2014 12 27 cmyk NA 04online.wsj.com/public/resources/documents/pageone122714.pdfJohn Magazino,import...
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YELLOW VOL. CCLXIV NO. 151 ******* SATURDAY/SUNDAY, DECEMBER 27 - 28, 2014 HHHH $3.00 WSJ.com WEEKEND An Unserious Look At the Year Ahead REVIEW Reconsider the Chicken OFF DUTY n Oil and gas companies are cutting capital budgets and service companies are weigh- ing layoffs after a roughly 50% drop in crude prices. A1 n Finra doesn’t make public all the regulatory red flags it has about brokers, prompting calls from state regulators for more expansive disclosure. A1 n The SEC plans to fix a flaw in its electronic distri- bution of corporate regulatory filings that gives rapid-fire traders a time advantage. B1 n Sony’s PlayStation Network remained offline Friday, while Microsoft had restored Xbox Live, after outages a hacker group said were its doing. B1 n The Dow industrials and S&P 500 notched records, with the blue chips gaining 23.50 points to 18053.71. En- ergy prices slipped. B2 n Japan plans to sell part of its state-owned postal service, Japan Post, to the public as soon as August, and plans to list its financial units. B2 n Aereo can auction off its TV streaming technology after it struck a deal with broad- casters over the sale process, a bankruptcy judge said. B3 n Ferrari’s chairman wants to expand production, arguing a surge in emerging-market wealth justifies an increase. B1 n Singapore’s exchange is pushing into riskier markets to stay competitive as stock- trading volume falls. B2 What’s News i i i Business & Finance World-Wide i i i CONTENTS Books.......................... C5-10 Corporate News........ B3 Eating & Drinking D1,4,5 Heard on Street.......B12 In the Markets........... B4 Letters to Editor...... A12 Opinion.....................A11-13 Sports............................. A14 Stock Listings.............. B9 Style & Fashion ...... D2,3 Travel ............................. D6,7 Weather Watch........B12 Weekend Investor B5-7 s Copyright 2014 Dow Jones & Company. All Rights Reserved > Inside NOONAN A13 A Parishioner’s Plea: Spare This Church G OP lawmakers are pre- paring a variety of bills that would make substantial changes to the immigration system, suggesting that in- terest in addressing immi- gration law remains alive. A4 The Chamber of Commerce, which helped Republicans in the midterm election, called on the GOP to enact a vigorous legislative program. A4 n Ukraine cut off electricity and train and bus services to Crimea, moves that could raise tensions with Russia. Visa and MasterCard are suspending operations in Crimea. A9 n Facebook, Twitter and Google have started resisting Russian government orders to remove information about a rally next month in support of an opposition leader. A9 n Chinese anticorruption agents are investigating a senior official at a govern- ment agency that has probed foreign companies. A8 n The U.S., Japan and South Korea agreed to sign an in- telligence-sharing pact aimed at improving defenses against North Korean missiles. A8 n South Asian communities held services to mark the 10- year anniversary of a tsunami that killed 228,000 people. A9 n Civics instruction is mak- ing a comeback after years on the back burner of the na- tion’s educational agenda. A3 U.S. oil and gas companies have been an engine of growth through much of an otherwise lackluster economic expansion, providing steady employment, solid wages and fierce competi- tion for workers across wide swaths of the country. Now, after a roughly 50% plunge in oil prices, exploration and production companies are cut- ting capital budgets, service com- panies are weighing layoffs and nonenergy firms that popped up to support the industry are brac- ing for a protracted slowdown. One company caught in the in- dustry downturn is Hercules Off- shore Inc. The Houston-based firm is laying off 324 employees, roughly 15% of its workforce, be- cause oil companies aren’t re- newing contracts for its offshore drilling rigs in the Gulf of Mexico while crude prices are depressed. “It’s been breathtaking,” said Jim Noe, executive vice president of Hercules, which was founded in 2004. “We’ve never seen this glut of supply and dislocation in oil markets. So we’re not sur- prised to see a significant decline in demand for our services.” Lower oil prices are still ex- pected to provide an overall boost to the U.S. economy. Con- sumers are spending less on gas- oline and more at retailers and restaurants, while many compa- nies are benefiting from cheaper costs for energy and raw materi- als—giving a boost to hiring out- side the energy sector. Money that would have gone to im- ported oil—the U.S. remains a net importer—will remain at home. The U.S. Energy Information Please turn to the next page BY JEFFREY SPARSHOTT Oil Jobs Squeezed As Prices Plummet Jomah, a 17-year-old Syrian who joined Islamic State last year, sat in a circle of trainees for a lesson in beheading, a course taught to boys as young as 8. Teachers brought in three frightened Syrian soldiers, who were jeered and forced to their knees. “It was like learning to chop an onion,” Jomah said. “You grab him by the forehead and then slowly slice across the neck.” A teacher asked for volun- teers and said, “Those who be- head the infidels will receive gifts from God,” recalled Jomah, who didn’t want his full name revealed. The youngest boys shot up their hands and several were chosen to participate. Af- terward, the teachers ordered the students to pass around the severed heads. “I’d become desensitized by that time,” said Jomah, who has since defected to Turkey with his family. “The beheading vid- eos they’d shown us helped.” The enrollment of hundreds of boys in such militant training camps is another tragic facet of Syria’s nearly four-year-long civil war—and its impact could trouble the Middle East for years to come. Parents worry their boys will be forever lost to the indoctrination of Islamic State. The militant group, which has seized large swaths of Syria and Iraq, has remade the secular ed- ucation system in territory un- der its control, leaving families to choose between a radical Isla- mist education or nothing. Islamic State religious schools in the Syrian provinces of Aleppo and use Deir Ezzour— where, for example, chemistry has been replaced by religious studies—have become a conduit for recruiting boys to the fight- ing ranks, five former child sol- diers and several adult militants told The Wall Street Journal in Turkey, where they are refugees. One of them, 17-year-old Is- mail, said he was ordered this summer by his Islamic State su- periors to help behead every Please turn to page A5 BY MARIA ABI-HABIB The Child Soldiers of Syria Boys Who Escape Islamic State Recount Horrors; ‘Like Learning to Chop an Onion’ For years, Brad Margus has juggled two goals as chief execu- tive: Make money, and find cures for his children. He just co-founded a startup, Exigence Neurosciences Inc., in part to seek treatments for his two sons who have ataxia-telan- giectasia, or A-T, a rare progres- sive and eventually fatal neuro- logical disease. There is no effective drug for it, and the 54-year-old Mr. Mar- gus, of Boca Raton, Fla., says his goal is to find one. His new com- pany will also need to stay in business, which means plowing money and time into projects that promise profits. His dilemma: The most promising revenues are in brain diseases more common than A-T, such as Alzheimer’s. So he plans to focus there first, as he did in a previous company he also hoped might identify A-T treatments. His work may lead to answers for his boys’ disease, he says, but “I may not make it in time for my own kids.” Not long ago, this dilemma was unusual. Enterprising par- ents wanting to speed drug de- velopment for a child typically formed foundations to raise money for someone else’s re- search. There are roughly 5,300 hu- man diseases known by molecu- lar basis and about 500 have treatments, says the National In- stitutes of Health. Rare ailments often don’t have medicines, in part because many drug compa- nies don’t want to make risky bets on the small markets they represent. Now, there is a small cadre of parents like Mr. Margus starting for-profit ventures to make those bets. Nonprofits have limitations, they say, because Please turn to page A10 BY AMY DOCKSER MARCUS PROFIT MOTIVE Parents Struggle to Cure Loved Ones, and Make Money Wall Street’s own national watchdog doesn’t make public all the regulatory red flags it has about brokers, prompting calls from state regulators for more expansive disclosure. Investors checking disciplin- ary records from the Financial Industry Regulatory Authority, or Finra, can see that in Bennett Broad’s 35-year career as a stockbroker, he has faced 25 cus- tomer complaints involving al- leged trading abuses, and that 15 ended in payouts to clients. What they won’t see is that a former employer, UBS AG, launched an internal investiga- tion into Mr. Broad’s business practices back in 2003 and then, according to state regulators, “permitted” him “to resign.” At least eight of his 25 complaints involved conduct after that in- vestigation. Finra, an industry-funded overseer of brokers, encourages investors to check its Bro- kerCheck Web page to look for regulatory red flags about indi- vidual brokers, including com- plaints, regulatory actions, ter- minations for cause and personal bankruptcies. Mr. Broad’s Bro- Please turn to the next page BY JEAN EAGLESHAM AND ROB BARRY National Records Miss Many Brokers’ Red Flags Source: National Institutes of Health The Wall Street Journal Bitter Pill Less than 10% of the roughly 5,300 diseases known by molecular basis have treatments. Approximately 500 are treatable Approximately 4,800 have no known treatment Solemn Goodbye to a Fallen New York City Police Officer Kevin Hagen for The Wall Street Journal A white-truffle glut is ruffling the expensive-restaurant scene. Locanda Verde, an Italian res- taurant in Manhattan’s Tribeca neighborhood, is now serving white truffles shaved over pasta for the bargain price of $50, down from $100 last year. “We call it truffles for the peo- ple,” says chef Andrew Carmellini. The restaurant has also ex- panded an event called Trufflepal- ooza, which features three courses of white-truffle indulgence. It used to be a one-night affair. This year, Trufflepalooza ran for two months and truffles will be offered on New Year’s Eve. A wet, warm summer in North- ern Italy, where the world’s most desir- able white truffles are dug up, has pro- duced a bumper fungi crop. That pushed prices down about 50% from last year, according to chefs, dealers and restaurant opera- tors. The steep drop sparked an un- precedented frenzy as truffle hunters, brokers and chefs have scrambled to move the delicate merchandise. That has led to some unheard-of contortions in pricey dining rooms. “They’re like diamonds,” said John Magazino, import specialist at the Chefs’ Ware- house, a specialty food distributor in Ridgefield, Conn. He said wholesale prices are the low- est he has seen in about 15 years. He’s selling truffles for just below $1,000 to about $2,400 a pound depending on their size, down from $4,000 to $7,000 a pound in 2006. Larger truffles typ- ically cost more. “The biggest ones aren’t neces- sarily the best ones, but they look really cool,” Mr. Carmellini said, as he shaved a generous portion from a fig-sized truffle over po- Please turn to page A8 BY ALEXANDRA WEXLER Gastronomes Foraging for Bargain Truffles Are In Luck i i i Glut Ripples Through Pricey Eateries; Only $900 a Pound White truffles BLUE LINE: Colleagues carried the coffin of Officer Rafael Ramos to a Queens church, a week after he was shot along with Officer Wenjian Liu. Classique Hora Mundi BREGUET BOUTIQUES NEW YORK BEVERLY HILLS BAL HARBOUR LAS VEGAS TOLL FREE 877-891-1272 C M Y K Composite Composite MAGENTA CYAN BLACK P2JW361000-7-A00100-10EFFB7178F CL,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WE BG,BM,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO P2JW361000-7-A00100-10EFFB7178F
Transcript of 2014 12 27 cmyk NA 04online.wsj.com/public/resources/documents/pageone122714.pdfJohn Magazino,import...
YELLOW
VOL. CCLXIV NO. 151 * * * * * * *
SATURDAY/SUNDAY, DECEMBER 27 - 28, 2014
HHHH $3 .00
WSJ.com
WEEKEND
AnUnserious
LookAt theYearAhead
REVIEW
ReconsidertheChicken
OFF DUTY
n Oil and gas companies arecutting capital budgets andservice companies are weigh-ing layoffs after a roughly50% drop in crude prices. A1n Finra doesn’tmake publicall the regulatory red flags ithas about brokers, promptingcalls from state regulators formore expansive disclosure. A1n The SEC plans to fix aflaw in its electronic distri-bution of corporate regulatoryfilings that gives rapid-firetraders a time advantage. B1nSony’s PlayStation Networkremained offline Friday, whileMicrosoft had restored XboxLive, after outages a hackergroup said were its doing. B1n The Dow industrials andS&P 500 notched records,with the blue chips gaining23.50 points to 18053.71. En-ergy prices slipped. B2n Japan plans to sell part ofits state-owned postal service,Japan Post, to the public assoon as August, and plans tolist its financial units. B2n Aereo can auction off itsTV streaming technology afterit struck a deal with broad-casters over the sale process,a bankruptcy judge said. B3n Ferrari’s chairman wantsto expand production, arguinga surge in emerging-marketwealth justifies an increase. B1n Singapore’s exchange ispushing into riskier marketsto stay competitive as stock-trading volume falls. B2
What’sNews
i i i
Business&Finance
World-Wide
i i i
CONTENTSBooks..........................C5-10Corporate News........ B3Eating & Drinking D1,4,5Heard on Street.......B12In the Markets...........B4Letters to Editor......A12
Opinion.....................A11-13Sports.............................A14Stock Listings..............B9Style & Fashion......D2,3Travel.............................D6,7Weather Watch........B12Weekend Investor B5-7
s Copyright 2014 Dow Jones & Company.All Rights Reserved
>
InsideNOONAN A13
A Parishioner’sPlea: SpareThis Church
GOP lawmakers are pre-paring a variety of bills
that would make substantialchanges to the immigrationsystem, suggesting that in-terest in addressing immi-gration law remains alive. A4The Chamber of Commerce,which helped Republicans inthe midterm election, called onthe GOP to enact a vigorouslegislative program. A4n Ukraine cut off electricityand train and bus services toCrimea, moves that could raisetensions with Russia. Visa andMasterCard are suspendingoperations in Crimea. A9n Facebook, Twitter andGoogle have started resistingRussian government ordersto remove information abouta rally next month in supportof an opposition leader. A9n Chinese anticorruptionagents are investigating asenior official at a govern-ment agency that has probedforeign companies. A8n The U.S., Japan and SouthKorea agreed to sign an in-telligence-sharing pact aimedat improving defenses againstNorth Korean missiles. A8n South Asian communitiesheld services to mark the 10-year anniversary of a tsunamithat killed 228,000 people. A9n Civics instruction is mak-ing a comeback after yearson the back burner of the na-tion’s educational agenda. A3
U.S. oil and gas companieshave been an engine of growththrough much of an otherwiselackluster economic expansion,providing steady employment,solid wages and fierce competi-tion for workers across wideswaths of the country.
Now, after a roughly 50%plunge in oil prices, explorationand production companies are cut-ting capital budgets, service com-panies are weighing layoffs andnonenergy firms that popped upto support the industry are brac-ing for a protracted slowdown.
One company caught in the in-dustry downturn is Hercules Off-shore Inc. The Houston-basedfirm is laying off 324 employees,roughly 15% of its workforce, be-cause oil companies aren’t re-newing contracts for its offshoredrilling rigs in the Gulf of Mexicowhile crude prices are depressed.
“It’s been breathtaking,” saidJim Noe, executive vice presidentof Hercules, which was foundedin 2004. “We’ve never seen thisglut of supply and dislocation inoil markets. So we’re not sur-prised to see a significant declinein demand for our services.”
Lower oil prices are still ex-pected to provide an overallboost to the U.S. economy. Con-sumers are spending less on gas-oline and more at retailers andrestaurants, while many compa-nies are benefiting from cheapercosts for energy and raw materi-als—giving a boost to hiring out-side the energy sector. Moneythat would have gone to im-ported oil—the U.S. remains anet importer—will remain athome.
The U.S. Energy InformationPleaseturntothenextpage
BY JEFFREY SPARSHOTT
Oil JobsSqueezedAs PricesPlummet
Jomah, a 17-year-old Syrianwho joined Islamic State lastyear, sat in a circle of traineesfor a lesson in beheading, acourse taught to boys as youngas 8.
Teachers brought in threefrightened Syrian soldiers, whowere jeered and forced to theirknees. “It was like learning tochop an onion,” Jomah said.“You grab him by the foreheadand then slowly slice across theneck.”
A teacher asked for volun-teers and said, “Those who be-head the infidels will receivegifts from God,” recalled Jomah,who didn’t want his full namerevealed. The youngest boysshot up their hands and severalwere chosen to participate. Af-terward, the teachers orderedthe students to pass around thesevered heads.
“I’d become desensitized bythat time,” said Jomah, who hassince defected to Turkey withhis family. “The beheading vid-eos they’d shown us helped.”
The enrollment of hundredsof boys in such militant trainingcamps is another tragic facet ofSyria’s nearly four-year-longcivil war—and its impact couldtrouble the Middle East for yearsto come. Parents worry theirboys will be forever lost to theindoctrination of Islamic State.
The militant group, which hasseized large swaths of Syria andIraq, has remade the secular ed-ucation system in territory un-der its control, leaving familiesto choose between a radical Isla-mist education or nothing.
Islamic State religious schoolsin the Syrian provinces ofAleppo and use Deir Ezzour—where, for example, chemistryhas been replaced by religiousstudies—have become a conduitfor recruiting boys to the fight-ing ranks, five former child sol-diers and several adult militantstold The Wall Street Journal inTurkey, where they are refugees.
One of them, 17-year-old Is-mail, said he was ordered thissummer by his Islamic State su-periors to help behead every
PleaseturntopageA5
BY MARIA ABI-HABIB
The Child Soldiers of SyriaBoys Who Escape Islamic State Recount Horrors; ‘Like Learning to Chop an Onion’
For years, Brad Margus hasjuggled two goals as chief execu-tive: Make money, and find curesfor his children.
He just co-founded a startup,Exigence Neurosciences Inc., inpart to seek treatments for histwo sons who have ataxia-telan-giectasia, or A-T, a rare progres-sive and eventually fatal neuro-logical disease.
There is no effective drug forit, and the 54-year-old Mr. Mar-gus, of Boca Raton, Fla., says hisgoal is to find one. His new com-pany will also need to stay inbusiness, which means plowingmoney and time into projectsthat promise profits.
His dilemma: The most promising revenues arein brain diseases more common than A-T, such asAlzheimer’s. So he plans to focus there first, as hedid in a previous company he also hoped might
identify A-T treatments. His workmay lead to answers for his boys’disease, he says, but “I may notmake it in time for my own kids.”
Not long ago, this dilemmawas unusual. Enterprising par-ents wanting to speed drug de-velopment for a child typicallyformed foundations to raisemoney for someone else’s re-search.
There are roughly 5,300 hu-man diseases known by molecu-lar basis and about 500 havetreatments, says the National In-stitutes of Health. Rare ailmentsoften don’t have medicines, inpart because many drug compa-nies don’t want to make riskybets on the small markets theyrepresent.
Now, there is a small cadre of parents like Mr.Margus starting for-profit ventures to make thosebets. Nonprofits have limitations, they say, because
PleaseturntopageA10
BY AMY DOCKSER MARCUS
PROFIT MOTIVE
Parents Struggle to CureLovedOnes, andMakeMoney
Wall Street’s own nationalwatchdog doesn’t make public allthe regulatory red flags it hasabout brokers, prompting callsfrom state regulators for moreexpansive disclosure.
Investors checking disciplin-ary records from the FinancialIndustry Regulatory Authority,or Finra, can see that in BennettBroad’s 35-year career as astockbroker, he has faced 25 cus-tomer complaints involving al-leged trading abuses, and that 15ended in payouts to clients.
What they won’t see is that a
former employer, UBS AG,launched an internal investiga-tion into Mr. Broad’s businesspractices back in 2003 and then,according to state regulators,“permitted” him “to resign.” Atleast eight of his 25 complaintsinvolved conduct after that in-vestigation.
Finra, an industry-fundedoverseer of brokers, encouragesinvestors to check its Bro-kerCheck Web page to look forregulatory red flags about indi-vidual brokers, including com-plaints, regulatory actions, ter-minations for cause and personalbankruptcies. Mr. Broad’s Bro-
Pleaseturntothenextpage
BY JEAN EAGLESHAMAND ROB BARRY
National Records MissMany Brokers’ Red Flags
Source: National Institutes of HealthThe Wall Street Journal
Bitter PillLess than 10% of the roughly5,300 diseases known bymolecular basis have treatments.
Approximately 500 are treatable
Approximately 4,800have no knowntreatment
Solemn Goodbye to a Fallen New York City Police Officer
KevinHagen
forTh
eWallS
treetJournal
A white-truffle glut is rufflingthe expensive-restaurant scene.
Locanda Verde, an Italian res-taurant in Manhattan’s Tribecaneighborhood, is now servingwhite truffles shaved over pastafor the bargain price of $50, downfrom $100 last year.
“We call it truffles for the peo-ple,” says chef Andrew Carmellini.
The restaurant has also ex-panded an event called Trufflepal-ooza, which features three coursesof white-truffle indulgence. It usedto be a one-night affair. This year,Trufflepalooza ran for two monthsand truffles will be offered onNew Year’s Eve.
A wet, warm summer in North-
ern Italy, where theworld’s most desir-able white trufflesare dug up, has pro-duced a bumperfungi crop. Thatpushed prices downabout 50% from lastyear, according tochefs, dealers andrestaurant opera-tors.
The steep drop sparked an un-precedented frenzy as trufflehunters, brokers and chefs havescrambled to move the delicatemerchandise. That has led to someunheard-of contortions in priceydining rooms.
“They’re like diamonds,” saidJohn Magazino, import specialist
at the Chefs’ Ware-house, a specialtyfood distributor inRidgefield, Conn. Hesaid wholesaleprices are the low-est he has seen inabout 15 years. He’sselling truffles forjust below $1,000 toabout $2,400 a
pound depending on their size,down from $4,000 to $7,000 apound in 2006. Larger truffles typ-ically cost more.
“The biggest ones aren’t neces-sarily the best ones, but they lookreally cool,”Mr. Carmellini said, ashe shaved a generous portionfrom a fig-sized truffle over po-
PleaseturntopageA8
BY ALEXANDRA WEXLER
Gastronomes Foraging for Bargain Truffles Are In Lucki i i
Glut Ripples Through Pricey Eateries; Only $900 a Pound
White truffles
BLUE LINE: Colleagues carried the coffin of Officer Rafael Ramos to a Queens church, a week after he was shot along with Officer Wenjian Liu.
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ssiq
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ora
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