the normally sleepy pre-holiday period.

But in a measure of the aggressive tactics favored by an emerging breed of activist investors, Ackman launched a public blitzkrieg Thursday. He gave a flashy multimedia presentation to a packed conference room in New York that was streamed live on the Internet.

"I've never seen anything quite like it," said Timothy Ramey, an analyst at D.A. Davidson & Co. "I've never seen an investor spend 31/2 hours of time at a major venue being webcast and then make TV appearances to make his point. It's the largest orchestrated bull or bear case that I've ever seen."

The brawl has potential repercussions for both sides.

Ackman claimed to have spent one year doing intensive research on Herbalife's operations, an unusually extended period given Wall Street's thirst for immediate results.

Earlier this year, Ackman began betting that Herbalife's stock would fall sharply.

His fund is "shorting" more than 20 million shares of the company. In a short sale, an investor borrows stock and sells it immediately, hoping to later buy the shares at a reduced price and return them to their actual owner.

Ackman promised to donate all profit from his Herbalife bet to charity, and portrayed his public diatribe as intended for the public good.

"I'm very fortunate to have the means to pursue this," he said. "I am independently wealthy. When I believe in something, I can say what I want and do what is right."

For Herbalife, the fight threatens to damage its credibility among investors who have always been sensitive to claims that its business is illegitimate.

Herbalife, which was founded in 1980, sells a line of diet powders, bars, drinks and vitamins through a network of independent distributors in more than 80 countries. The company reported sales of $3.5 billion in 2011.

Its chief executive, Michael O. Johnson, was the highest paid executive in the United States last year, hauling in more than $89 million in salary, exercised stock options and other compensation, according to GMI Ratings, a corporate governance firm.

The company has fought criticism of its business model throughout its existence.

In 2008, for example, self-proclaimed fraud buster Barry Minkow shorted Herbalife's stock and then accused the company of a host of misdeeds. The company survived those accusations and Minkow ultimately went to prison on unrelated charges.

This was the second time this year that investors punished Herbalife because of questions about its business practices. Herbalife shares fell 20% in May after hedge fund operator David Einhorn asked pointed questions during an earnings call.

"We operate at the highest ethical and quality standards, and our management and our board are constantly reviewing our business practices and products," Herbalife said. "We also hire independent, outside experts to ensure our operations are in full compliance with laws and regulations."

Ackman and Herbalife engaged in a bitter and bizarre war of words, with Johnson saying the United States will "be better when Bill Ackman is gone."

Ackman interpreted the statement as a threat and said he has hired a security firm to protect him.

stuart.pfeifer@latimes.com

walter.hamilton@latimes.com

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$66M Kinkade estate dispute secretly settled

SAN JOSE, Calif. (AP) — Thomas Kinkade's widow and girlfriend have reached a settlement after a dispute over the late artist's $66 million estate, their attorneys said Wednesday.

The San Jose Mercury News reports (http://bit.ly/Wq5kti ) that counsel for Nanette Kinkade and his girlfriend Amy Pinto announced the settlement but wouldn't provide further details, leaving it unclear who will inherit Kinkade's San Francisco Bay area mansion and his warehouse of paintings.

In a statement, they said the women kept Kinkade's message of "love, spirituality and optimism" in their amicable resolution.

The dispute went public after the 54-year-old artist died April 6 from an accidental overdose of alcohol and prescription tranquilizers.

Pinto, who began dating Kinkade six months after his marriage of 28 years imploded, claimed Kinkade wrote two notes bequeathing her his mansion and $10 million to establish a museum of his paintings. Her lawyers filed court papers stating that she and Kinkade had planned to marry as soon as his divorce went through.

Nanette Kinkade disputed those claims and sought full control of the estate. She portrayed Pinto in court papers as a gold-digger who is trying to cheat the artist's rightful heirs.

Kinkade, the self-described "Painter of Light," was known for sentimental scenes of country gardens and pastoral landscapes. His work led to a commercial empire of franchised galleries, reproduced artwork and spin-off products that was said to fetch some $100 million each year in sales.

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The New Old Age Blog: After Storm, 'Friends' Rescue a Caregiver

Tales of Hurricane Sandy survival will likely emerge for years — particularly about the sick and elderly who were trapped in their homes or forced to evacuate under harrowing circumstances. Many of those stories have happy endings, like this one of social media and neighborliness I recently heard.

It is about two ailing 90-year-olds who, because of social media, formal and informal, and the ingenuity of one of their daughters, were located amid the rubble of Long Beach, N.Y., after the storm’s initial fury, and in short order gained admission to one of the few elder care facilities in the region that could meet their divergent needs.

“The pluses of social networking really come into play in a situation like this,’’ said Alice, 66, the couple’s daughter, a social worker for senior services in the office of a New York State senator who found herself almost as flummoxed as a nonprofessional when she needed help for her own parents. “More people are willing to help others than we think, but nobody is going to help if we don’t ask.’’

Alice’s social media search, first to locate her parents and then to find them a new home, began on a Facebook page for missing persons, one of many that sprang up after the storm. Long Beach, one of the hardest-hit areas, had no phones or power and was, for the most part, inaccessible. A Facebook page, Long Beach NY Hurricane Information, was meant to help residents find free hot food, a mobile medical van, somewhere to do laundry, revised school bus routes, lists of open stores, suggestions for good contractors, warning of price-gougers and, increasingly, share tales of recovery.

“I put up a post and sure enough some wonderful man from Brooklyn got back to me,’’ Alice said (we tell Alice’s story using only her first name to protect her parents’ privacy). The man had braved the miles of dark back roads to get to his own mother, who happened to live in the same co-op building as Alice’s parents.

He volunteered to check on the old couple and their home health aide on the third floor. Alice’s father, who has dementia, is incontinent and cannot walk because of a neurological condition, and her mother, who is deaf, suffers from depression, but by comparison is the “well spouse.’’

Their personal belongings were not destroyed, although her mother’s medical records were lost when her doctor’s office was damaged. But the old building would be uninhabitable for an indeterminate time, surely too long for a pair of 90-year-olds to ever return. Still, the information that they were O.K., coming from a total stranger, “provided a night of sleep I otherwise never would have had,’’ Alice said.

The next morning, she and her younger sister, Sharon, were able to get to Long Beach and tell their mother that the evacuation would be permanent. They brought the couple to Alice’s home in Queens for a few days, then to a nearby hotel and finally to a borrowed apartment in a neighboring building.

“It is so painful for them to be uprooted all of a sudden, at this age,’’ Alice said. “But in a way this may be one of those blessings in disguise. The way they were living, it was only after we actually had them with us that we realized my mother’s description of how things were going were not exactly accurate.’’

This is the case with many elderly parents, getting by in their own apartment and putting the best face on it lest their children tell them it is time to leave. So in the short window before she and her husband left for Chicago, and Thanksgiving with their own children and grandchildren, Alice had to set in motion the next step.

Her sister and brother-in-law on Long Island would keep an eye on the old couple in the short term. But the long-term solution, Alice said, with the clear-eyes that came from seeing others in this situation day-after-day, was a senior community where her father could live in the skilled nursing section and her mother in the less restrictive assisted living area. They would see each other as often as they wished, but each would get the correct level of care.

So before leaving for Chicago, using a more informal kind of social media, Alice e-mailed 40 friends — from her synagogue, her social work circle, her Rolodex of elder care lawyers and Medicare advocates. The e-blast was a plea for help.

“Each of you on this email know me personally,’’ she wrote. “As you all know, many years of my professional life have been dedicated to helping seniors . . . . Now I find myself in the position of needing help for my mom and dad.’’ She told them the story of her parents evacuation and how “exhausted and completely stressed’’ she and her sister and both of their husbands were. Now her “biggest hurdle was to find a place that can accommodate each of their needs.’’

She essentially asked this group to put on their thinking caps, and they did. Alice and her husband left for the holiday on a Monday. That Wednesday, the day before Thanksgiving, she got a phone call from an admissions person from exactly the kind of facility she needed, who had been contacted by her friends. Alice was told what kind of records she would need for their application. A plan was made to reconvene by telephone the Monday after Thanksgiving.

On Friday, Nov. 30, Alice and her sister toured the place. In that same blur of a week, the sisters took turns going to Long Beach to deal with their parents’ possessions. Alice’s mother slowly moved from reconciled to relieved. When it was time to tell Alice’s father “he went from sad and crying to angry at my sister and I for not being able to take them to live with either of us.’’

Through it all, Alice kept her e-mail committee up to date. She had crowd-sourced one of the hardest problems she would ever face. She had tapped the viral nature of hastily created Facebook pages, where strangers literally “friend’’ each other, and sent e-mail blasts to the kind of friends who take no offense at receiving the same message as a bunch of people they may or may not know.

In the “new old age,” this is one of many ways of doing what nobody really knows how to do. And in all likelihood, with the paperwork almost complete, Alice’s parents will have a new home for Christmas.

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UBS to pay $1.5 billion to settle Libor charges

UBS has agreed to pay a fine of $1.5 billion to authorities and plead guilty to a felony count of wire fraud, the most recent developments in a far-reaching probe into how banks manipulated interest rates leading up to the financial crisis.

Two former traders were also charged with conspiracy in a complaint unsealed Wednesday, the first people charged criminally in the Libor scandal.

"We cannot and we will not tolerate misconduct on Wall Street of the kind admitted to by UBS today and by Barclays last June," said Assistant Atty. Gen. Lanny Breuer, head of the criminal division. In June, Barclays was the first bank to settle with authorities, paying $450 million.

The fine was one of the biggest leveled against a financial institution by American and British authorities, just short of the $1.9-billion fine HSBC agreed to pay last week over money laundering allegations.

The charges relate to the ways traders leaned on banks to manipulate the London interbank offered rate, or Libor, to benefit their own trading positions.

Officials said that from 2006 through 2009 UBS traders placed bets on the movement of Libor and manipulated the rate, which is used as a benchmark to set interest rates for many mortgages, credit cards and other consumer lending instruments. The traders profited by knowing which way the Libor would move.

In coming months, the probe probably will expand to include other banks that help determine the Libor, analysts say. But it's the criminal charges that turned some heads on Wall Street on Wednesday.

The plea agreement on wire fraud charges by a UBS subsidiary in Japan, which included a $100-million fine, marks the first time since 2005 that a major financial institution has pleaded guilty to criminal charges, the Justice Department said.

"For a bank to admit to criminality is kind of mind-blowing," said Peter Shapiro, managing director of Swap Financial Group in South Orange, N.J. "Obviously, they didn't do that easily — that was something that must have been a big priority of enforcement agencies."

Enforcement agencies have been feeling some pressure to level blame on financial institutions in the wake of the financial crisis, Shapiro said. No senior financial executives have served jail time for their roles in the financial crisis.

"Both the regulators and enforcement agencies feel somewhat beleaguered by the repeated assertions that they failed to deliver enough heads on a plate as a response to the financial crisis," he said.

U.S. officials also announced criminal charges against two former senior traders for UBS in connection with the scandal. Tom Alexander William Hayes, 33, of Britain, was charged with conspiracy and wire fraud, and Roger Darin, 41, of Switzerland, was charged with conspiracy. Both remain abroad, but the Justice Department will try to extradite them.

"The motivation here was nothing short of sheer greed, and the scheme was nothing short of a shell game, a Wall Street version of three-card monte," said Kevin Perkins, associate director of the FBI, which helped investigate the case.

More criminal charges at other banks could follow, said Anthony Sabino, professor of law at the Tobin College of Business at St. John's University.

"Once you start to round up some accused bad guys, that leads to more people being rounded up," he said. "This is a vast conspiracy among a multitude of banks, which therefore implicates a multitude of individuals."

Much of the activity took place at UBS Japan Securities Co., where Hayes was a senior trader. The Justice Department released internal UBS messages in which Hayes and others talked about their alleged manipulation.

In one from November 2006, Hayes told a UBS employee who submitted rate information for the Libor that he and Darin "skew the Libors a bit" and then said he needed the six-month rate to stay high for three days.

UBS traders were often colorful and emphatic in their pleadings, according to documents released by Britain's Financial Services Authority. One wrote, "I need you to keep it as low as possible.... If you do that, I'll pay you, you know, $50,000, $100,000, whatever you want."

The UBS fine was larger than that leveled on Barclays earlier in the year because UBS' misconduct was "considerably more serious than Barclays' because it was more widespread within the firm," the Financial Services Authority said. At least 45 individuals at UBS were involved in or aware of the rate-fixing practice.

UBS said that it had fully cooperated with authorities and that the interest-rate manipulations were the isolated actions of certain employees.

"Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee," UBS CEO Sergio Ermotti said in a statement.

Analysts say that there's still potential for significant civil suits against UBS and other banks, which could be more damaging than the fines levied against them. Keefe, Bruyette & Woods, an equity research firm, estimated in July that potential industry damages could reach $35 billion.

Those estimates were validated Wednesday when the Inspector General for the Federal Housing Finance Agency estimated that government-owned Fannie Mae and Freddie Mac may have lost a combined $3 billion because of reduced interest payments on securities and other holdings. Officials at FHFA, which regulates Fannie and Freddie, have not confirmed the estimate but are evaluating potential issues involved with the Libor manipulation.

There are barriers to further lawsuits — the burden of proof will be high, analysts at Keefe, Bruyette & Woods said. To move forward with civil suits, plaintiffs would have to prove that traders were conspiring, said John C. Coffee, a Columbia Law School expert in corporate fraud.

"But that said, the size of the potential liability is mushrooming," he said.

Times reporter E. Scott Reckard contributed to this report. Semuels reported from Los Angeles and Puzzanghera from Washington.

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Gun lobby's grip on Congress threatened

WASHINGTON — The gun-control debate sharpened Tuesday as President Obama backed an effort to revive the assault weapons ban spearheaded by California Sen. Dianne Feinstein, who is poised to have a powerful new role as the head of the Senate committee overseeing gun laws.

Calls for federal gun restrictions were mounting following last week's shooting at an elementary school in Newtown, Conn. — even from lawmakers who had rejected them in the past. The National Rifle Assn. and its allies have successfully kept such efforts at bay for years, but the slayings of 20 children have roiled the politics of gun control and now challenge the gun lobby's hold on Capitol Hill.

The NRA broke its four-day silence Tuesday, saying it "is prepared to offer meaningful contributions to help make sure this never happens again," but offered no details. The group plans to hold a news conference Friday.

The gun lobby faces a newly empowered opponent in Feinstein, a Democrat, who is in line to succeed Sen. Patrick J. Leahy (D-Vt.) as chairwoman of the Senate Judiciary Committee, with the power to call hearings and move new legislation.

Feinstein said Tuesday that on the first day of the next Congress she would introduce an updated version of the expired assault weapons ban that she helped pass in 1994. As drafted, the measure would ban the Bushmaster .223 rifle that Adam Lanza used in the Newtown slayings, which also left six school employees dead.

"This is an uphill climb," she said. "Sure, it's tough, but that doesn't mean we shouldn't try."

The issue is personal for Feinstein, who became mayor of San Francisco in 1978 after then-Mayor George Moscone and Supervisor Harvey Milk were shot to death at City Hall. A pen President Clinton used to sign the assault weapons ban hangs prominently in her Capitol Hill office.

Feinstein has the backing of Obama, who vowed Sunday in Newtown to harness the power of his office to try to prevent future massacres.

The president put little effort into gun legislation during his first four years in the White House, despite several mass shootings — including one in Tucson that left six people dead and 13 wounded. Then-Rep. Gabrielle Giffords, an Arizona Democrat, was shot in the head and nearly killed.

On Tuesday, spokesman Jay Carney said that Obama was "actively supportive" of Feinstein's effort to reinstate the assault weapons ban, which expired in 2004, and that he would back support legislation to tighten sales at gun shows.

An NRA spokesman declined to comment on the calls for gun control. But the group released a statement saying it was "shocked, saddened and heartbroken by the news of the horrific and senseless murders in Newtown."

"Out of respect for the families, and as a matter of common decency, we have given time for mourning, prayer and a full investigation of the facts before commenting," the statement continued.

The gun lobby's influence is renowned: It easily swept back efforts to toughen federal gun laws after the 2011 mass shooting in Tucson, as well as the July movie theater massacre in Aurora, Colo., that left 12 dead and dozens wounded. Much of the NRA's power stems from its relentless lobbying and an increasingly polarized House, which is controlled by the group's Republican allies.

Few doubt the NRA will wield substantial influence in the debate, joined by even more vociferous groups, such as Gun Owners of America, which sees the NRA as too willing to compromise.

Michael Hammond, legislative counsel for Gun Owners of America, said his group wouldn't retreat an inch from its opposition to restrictions, including a ban on high-capacity magazines like those used in Newtown.

"I think it's a horrible idea," he said, saying such magazines are valuable in self-defense. Lanza used magazines that held 30 rounds each.

Hammond noted that gun-rights supporters have faced hostile political environments in the past. After the 1999 shootings at Columbine High School that left 12 students, a teacher and two gunmen dead, he said, "things looked very bleak for the 2nd Amendment community." Despite the increase in public support for gun control at the time, his group and others turned back efforts to tighten gun laws.

Still, both allies and opponents say the gun lobby faces a much steeper fight this time. Those calling for tougher gun laws include longtime NRA allies, such as Sen. Joe Manchin III (D-W.Va.), who met Tuesday with Feinstein and spoke with Obama by phone.

Susan Ginsburg, who coordinated firearms policy at the Treasury Department during the Clinton administration, says she believes the Newtown massacre will lead to new gun restrictions.

"I don't think this is going to fade back into invisibility again," she said. "We seem to have turned a corner in which it's just not acceptable for children to be killed like that."

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