The Hard Road Back: Prosthetic Arms a Complex Test for Amputees

A Future Reset:
After losing his arm in an I.E.D. explosion in Afghanistan, Cpl. Sebastian Gallegos has adjusted to his prosthetic limb.

SAN ANTONIO — After the explosion, Cpl. Sebastian Gallegos awoke to see the October sun glinting through the water, an image so lovely he thought he was dreaming. Then something caught his eye, yanking him back to grim awareness: an arm, bobbing near the surface, a black hair tie wrapped around its wrist.

The elastic tie was a memento of his wife, a dime-store amulet that he wore on every patrol in Afghanistan. Now, from the depths of his mental fog, he watched it float by like driftwood on a lazy current, attached to an arm that was no longer quite attached to him.

He had been blown up, and was drowning at the bottom of an irrigation ditch.

Two years later, the corporal finds himself tethered to a different kind of limb, a $110,000 robotic device with an electronic motor and sensors able to read signals from his brain. He is in the office of his occupational therapist, lifting and lowering a sponge while monitoring a computer screen as it tracks nerve signals in his shoulder.

Close hand, raise elbow, he says to himself. The mechanical arm rises, but the claw-like hand opens, dropping the sponge. Try again, the therapist instructs. Same result. Again. Tiny gears whir, and his brow wrinkles with the mental effort. The elbow rises, and this time the hand remains closed. He breathes.

Success.

“As a baby, you can hold onto a finger,” the corporal said. “I have to relearn.”

It is no small task. Of the more than 1,570 American service members who have had arms, legs, feet or hands amputated because of injuries in Afghanistan or Iraq, fewer than 280 have lost upper limbs. Their struggles to use prosthetic limbs are in many ways far greater than for their lower-limb brethren.

Among orthopedists, there is a saying: legs may be stronger, but arms and hands are smarter. With myriad bones, joints and ranges of motion, the upper limbs are among the body’s most complex tools. Replicating their actions with robotic arms can be excruciatingly difficult, requiring amputees to understand the distinct muscle contractions involved in movements they once did without thinking.

To bend the elbow, for instance, requires thinking about contracting a biceps, though the muscle no longer exists. But the thought still sends a nerve signal that can tell a prosthetic arm to flex. Every action, from grabbing a cup to turning the pages of a book, requires some such exercise in the brain.

“There are a lot of mental gymnastics with upper limb prostheses,” said Lisa Smurr Walters, an occupational therapist who works with Corporal Gallegos at the Center for the Intrepid at Brooke Army Medical Center in San Antonio.

The complexity of the upper limbs, though, is just part of the problem. While prosthetic leg technology has advanced rapidly in the past decade, prosthetic arms have been slow to catch up. Many amputees still use body-powered hooks. And the most common electronic arms, pioneered by the Soviet Union in the 1950s, have improved with lighter materials and microprocessors but are still difficult to control.

Upper limb amputees must also cope with the critical loss of sensation. Touch — the ability to differentiate baby skin from sandpaper or to calibrate between gripping a hammer and clasping a hand — no longer exists.

For all those reasons, nearly half of upper limb amputees choose not to use prostheses, functioning instead with one good arm. By contrast, almost all lower limb amputees use prosthetic legs.

But Corporal Gallegos, 23, is part of a small vanguard of military amputees who are benefiting from new advances in upper limb technology. Earlier this year, he received a pioneering surgery known as targeted muscle reinnervation that amplifies the tiny nerve signals that control the arm. In effect, the surgery creates additional “sockets” into which electrodes from a prosthetic limb can connect.

More sockets reading stronger signals will make controlling his prosthesis more intuitive, said Dr. Todd Kuiken of the Rehabilitation Institute of Chicago, who developed the procedure. Rather than having to think about contracting both the triceps and biceps just to make a fist, the corporal will be able to simply think, close hand, and the proper nerves should fire automatically.

In the coming years, new technology will allow amputees to feel with their prostheses or use pattern-recognition software to move their devices even more intuitively, Dr. Kuiken said. And a new arm under development by the Pentagon, the DEKA Arm, is far more dexterous than any currently available.

But for Corporal Gallegos, becoming proficient on his prosthesis after reinnervation surgery remains a challenge, likely to take months more of tedious practice. For that reason, only the most motivated amputees — super users, they are called — are allowed to undergo the surgery.

Corporal Gallegos was not always that person.

His father, an Army veteran, did not want him to join the infantry, but it was like him to ignore the advice.

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Anti-Morsi Protesters Gather on Cairo Streets

CAIRO — Demonstrators began flowing into the streets of Cairo on Tuesday for a day of protest against President Mohamed Morsi’s effort to assert broad new powers, dismissing his efforts only hours before to reaffirm his deference to Egyptian law and courts.  

Hundreds of protesters gathered outside the headquarters of the lawyers’ trade group as others milled around a small tent city erected in Tahrir Square, both groups echoing the chants of the uprising that ousted President Hosni Mubarak almost two years ago.

“Leave, leave!” they chanted, referring to Mr. Morsi. “Bring down the regime.”

A few blocks away, in a square near both the American Embassy and the Interior Ministry, groups of young men resumed a nine-day-old battle with riot police, responding to tear gas canisters with rocks.

Although the clashes grew out of anger over the deaths of dozens of protesters in similar clashes one year ago, the rowdy and often apolitical combatants have adopted the banner of protest against Mr. Morsi as well.

Larger crowds were expected in the evening as marches from around the city headed for Tahrir Square — the focal point of Egyptian protests — at the end of the working day.

Many schools and other businesses had closed in anticipation of violence in the streets.

The Muslim Brotherhood, the Islamist group allied with Mr. Morsi, called off a rival protest, saying it sought to avert violence between the groups. And the leader of Al Azhar, the center of Sunni Muslim learning that is regarded as the pre-eminent moral authority here, met with groups of political leaders in an effort to resolve the battle over the president’s decree and the deadlock in the constitutional assembly that has snarled Egypt’s political transition 22 months after Mr. Mubarak’s ouster.

On Monday, with public pressure mounting, Mr. Morsi appeared to pull back from his effort to assert an authority beyond the reach of any court.

After Mr. Morsi met for hours with the judges of Egypt’s Supreme Judicial Council, his spokesman read an “explanation” on television that appeared to backtrack from a presidential decree placing Mr. Morsi’s official edicts above judicial scrutiny — even while saying the president had not actually changed a word of the statement.

Though details of the talks remained hazy, and it was not clear whether the opposition or the court would accept his position, Mr. Morsi’s gesture was another demonstration that Egyptians would no longer allow their rulers to operate above the law. But there appeared little chance that the gesture alone would be enough to quell the crisis set off by his perceived power grab.

The presidential spokesman, Yasser Ali, said for the first time that Mr. Morsi had sought only to assert pre-existing powers already approved by the courts under previous precedents, not to free himself from judicial oversight.

He said that the president meant all along to follow an established Egyptian legal doctrine suspending judicial scrutiny of presidential “acts of sovereignty” that work “to protect the main institutions of the state.” The judicial council had said Sunday that it could bless aspects of the decree deemed to qualify under the doctrine.

Mr. Morsi had maintained from the start that his purpose was to empower himself to prevent judges appointed by Mr. Mubarak from dissolving the constituent assembly, which is led by his fellow Islamists of the Muslim Brotherhood’s Freedom and Justice Party. The courts have already dissolved the Islamist-led Parliament and an earlier constituent assembly, and the Supreme Constitutional Court was widely expected to rule against this one next week.

But the text of the original decree had exempted all presidential edicts from judicial review until the ratification of a constitution, not just those edicts related to the assembly or justified as “acts of sovereignty.”

Legal experts said that the spokesman’s explanations of the president’s intentions, if put into effect, would amount to a revision of the decree Mr. Morsi issued on Thursday. But lawyers said that the verbal statements alone carried little legal weight.

How the courts would apply the doctrine remained hard to predict. And Mr. Morsi’s opposition indicated it was holding out for far greater concessions, including the breakup of the whole constituent assembly.

Speaking at a news conference Monday while Mr. Morsi was meeting with the judges, the opposition activist and intellectual Abdel Haleem Qandeil called for “a long-term battle,” declaring that withdrawal of Mr. Morsi’s new powers was only the first step toward the opposition’s goal of “the withdrawal of the legitimacy of Morsi’s presence in the presidential palace.” Completely withdrawing the edict would be “a minimum,” he said.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Alain Delaquérière contributed reporting.

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

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Agency Investigates Deaths and Injuries Associated With Bed Rails

Thomas Patterson for The New York Times

Gloria Black’s mother died in her bed at a care facility.

In November 2006, when Clara Marshall began suffering from the effects of dementia, her family moved her into the Waterford at Fairway Village, an assisted living home in Vancouver, Wash. The facility offered round-the-clock care for Ms. Marshall, who had wandered away from home several times. Her husband Dan, 80 years old at the time, felt he could no longer care for her alone.

Thomas Patterson for The New York Times

Gloria Black, visiting her mother’s grave in Portland, Ore. She has documented hundreds of deaths associated with bed rails and said families should be informed of their possible risks.

But just five months into her stay, Ms. Marshall, 81, was found dead in her room apparently strangled after getting her neck caught in side rails used to prevent her from rolling out of bed.

After Ms. Marshall’s death, her daughter Gloria Black, who lives in Portland, Ore., began writing to the Consumer Product Safety Commission and the Food and Drug Administration. What she discovered was that both agencies had known for more than a decade about deaths from bed rails but had done little to crack down on the companies that make them. Ms. Black conducted her own research and exchanged letters with local and state officials. Finally, a letter she wrote in 2010 to the federal consumer safety commission helped prompt a review of bed rail deaths.

Ms. Black applauds the decision to study the issue. “But I wish it was done years ago,” she said. “Maybe my mother would still be alive.” Now the government is studying a problem it has known about for years.

Data compiled by the consumer agency from death certificates and hospital emergency room visits from 2003 through May 2012 shows that 150 mostly older adults died after they became trapped in bed rails. Over nearly the same time period, 36,000 mostly older adults — about 4,000 a year — were treated in emergency rooms with bed rail injuries. Officials at the F.D.A. and the commission said the data probably understated the problem since bed rails are not always listed as a cause of death by nursing homes and coroners, or as a cause of injury by emergency room doctors.

Experts who have studied the deaths say they are avoidable. While the F.D.A. issued safety warnings about the devices in 1995, it shied away from requiring manufacturers to put safety labels on them because of industry resistance and because the mood in Congress then was for less regulation. Instead only “voluntary guidelines” were adopted in 2006.

More warnings are needed, experts say, but there is a technical question over which regulator is responsible for some bed rails. Are they medical devices under the purview of the F.D.A., or are they consumer products regulated by the commission?

“This is an entirely preventable problem,” said Dr. Steven Miles, a professor at the Center for Bioethics at the University of Minnesota, who first alerted federal regulators to deaths involving bed rails in 1995. The government at the time declined to recall any bed rails and opted instead for a safety alert to nursing homes and home health care agencies.

Forcing the industry to improve designs and replace older models could have potentially cost bed rail makers and health care facilities hundreds of million of dollars, said Larry Kessler, a former F.D.A. official who headed its medical device office. “Quite frankly, none of the bed rails in use at that time would have passed the suggested design standards in the guidelines if we had made them mandatory,” he said. No analysis has been done to determine how much it would cost the manufacturers to reduce the hazards.

Bed rails are metal bars used on hospital beds and in home care to assist patients in pulling themselves up or helping them out of bed. They can also prevent people from rolling out of bed. But sometimes patients — particularly those suffering from Alzheimer’s — can get confused and trapped between a bed rail and a mattress, which can lead to serious injury or even death.

While the use of the devices by hospitals and nursing homes has declined as professional caregivers have grown aware of the dangers, experts say dozens of older adults continue to die each year as more rails are used in home care and many health care facilities continue to use older rail models.

Since those first warnings in 1995, about 550 bed rail-related deaths have occurred, a review by The New York Times of F.D.A. data, lawsuits, state nursing home inspection reports and interviews, found. Last year alone, the F.D.A. data shows, 27 people died.

As deaths continued after the F.D.A. warning, a working group put together in 1999 and made up of medical device makers, researchers, patient advocates and F.D.A. officials considered requiring bed rail makers to add warning labels.

But the F.D.A. decided against it after manufacturers resisted, citing legal issues. The agency said added cost to small manufacturers and difficulties of getting regulations through layers of government approval, were factors against tougher standards, according to a meeting log of the group in 2000 and interviews.

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Agency Investigates Deaths and Injuries Associated With Bed Rails

Thomas Patterson for The New York Times

Gloria Black’s mother died in her bed at a care facility.

In November 2006, when Clara Marshall began suffering from the effects of dementia, her family moved her into the Waterford at Fairway Village, an assisted living home in Vancouver, Wash. The facility offered round-the-clock care for Ms. Marshall, who had wandered away from home several times. Her husband Dan, 80 years old at the time, felt he could no longer care for her alone.

Thomas Patterson for The New York Times

Gloria Black, visiting her mother’s grave in Portland, Ore. She has documented hundreds of deaths associated with bed rails and said families should be informed of their possible risks.

But just five months into her stay, Ms. Marshall, 81, was found dead in her room apparently strangled after getting her neck caught in side rails used to prevent her from rolling out of bed.

After Ms. Marshall’s death, her daughter Gloria Black, who lives in Portland, Ore., began writing to the Consumer Product Safety Commission and the Food and Drug Administration. What she discovered was that both agencies had known for more than a decade about deaths from bed rails but had done little to crack down on the companies that make them. Ms. Black conducted her own research and exchanged letters with local and state officials. Finally, a letter she wrote in 2010 to the federal consumer safety commission helped prompt a review of bed rail deaths.

Ms. Black applauds the decision to study the issue. “But I wish it was done years ago,” she said. “Maybe my mother would still be alive.” Now the government is studying a problem it has known about for years.

Data compiled by the consumer agency from death certificates and hospital emergency room visits from 2003 through May 2012 shows that 150 mostly older adults died after they became trapped in bed rails. Over nearly the same time period, 36,000 mostly older adults — about 4,000 a year — were treated in emergency rooms with bed rail injuries. Officials at the F.D.A. and the commission said the data probably understated the problem since bed rails are not always listed as a cause of death by nursing homes and coroners, or as a cause of injury by emergency room doctors.

Experts who have studied the deaths say they are avoidable. While the F.D.A. issued safety warnings about the devices in 1995, it shied away from requiring manufacturers to put safety labels on them because of industry resistance and because the mood in Congress then was for less regulation. Instead only “voluntary guidelines” were adopted in 2006.

More warnings are needed, experts say, but there is a technical question over which regulator is responsible for some bed rails. Are they medical devices under the purview of the F.D.A., or are they consumer products regulated by the commission?

“This is an entirely preventable problem,” said Dr. Steven Miles, a professor at the Center for Bioethics at the University of Minnesota, who first alerted federal regulators to deaths involving bed rails in 1995. The government at the time declined to recall any bed rails and opted instead for a safety alert to nursing homes and home health care agencies.

Forcing the industry to improve designs and replace older models could have potentially cost bed rail makers and health care facilities hundreds of million of dollars, said Larry Kessler, a former F.D.A. official who headed its medical device office. “Quite frankly, none of the bed rails in use at that time would have passed the suggested design standards in the guidelines if we had made them mandatory,” he said. No analysis has been done to determine how much it would cost the manufacturers to reduce the hazards.

Bed rails are metal bars used on hospital beds and in home care to assist patients in pulling themselves up or helping them out of bed. They can also prevent people from rolling out of bed. But sometimes patients — particularly those suffering from Alzheimer’s — can get confused and trapped between a bed rail and a mattress, which can lead to serious injury or even death.

While the use of the devices by hospitals and nursing homes has declined as professional caregivers have grown aware of the dangers, experts say dozens of older adults continue to die each year as more rails are used in home care and many health care facilities continue to use older rail models.

Since those first warnings in 1995, about 550 bed rail-related deaths have occurred, a review by The New York Times of F.D.A. data, lawsuits, state nursing home inspection reports and interviews, found. Last year alone, the F.D.A. data shows, 27 people died.

As deaths continued after the F.D.A. warning, a working group put together in 1999 and made up of medical device makers, researchers, patient advocates and F.D.A. officials considered requiring bed rail makers to add warning labels.

But the F.D.A. decided against it after manufacturers resisted, citing legal issues. The agency said added cost to small manufacturers and difficulties of getting regulations through layers of government approval, were factors against tougher standards, according to a meeting log of the group in 2000 and interviews.

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Mike Lynch, Autonomy’s Founder, Says He’s Baffled by H.P.’s Claims

SAN FRANCISCO — Mike Lynch was growing bored in a business meeting in London on Tuesday when his phone buzzed.

A text message from a friend informed him that Hewlett-Packard was taking an $8.8 billion charge. A few minutes later, another message said H.P. was putting most of the blame for the write-down on accounting problems at Autonomy, the company Mr. Lynch co-founded and sold to H.P. last year for $10 billion. There was talk of potentially criminal activities.

Since that jolt, Mr. Lynch has been unusually candid and vocal in defending himself and the company he built, rather than hiding out behind a phalanx of lawyers as might be expected. He says he was blindsided by a long-prepared public relations onslaught by H.P., little of which had to do with the substance of its claims about Autonomy.

“It’s been a bit of a shock,” said Mr. Lynch, who joined Hewlett-Packard in October 2011 but was fired by Meg Whitman, H.P.’s chief executive, in May. “The last time I talked to anyone there was in June, for about an hour.”

Mr. Lynch was once the face of H.P.’s future, thanks to Autonomy’s high-end business analysis software. Last week, he became the public face of what the company said was a vast, systemic fraud.

But in charging gross improprieties at Autonomy, H.P. has attacked a man who may be Britain’s most notable and contentious technology executive, and one of Europe’s biggest self-made successes. Mr. Lynch, 47, sits on the boards of the British Broadcasting Corporation and the British Library, and was awarded an Order of the British Empire for his service to business.

Before Hewlett-Packard bought Autonomy, it was listed on Britain’s major stock index. Its prominence allowed it to hire top engineers, who were worked remorselessly hard compared with their Silicon Valley counterparts, former employees say.

People who have worked with Mr. Lynch note both his accomplishments and his temper. “I don’t think I’ve ever called anyone an idiot in the office, but I’m direct,” he said. “That’s part of getting stuff done. I find good people and I value them. That is how I’ve been able to do what I’ve done.”

While Autonomy is not well known in the United States, it was considered a pioneer in the booming field of Big Data, and its pattern-seeking algorithms are at work at over 400 companies, including Oracle, Adobe, Cisco and, even before the purchase, Hewlett-Packard. Mr. Lynch personally made about $800 million from the sale to H.P.

Even with all of his money, intellect and a doctorate from Cambridge, what Mr. Lynch says he cannot figure out is how H.P. thinks he has done anything wrong.

Hewlett-Packard has said that its internal investigation, set off by a whistle-blower, uncovered major problems at Autonomy that were present before the merger. Among them were the booking of hardware sales as higher-margin software sales, and resellers reporting sales that did not exist.

Mr. Lynch said Autonomy’s sales fell off a cliff after it merged with Hewlett-Packard — not because it suddenly had to account for things legally, as H.P. claims, but because of institutional foot-dragging.

“They drove out the top 100 people from Autonomy, and a bunch of trainees were put in” to sell Autonomy products, he said. “H.P. salesmen got better commissions for selling our competitors’ products.”

Mr. Lynch said H.P. told him it could not formally approve Autonomy’s software for use on its customers’ servers, “when it was already running on thousands of H.P. machines around the world.” He added: “H.P. has core structural problems.”

Hewlett-Packard counters that Mr. Lynch was a singular force of resistance to the merger as soon as his check cleared.

“He was at every strategy session, was in person or on video for every meeting of the executive council,” said an H.P. executive briefed on the investigation who spoke on the condition of anonymity because he was not authorized to speak on the record. “He wouldn’t work with anyone. Sometimes he was enthusiastic, but other times he’d say, ‘This makes no sense. I’m going back to London.’ ”

On at least two different cross-country flights on an H.P. private jet, the executive said, Mr. Lynch went to the back of the aircraft and refused to talk with anyone for the entire flight.

A spokeswoman for Mr. Lynch, Vanessa Colomar, said he had not been on the corporate jet before and “didn’t know the etiquette.” She said he spent the time working.

Michael J. de la Merced contributed reporting from New York.

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Mohamed Morsi of Egypt Faces Backlash Against Decree

Tara Todras-Whitehill for The New York Times

Protesters clashed with police in the streets of Cairo for the third straight day.

CAIRO — Cracks appeared on Sunday in the government of President Mohamed Morsi of Egypt, as he faces mounting pressure over his sweeping decree seeking to elevate his edicts above the reach of any court until a new constitution is approved.

Mr. Morsi’s justice minister began arguing publicly for a retreat. At least three other senior advisers resigned over the measure. And it has prompted widening street protests and cries from opponents that Mr. Morsi, who already governs without a legislature, was moving toward a new autocracy in Egypt, less than two years after the ouster of the strongman Hosni Mubarak.

With a threatened strike by the nation’s judges, a plunge in the country’s stock market and more street protests looming, Mr. Morsi’s administration sent mixed messages on Sunday over whether it was willing to consider a compromise. A spokesman for the president’s party insisted that there would be no change in his edict, but a statement from the party indicated for the first time a willingness to give political opponents “guarantees against monopolizing the fateful decisions of the homeland in the absence of the Parliament.”

And the justice minister, Ahmed Mekki, the influential leader of a judicial independent movement under Mr. Mubarak and one of Mr. Morsi’s closest aides, was actively trying to broker a deal with top jurists to resolve the crisis.

It is the most acute test to date of the ability and willingness of Mr. Morsi, Egypt’s first freely elected president and a former leader of the Muslim Brotherhood, to engage in the kind of give and take that democratic government requires. But he also must contend with real doubts about the willingness of his anti-Islamist opponents to join him in compromise. Each side is mired in deep suspicion of the other, a legacy of the decades when the Brotherhood survived here only as an insular secret society, demonized as dangerous radicals by most of the Egyptian elite.

“There is a deep mistrust,” said Emad Shahin, a political scientist at the American University in Cairo who studies the Brotherhood. “It is an ugly round of partisan politics,” he said, “a bone-crushing phase.”

The scale of the backlash against the decree appeared to catch Mr. Morsi’s government by surprise. “In his head, the president thought that this would push us forward, but then it was met with all this inflammation,” Mr. Mekki said. He faulted the president for failing to consult with his opponents before issuing it, but he also faulted the opponents for their own unwillingness to come to the table: “I blame all of Egypt, because they do not know how to talk to each other.”

Government and party officials maintained that Mr. Morsi was forced to claim the expansive new powers to protect the process of writing the country’s new constitution, and that the decree would be in effect only until the charter was in place. A court of judges appointed under the Mubarak government was widely rumored to be about to dissolve the elected constitutional assembly, dominated by Mr. Morsi’s Islamist allies — just as the same court had previously cast out the newly elected Islamist-led Parliament — and the decree issued by Mr. Morsi on Thursday gave him the power to stop it.

“I see with all of you, clearly, that the court verdict is announced two or three weeks before the court session,” Mr. Morsi told his supporters on Friday, referring to the pervasive rumors about the court’s impending action in a fiery speech defending his decree. “We will dissolve the entire homeland, as it seems! How is that? How? Those waywards must be held accountable."

He said that corrupt Mubarak loyalists were “hiding under the cover of the judiciary” and declared, “I will uncover them!”

But instead of rallying the public to his side and speeding the country’s political transition, as Mr. Morsi evidently hoped, his decree has unleashed new instability across the country. On Sunday, the first day of business here since the decree was issued, the Egyptian stock market fell by about 9.5 percent, erasing more than $4 billion of value.

The Muslim Brotherhood’s political offshoot, the Freedom & Justice Party, faced the ire of protesters. Nader Omran, a spokesman for the party, said on Sunday that as many as 13 of its offices around the country had been burned or ransacked, and he blamed the attacks on an organized conspiracy.

The most significant sign of the growing pressure on Mr. Morsi, though, may have been the apparent efforts of Mr. Mekki, the justice minister, to address the crisis by finding a way to scale back the decree.

Kareem Fahim, Nevine Ramzy, Mayy El Sheikh and Mai Ayyad contributed reporting.

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Lobbying, a Windfall and a Leader’s Family

The New York Times

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

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

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

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

Ping An was not broken up.

The successful outcome of the lobbying effort would prove monumental.

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

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

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

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

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

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

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

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

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

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

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

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White House Presses for Drone Rule Book

WASHINGTON — Facing the possibility that President Obama might not win a second term, his administration accelerated work in the weeks before the election to develop explicit rules for the targeted killing of terrorists by unmanned drones, so that a new president would inherit clear standards and procedures, according to two administration officials.

The matter may have lost some urgency after Nov. 6. But with more than 300 drone strikes and some 2,500 people killed by the Central Intelligence Agency and the military since Mr. Obama first took office, the administration is still pushing to make the rules formal and resolve internal uncertainty and disagreement about exactly when lethal action is justified.

Mr. Obama and his advisers are still debating whether remote-control killing should be a measure of last resort against imminent threats to the United States, or a more flexible tool, available to help allied governments attack their enemies or to prevent militants from controlling territory.

Though publicly the administration presents a united front on the use of drones, behind the scenes there is longstanding tension. The Defense Department and the C.I.A. continue to press for greater latitude to carry out strikes; Justice Department and State Department officials, and the president’s counterterrorism adviser, John O. Brennan, have argued for restraint, officials involved in the discussions say.

More broadly, the administration’s legal reasoning has not persuaded many other countries that the strikes are acceptable under international law. For years before the Sept. 11, 2001, attacks, the United States routinely condemned targeted killings of suspected terrorists by Israel, and most countries still object to such measures.

But since the first targeted killing by the United States in 2002, two administrations have taken the position that the United States is at war with Al Qaeda and its allies and can legally defend itself by striking its enemies wherever they are found.

Partly because United Nations officials know that the United States is setting a legal and ethical precedent for other countries developing armed drones, the U.N. plans to open a unit in Geneva early next year to investigate American drone strikes.

The attempt to write a formal rule book for targeted killing began last summer after news reports on the drone program, started under President George W. Bush and expanded by Mr. Obama, revealed some details of the president’s role in the shifting procedures for compiling “kill lists” and approving strikes. Though national security officials insist that the process is meticulous and lawful, the president and top aides believe it should be institutionalized, a course of action that seemed particularly urgent when it appeared that Mitt Romney might win the presidency.

“There was concern that the levers might no longer be in our hands,” said one official, speaking on condition of anonymity. With a continuing debate about the proper limits of drone strikes, Mr. Obama did not want to leave an “amorphous” program to his successor, the official said. The effort, which would have been rushed to completion by January had Mr. Romney won, will now be finished at a more leisurely pace, the official said.

Mr. Obama himself, in little-noticed remarks, has acknowledged that the legal governance of drone strikes is still a work in progress.

“One of the things we’ve got to do is put a legal architecture in place, and we need Congressional help in order to do that, to make sure that not only am I reined in but any president’s reined in terms of some of the decisions that we’re making,” Mr. Obama told Jon Stewart in an appearance on “The Daily Show” on Oct. 18.

In an interview with Mark Bowden for a new book on the killing of Osama bin Laden, “The Finish,” Mr. Obama said that “creating a legal structure, processes, with oversight checks on how we use unmanned weapons, is going to be a challenge for me and my successors for some time to come.”

The president expressed wariness of the powerful temptation drones pose to policy makers. “There’s a remoteness to it that makes it tempting to think that somehow we can, without any mess on our hands, solve vexing security problems,” he said.

Despite public remarks by Mr. Obama and his aides on the legal basis for targeted killing, the program remains officially classified. In court, fighting lawsuits filed by the American Civil Liberties Union and The New York Times seeking secret legal opinions on targeted killings, the government has refused even to acknowledge the existence of the drone program in Pakistan.

But by many accounts, there has been a significant shift in the nature of the targets. In the early years, most strikes were aimed at ranking leaders of Al Qaeda thought to be plotting to attack the United States. That is the purpose Mr. Obama has emphasized, saying in a CNN interview in September that drones were used to prevent “an operational plot against the United States” and counter “terrorist networks that target the United States.”

But for at least two years in Pakistan, partly because of the C.I.A.’s success in decimating Al Qaeda’s top ranks, most strikes have been directed at militants whose main battle is with the Pakistani authorities or who fight with the Taliban against American troops in Afghanistan.

In Yemen, some strikes apparently launched by the United States killed militants who were preparing to attack Yemeni military forces. Some of those killed were wearing suicide vests, according to Yemeni news reports.

“Unless they were about to get on a flight to New York to conduct an attack, they were not an imminent threat to the United States,” said Micah Zenko, a fellow at the Council on Foreign Relations who is a critic of the strikes. “We don’t say that we’re the counterinsurgency air force of Pakistan, Yemen and Somalia, but we are.”

Then there is the matter of strikes against people whose identities are unknown. In an online video chat in January, Mr. Obama spoke of the strikes in Pakistan as “a targeted, focused effort at people who are on a list of active terrorists.” But for several years, first in Pakistan and later in Yemen, in addition to “personality strikes” against named terrorists, the C.I.A. and the military have carried out “signature strikes” against groups of suspected, unknown militants.

Originally that term was used to suggest the specific “signature” of a known high-level terrorist, such as his vehicle parked at a meeting place. But the word evolved to mean the “signature” of militants in general — for instance, young men toting arms in an area controlled by extremist groups. Such strikes have prompted the greatest conflict inside the Obama administration, with some officials questioning whether killing unidentified fighters is legally justified or worth the local backlash.

Many people inside and outside the government have argued for far greater candor about all of the strikes, saying excessive secrecy has prevented public debate in Congress or a full explanation of their rationale. Experts say the strikes are deeply unpopular both in Pakistan and Yemen, in part because of allegations of large numbers of civilian casualties, which American officials say are exaggerated.

Gregory D. Johnsen, author of “The Last Refuge: Yemen, Al Qaeda and America’s War in Arabia,” argues that the strike strategy is backfiring in Yemen. “In Yemen, Al Qaeda is actually expanding,” Mr. Johnsen said in a recent talk at the Brookings Institution, in part because of the backlash against the strikes.

Shuja Nawaz, a Pakistan-born analyst now at the Atlantic Council in Washington, said the United States should start making public a detailed account of the results of each strike, including any collateral deaths, in part to counter propaganda from jihadist groups. “This is a grand opportunity for the Obama administration to take the drones out of the shadows and to be open about their objectives,” he said.

But the administration appears to be a long way from embracing such openness. The draft rule book for drone strikes that has been passed among agencies over the last several months is so highly classified, officials said, that it is hand-carried from office to office rather than sent by e-mail.

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New Zealand Wants a Hollywood Put on Its Map

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

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

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

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

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

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

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

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

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

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

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

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

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