DealBook: Top Federal Prosecutor of Corporate Crime Will Resign

1:42 p.m. | Updated with formal announcement

Lanny A. Breuer, the federal prosecutor who led the Justice Department’s response to corporate crime in the wake of the financial crisis, announced on Wednesday that he is stepping down after nearly four years in the post.

As head of the Justice Department’s criminal division, one of the most senior roles at the agency, Mr. Breuer tackled corporate bribery and public corruption. But it was his focus on Wall Street that received the most attention, from supporters and critics alike.

While he has come under fire for a dearth of prosecutions on Wall Street in response to the crisis, Mr. Breuer also oversaw an aggressive crackdown on money-laundering and interest-rate manipulation at some of the world’s biggest banks. In two weeks last month, he joined a nearly $2 billion case against HSBC for money-laundering and a $1.5 billion settlement with UBS for rate-rigging. Next week, he is expected to take a similar rate-rigging action against the Royal Bank of Scotland.

“I think the criminal division is a fundamentally different place than it was four years ago,” Mr. Breuer said in an interview on Tuesday. “It’s the highlight of my professional career.”

His departure, effective March 1, was widely expected. Mr. Breuer had told friends for weeks that he was ready to leave the public sector. While he has not announced his next step, it is expected that he will return to private practice. He was previously a partner at Covington & Burling, a white-shoe law firm.

By virtue of his perch at the Justice Department in Washington, Mr. Breuer became the face of Wall Street prosecutions in the aftermath of the financial crisis. But when few such cases materialized, critics like the Occupy Wall Street protesters turned on him, portraying him as an apologist for banks at the center of the mortgage mess.

In contrast, he drew praise for the sweeping crackdown on rate-rigging in the banking industry, which has largely involved international benchmark rates.

In a rate manipulation case last month, Mr. Breuer’s team secured a major payout from UBS and a guilty plea from the bank’s Japanese unit, making UBS the first big global bank in more than two decades to have a subsidiary plead guilty to fraud. Mr. Breuer, who announced the action after rejecting a last-minute plea from the bank’s chairman, also filed criminal charges against two former employees at the bank.

The deal sent a strong signal that the authorities wanted to hold banks responsible for their wrongdoing.

Following the UBS model, the Justice Department is now pursuing a guilty plea from a Royal Bank of Scotland subsidiary in Asia over its role in the interest rate manipulation scandal, people briefed on the matter said. That settlement, which could come as soon as next week, is likely to include more than $650 million in fines imposed by American and British authorities, two other people with direct knowledge of the matter said.

In an interview, Mr. Breuer said the rate-rigging case amounted to “egregious criminal conduct.” He struck a similar tone about two other major financial cases — the convictions of executives from Taylor, Bean & Whitaker, a now-defunct mortgage lender, and the 110-year prison term imposed on R. Allen Stanford for his Ponzi scheme.

Mr. Breuer has also focused on money-laundering, creating a task force in 2010 that has levied more than $3 billion in fines from banks, including the record fine against HSBC. He stopped short of indicting HSBC after some regulators warned that doing so could destabilize the global financial system.

Mr. Breuer argued that the charges he did not bring — for example, against Goldman Sachs and other banks suspected of fraud after selling toxic mortgage securities to investors — could not have been proved. It was not for a lack of trying, he said, noting that United States attorneys across the country, after reviewing the same evidence he did, also declined to act.

“It’s important for me to hold the financial institutions accountable,” he said. “There’s never been a time that a prosecutor said we should bring a securitization case and I said no.”

Under Mr. Breuer, the division has also increasingly used a 1977 law, the Foreign Corrupt Practices Act, to prosecute corporate bribery.

He also helped run the Justice Department’s investigation of the BP oil spill in the Gulf of Mexico, resulting in the company paying $4.5 billion in fines and other penalties and pleading guilty to 14 criminal charges related to the rig explosion in 2010.

In a statement, Attorney General Eric H. Holder Jr. praised Mr. Breuer. “Lanny has led one of the most successful and aggressive criminal divisions in the history of the Department of Justice,” he said.

Mr. Holder stood behind Mr. Breuer when questions arose about his involvement in the botched gun-trafficking case known as Operation Fast and Furious. The pair, who were both largely cleared after an inspector general investigation, worked together at Covington.

For years, Mr. Breuer moved in and out of government. The son of Holocaust survivors who fled Europe and settled in Queens, he landed at the Manhattan district attorney’s office after graduating from Columbia Law School. In between stints at Covington, he worked as a White House special counsel, defending President Bill Clinton amid federal investigations and impeachment proceedings.

In the interview on Tuesday, Mr. Breuer reflected on his unusual path to the Justice Department.

“The fact that I got to go from Elmhurst, Queens, to the criminal division is remarkable,” he said.

A version of this article appeared in print on 01/30/2013, on page B3 of the NewYork edition with the headline: Top Federal Prosecutor of Corporate Crime Will Resign.

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The Consumer: The Drug-Dose Gender Gap

Most sleeping pills are designed to knock you out for eight hours. When the Food and Drug Administration was evaluating a new short-acting pill for people to take when they wake up in the middle of the night, agency scientists wanted to know how much of the drug would still be in users’ systems come morning.

Blood tests uncovered a gender gap: Men metabolized the drug, Intermezzo, faster than women. Ultimately the F.D.A. approved a 3.5 milligram pill for men, and a 1.75 milligram pill for women.

The active ingredient in Intermezzo, zolpidem, is used in many other sleeping aids, including Ambien. But it wasn’t until earlier this month that the F.D.A. reduced doses of Ambien for women by half.

Sleeping pills are hardly the only medications that may have unexpected, even dangerous, effects in women. Studies have shown that women respond differently than men to many drugs, from aspirin to anesthesia. Researchers are only beginning to understand the scope of the issue, but many believe that as a result, women experience a disproportionate share of adverse, often more severe, side effects.

“This is not just about Ambien — that’s just the tip of the iceberg,” said Dr. Janine Clayton, director for the Office of Research on Women’s Health at the National Institutes of Health. “There are a lot of sex differences for a lot of drugs, some of which are well known and some that are not well recognized.”

Until 1993, women of childbearing age were routinely excluded from trials of new drugs. When the F.D.A. lifted the ban that year, agency researchers noted that because landmark studies on aspirin in heart disease and stroke had not included women, the scientific community was left “with doubts about whether aspirin was, in fact, effective in women for these indications.”

Because so many drugs were tested mostly or exclusively in men, scientists may know little of their effects on women until they reach the market. A Government Accountability Office study found that 8 of 10 drugs removed from the market from 1997 through 2000 posed greater health risks to women.

For example, Seldane, an antihistamine, and the gastrointestinal drug Propulsid both triggered a potentially fatal heart arrhythmia more often in women than in men. Many drugs still on the market cause this arrhythmia more often in women, including antibiotics, antipsychotics, anti-malarial drugs and cholesterol-lowering drugs, Dr. Clayton said. Women also tend to use more medications than men.

The sex differences cut both ways. Some drugs, like the high blood pressure drug Verapamil and the antibiotic erythromycin, appear to be more effective in women. On the other hand, women tend to wake up from anesthesia faster than men and are more likely to experience side effects from anesthetic drugs, according to the Society for Women’s Health Research.

Women also react differently to alcohol, tobacco and cocaine, studies have found.

It’s not just because women tend to be smaller than men. Women metabolize drugs differently because they have a higher percentage of body fat and experience hormonal fluctuations and the monthly menstrual cycle. “Some drugs are more water-based and like to hang out in the blood, and some like to hang out in the fat tissue,” said Wesley Lindsey, assistant professor of pharmacy practice at Auburn University, who is a co-author of a paper on sex-based differences in drug activity.

“If the drug is lipophilic” — attracted to fat cells — “it will move into those tissues and hang around for longer,” Dr. Lindsey added. “The body won’t clear it as quickly, and you’ll see effects longer.”

There are also sex differences in liver metabolism, kidney function and certain gastric enzymes. Oral contraceptives, menopause and post-menopausal hormone treatment further complicate the picture. Some studies suggest, for example, that when estrogen levels are low, women may need higher doses of drugs called angiotensin receptor blockers to lower blood pressure, because they have higher levels of proteins that cause the blood vessels to constrict, said Kathryn Sandberg, director of the Center for the Study of Sex Differences in Health, Aging and Disease at Georgetown.

Many researchers say data on these sex differences must be gathered at the very beginning of a drug’s development — even before trials on human subjects begin.

“The path to a new drug starts with the basic science — you study an animal model of the disease, and that’s where you discover a drug target,” Dr. Sandberg said. “But 90 percent of researchers are still studying male animal models of the disease.”

There have been improvements. In an interview, Dr. Robert Temple, with the Center for Drug Evaluation and Research at the F.D.A., said the agency’s new guidelines in 1993 called for studies of sex differences at the earliest stages of drug development, as well as for analysis of clinical trial data by sex.

He said early research on an irritable bowel syndrome drug, alosetron (Lotronex), suggested it would not be effective in men. As a result, only women were included in clinical trials, and it was approved only for women. (Its use is restricted now because of serious side effects.)

But some scientists say drug metabolism studies with only 10 or 15 subjects are too small to pick up sex differences. Even though more women participate in clinical trials than in the past, they are still underrepresented in trials for heart and kidney disease, according to one recent analysis, and even in cancer trials.

“The big problem is we’re not quite sure how much difference this makes,” Dr. Lindsey said. “We just don’t have a good handle on it.”

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Readers may submit comments or questions for The Consumer by e-mail to consumer@nytimes.com.

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The Consumer: The Drug-Dose Gender Gap

Most sleeping pills are designed to knock you out for eight hours. When the Food and Drug Administration was evaluating a new short-acting pill for people to take when they wake up in the middle of the night, agency scientists wanted to know how much of the drug would still be in users’ systems come morning.

Blood tests uncovered a gender gap: Men metabolized the drug, Intermezzo, faster than women. Ultimately the F.D.A. approved a 3.5 milligram pill for men, and a 1.75 milligram pill for women.

The active ingredient in Intermezzo, zolpidem, is used in many other sleeping aids, including Ambien. But it wasn’t until earlier this month that the F.D.A. reduced doses of Ambien for women by half.

Sleeping pills are hardly the only medications that may have unexpected, even dangerous, effects in women. Studies have shown that women respond differently than men to many drugs, from aspirin to anesthesia. Researchers are only beginning to understand the scope of the issue, but many believe that as a result, women experience a disproportionate share of adverse, often more severe, side effects.

“This is not just about Ambien — that’s just the tip of the iceberg,” said Dr. Janine Clayton, director for the Office of Research on Women’s Health at the National Institutes of Health. “There are a lot of sex differences for a lot of drugs, some of which are well known and some that are not well recognized.”

Until 1993, women of childbearing age were routinely excluded from trials of new drugs. When the F.D.A. lifted the ban that year, agency researchers noted that because landmark studies on aspirin in heart disease and stroke had not included women, the scientific community was left “with doubts about whether aspirin was, in fact, effective in women for these indications.”

Because so many drugs were tested mostly or exclusively in men, scientists may know little of their effects on women until they reach the market. A Government Accountability Office study found that 8 of 10 drugs removed from the market from 1997 through 2000 posed greater health risks to women.

For example, Seldane, an antihistamine, and the gastrointestinal drug Propulsid both triggered a potentially fatal heart arrhythmia more often in women than in men. Many drugs still on the market cause this arrhythmia more often in women, including antibiotics, antipsychotics, anti-malarial drugs and cholesterol-lowering drugs, Dr. Clayton said. Women also tend to use more medications than men.

The sex differences cut both ways. Some drugs, like the high blood pressure drug Verapamil and the antibiotic erythromycin, appear to be more effective in women. On the other hand, women tend to wake up from anesthesia faster than men and are more likely to experience side effects from anesthetic drugs, according to the Society for Women’s Health Research.

Women also react differently to alcohol, tobacco and cocaine, studies have found.

It’s not just because women tend to be smaller than men. Women metabolize drugs differently because they have a higher percentage of body fat and experience hormonal fluctuations and the monthly menstrual cycle. “Some drugs are more water-based and like to hang out in the blood, and some like to hang out in the fat tissue,” said Wesley Lindsey, assistant professor of pharmacy practice at Auburn University, who is a co-author of a paper on sex-based differences in drug activity.

“If the drug is lipophilic” — attracted to fat cells — “it will move into those tissues and hang around for longer,” Dr. Lindsey added. “The body won’t clear it as quickly, and you’ll see effects longer.”

There are also sex differences in liver metabolism, kidney function and certain gastric enzymes. Oral contraceptives, menopause and post-menopausal hormone treatment further complicate the picture. Some studies suggest, for example, that when estrogen levels are low, women may need higher doses of drugs called angiotensin receptor blockers to lower blood pressure, because they have higher levels of proteins that cause the blood vessels to constrict, said Kathryn Sandberg, director of the Center for the Study of Sex Differences in Health, Aging and Disease at Georgetown.

Many researchers say data on these sex differences must be gathered at the very beginning of a drug’s development — even before trials on human subjects begin.

“The path to a new drug starts with the basic science — you study an animal model of the disease, and that’s where you discover a drug target,” Dr. Sandberg said. “But 90 percent of researchers are still studying male animal models of the disease.”

There have been improvements. In an interview, Dr. Robert Temple, with the Center for Drug Evaluation and Research at the F.D.A., said the agency’s new guidelines in 1993 called for studies of sex differences at the earliest stages of drug development, as well as for analysis of clinical trial data by sex.

He said early research on an irritable bowel syndrome drug, alosetron (Lotronex), suggested it would not be effective in men. As a result, only women were included in clinical trials, and it was approved only for women. (Its use is restricted now because of serious side effects.)

But some scientists say drug metabolism studies with only 10 or 15 subjects are too small to pick up sex differences. Even though more women participate in clinical trials than in the past, they are still underrepresented in trials for heart and kidney disease, according to one recent analysis, and even in cancer trials.

“The big problem is we’re not quite sure how much difference this makes,” Dr. Lindsey said. “We just don’t have a good handle on it.”

---

Readers may submit comments or questions for The Consumer by e-mail to consumer@nytimes.com.

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State of the Art: The BlackBerry, Rebuilt, Lives to Fight Another Day

I’m sorry. I was wrong.

This apology is for the bespectacled student at my talk in Cleveland, and the lady in the red dress in Florida, and anyone else who’s recently asked me about the future of the BlackBerry. I told all of them the same thing: that it’s doomed.

That wasn’t an outrageous opinion. The BlackBerry’s share of the smartphone market is a dismal 2.9 percent, down from 85 percent a few years ago. Its stock has crashed almost 90 percent from its 2008 peak. In the last two years, the BlackBerry’s maker, Research in Motion, released a disastrous tablet, laid off thousands of employees and fired its C.E.O.’s. The whole operation seemed to be one gnat-sneeze away from total collapse.

The company — which changed its name on Wednesday to simply BlackBerry — kept saying that it had a miraculous new BlackBerry in the wings with a new operating system called BlackBerry 10. But it was delayed and delayed and delayed. Nobody believed anything the company said anymore. Besides — even if there were some great phone, what prayer did BlackBerry have of catching up to the iPhone and Android phones now? Even Microsoft, with its slick, quick Windows Phone, hasn’t managed that trick.

Well, BlackBerry’s Hail Mary pass, its bet-the-farm phone, is finally here. It’s the BlackBerry Z10, and guess what? It’s lovely, fast and efficient, bristling with fresh, useful ideas.

And here’s the shocker — it’s complete. The iPhone, Android and Windows Phone all entered life missing important features. Not this one; BlackBerry couldn’t risk building a lifeboat with leaks. So it’s all here: a well-stocked app store, a music and movie store, Mac and Windows software for loading files, speech recognition, turn-by-turn navigation, parental controls, copy and paste, Find My Phone (with remote-control lock and erase) and on and on.

The hardware is all here, too. The BlackBerry’s 4.2-inch screen is even sharper than the iPhone’s vaunted Retina display (356 pixels per inch versus 326). Both front and back cameras can film in high definition (1080p back, 720p front).

The thin, sleek, black BlackBerry has 16 gigabytes of storage, plus a memory card slot for expansion. Its textured back panel pops off easily so that you can swap batteries. It will be available from all four major carriers — Verizon, AT&T, Sprint and T-Mobile — and Verizon said it would charge $200 with a two-year contract.

Some of BlackBerry 10’s ideas are truly ingenious. A subtle light blinks above the screen to indicate that something — a text, an e-mail message, voice mail, a Facebook post — is waiting for you. Without even pressing a physical button, you swipe up the screen; the Lock screen lifts like a drape as you slide your thumb, revealing what’s underneath. It’s fast and cool.

There are no individual app icons for Messages or Mail. Instead, all communication channels (including Facebook, Twitter and phone calls) are listed in the Hub — a master in-box list that appears at the left edge when you swipe inward. Each reveals how many new messages await and offers a one-tap jump into the corresponding app. It’s a one-stop command center that makes eminent sense.

The BlackBerry’s big selling point has always been its physical keyboard. The company says it will, in fact, sell a model with physical keys (and a smaller screen) called the Q10.

But you might not need it. On the all-touch-screen model, BlackBerry has come up with a mind-bogglingly clever typing system. Stay with me here:

As you type a word, tiny, complete words appear over certain on-screen keys — guesses as to the word you’re most likely to want. If you’ve typed “made of sil,” for example, the word “silicone” appears over the letter I key, “silver” over the V, and “silk” over the K. You can fling one of these words into your text by flicking upward from the key — or ignore it and keep typing.

How well does it work? In this passage, the only letters I actually had to type are shown in bold. The BlackBerry proposed the rest: “I’m going to have to cancel for tonight. There is a really good episode of Dancing With the Stars on.”

I type 20 characters; it typed 61 for me.

But wait, there’s more. The more you use the BlackBerry, the more it learns your way of writing. When I tried that same passage later, I typed only one letter: the I in “I’m.” Thereafter, the phone predicted each successive word in those sentences, requiring no letter-key presses at all. Freaky and brilliant and very, very fast.

There’s speech recognition, too. Hold in the Play/Pause key to get the Z10’s Siri-like assistant. Siri-like in concept, that is — you can say “send an e-mail to Harvey Smith,” “schedule an appointment” and a few other things — but it’s slower, less accurate and far narrower in scope. You can also speak to type, but the accuracy is so bad, you won’t use it.

This article has been revised to reflect the following correction:

Correction: January 30, 2013

An earlier version of this column reported incorrect information on the amount that cellphone carriers would charge for the new BlackBerry Z10. AT&T, Sprint and T-Mobile said they would announce pricing information in the future; they have not announced they will charge $200 with a two-year contract (as Verizon has).    

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Morsi Rejects Calls for New Unity Government in Egypt

Markus Schreiber/Associated Press

Chancellor Angela Merkel of Germany, center left, and President Mohammed Morsi of Egypt, center right, reviewed an honor guard on Wednesday before their talks at the chancellery in Berlin.

BERLIN — President Mohamed Morsi of Egypt, meeting with Chancellor Angela Merkel on Wednesday, rejected calls for a new unity government in response to the violent demonstrations rocking his country and defended his decision to impose a state of emergency and curfew in three cities.

“In Egypt there is a stable government working day and night in the interest of all Egyptians,” Mr. Morsi said. A new government will not be formed before the upcoming parliamentary election, Mr. Morsi said.

At a moment of acute political crisis at home in Egypt, Mr. Morsi found himself on a previously scheduled visit to Berlin, where he also met with the economy minister, Philipp Rösler, and leading representatives of German businesses. Germany is Egypt’s third most important trading partner, and investment and development aid from Germany will be necessary if Egypt hopes to get back on its feet, analysts say.

His visit to Germany was controversial, with newspapers and television commentators questioning whether Egypt was on the path to democracy. In a country conscious of its responsibility for the Holocaust, Mr. Morsi’s past comments about Jews and Zionists have also raised concerns.

After the two leaders met, Mr. Morsi and Ms. Merkel held a joint news conference at the chancellery building on Wednesday afternoon. A German reporter asked Mr. Morsi about comments in which he described Zionists as “bloodsuckers” and “the descendants of apes and pigs.”

Mr. Morsi said his statements had been taken out of context. “I am not against Judaism as a religion,” he said. “I am not against Jews practicing their religion. I was talking about anybody practicing any religion who spills blood or attacks innocent people — civilians. I criticize such behavior.

“My religion instructs me to believe in all the prophets and to respect all religions as well as every person’s freedom of religion,” Mr. Morsi continued. “Everyone believes in and practices his religion the way he sees fit as long as it remains lawful in the country he lives in.”

Ms. Merkel made it clear that Germany would continue its support of Egypt’s transition to democracy only if Mr. Morsi’s government upheld certain democratic ideals.

“One thing that is important for us is that the channels of dialogue are always open with all political forces in Egypt, so that the different political forces can play their role,” Ms. Merkel said.

She said Berlin would also like to see Egypt uphold human rights, ensure the free practice of religion and establish a government based on the rule of law in exchange for Germany’s support.

Last year, Egypt received around $130 million in development aid from Berlin.

The fact that Mr. Morsi decided to travel to Berlin despite the mounting problems at home reflects how important he views his country’s relationship to Germany, said Sarah Hartmann, an Egypt expert and head of the European Union-Middle East Forum at the German Council on Foreign Relations.

“They desperately need an improvement in their economic circumstances,” Ms. Hartmann said. “It’s going worse for the people than before the revolution. Egypt needs help from abroad. It can’t solve its problems itself.”

Following his meeting with the chancellor, Mr. Morsi and a delegation of business officials were to meet with representatives of German industry to set up a bilateral trade commission. Visitors from Germany also make up a significant part of the tourism sector, which Egypt relies on. The news that armed men had attacked the Semiramis InterContinental Hotel in Cairo on Tuesday is likely to further discourage vacationers from traveling to Egypt, hindering economic recovery.

The spiraling violence in three Suez Canal cities in recent days, and demands by members of the opposition that Mr. Morsi enter into dialogue with them, overshadowed his visit to Germany.

Egypt’s top general warned that the state was in danger of collapse as a result of the violence in three Suez Canal cities, Port Said, Suez and Ismailia. They are now under a one-month state of emergency, which gives the president and the police extraordinary powers and suspends ordinary judicial process as well as most civil rights.

In response to a question from an Egyptian reporter, Mr. Morsi addressed concerns that he was using the hated legal tool favored by Hosni Mubarak, the ousted president. “I have emphasized time and again that I do not like making use of these emergency powers in the course of the transformation process,” Mr. Morsi said. “And I will never allow myself or anybody else to break the law in that regard, in any direction, no matter what the circumstances are.” He said that was why he declared states of emergency in those three cities only.

Mr. Morsi also pointed to the fact that the emergency measures were temporary and that he had given the governors of those cities the authority to reverse the decision when the situation stabilized as evidence that he was not abusing those powers.

“This measure is to protect the safety of residents and put a stop to the conflicts and criminal attacks,” Mr. Morsi said. “As soon as the situation stabilizes, this measure will be reversed.”

Mayy el Sheikh contributed reporting from Cairo, and Chris Cottrell and Victor Homola from Berlin.

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Streaming Shakes Up Music Industry’s Model for Royalties

Jim Wilson/The New York Times

Zoe Keating published on her blog the details of what she made in royalties from the Web streaming of her music. It wasn’t a lot.

Like plenty of music fans, Sam Broe jumped at the chance to join Spotify two summers ago, and he hasn’t looked back.

Spotify, which began streaming music in Sweden in 2008, lets users choose from millions of songs over the Internet free or by subscription, and is increasingly seen as representing the future of music consumption. Mr. Broe, a 26-year-old from Brooklyn, said that having all that music at his fingertips helped him trim his monthly music budget from $30 to the $10 fee he pays for Spotify’s premium service.

“The only time I download anything on iTunes is in the rare case that I can’t find it on Spotify,” he said.

A decade after Apple revolutionized the music world with its iTunes store, the music industry is undergoing another, even more radical, digital transformation as listeners begin to move from CDs and downloads to streaming services like Spotify, Pandora and YouTube.

As purveyors of legally licensed music, they have been largely welcomed by an industry still buffeted by piracy. But as the companies behind these digital services swell into multibillion-dollar enterprises, the relative trickle of money that has made its way to artists is causing anxiety at every level of the business.

Late last year, Zoe Keating, an independent musician from Northern California, provided an unusually detailed case in point. In voluminous spreadsheets posted to her Tumblr blog, she revealed the royalties she gets from various services, down to the ten-thousandth of a cent.

Even for an under-the-radar artist like Ms. Keating, who describes her style as “avant cello,” the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play.

“In certain types of music, like classical or jazz, we are condemning them to poverty if this is going to be the only way people consume music,” Ms. Keating said.

The way streaming services pay royalties represents a major shift in the economic gears that have been underlying the industry for decades.

From 78 r.p.m. records to the age of iTunes, artists’ record royalties have been counted as a percentage of a sale price. On a 99-cent download, a typical artist may earn 7 to 10 cents after deductions for the retailer, the record company and the songwriter, music executives say. One industry joke calls the flow of these royalties a “river of nickels.”

In the new economics of streaming music, however, the river of nickels looks more like a torrent of micropennies.

Spotify, Pandora and others like them pay fractions of a cent to record companies and publishers each time a song is played, some portion of which goes to performers and songwriters as royalties. Unlike the royalties from a sale, these payments accrue every time a listener clicks on a song, year after year.

The question dogging the music industry is whether these micropayments can add up to anything substantial.

“No artist will be able to survive to be professionals except those who have a significant live business, and that’s very few,” said Hartwig Masuch, chief executive of BMG Rights Management.

Spotify has 20 million users in 17 countries, with five million of them paying $5 to $10 a month to eliminate the ads seen by freeloaders.

In a recent interview, Sean Parker, a board member, said he believed Spotify would eventually attract enough subscribers to help return the music industry to its former glory — that is, to the days before Mr. Parker’s first major enterprise, Napster, came along.

“I believe that Spotify is the company that will make it succeed,” said Mr. Parker, who is also a former president of Facebook. “It’s the right model if you want to build the pot of money back up to where it was in the late ’90s, when the industry was at its peak. This is the only model that’s going to get you there.”

This article has been revised to reflect the following correction:

Correction: January 29, 2013

An earlier version of this article gave an incorrect estimate of the potential earnings of a song on Spotify’s paid tier. According to a number of music executives, Spotify generally pays 0.5 to 0.7 cent a stream for the paid tier, which results in $5,000 to $7,000 per million plays, not $5,000 to $8,000.

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Well: Ask Well: Long-Term Use of Nicotine Gum

In small doses, like those contained in the gum, nicotine is generally considered safe. But it does have stimulant properties that can raise blood pressure, increase heart rate and constrict blood vessels. One large report from 2010 found that compared to people given a placebo, those who used nicotine replacement therapies had a higher risk of heart palpitations and chest pains.

That’s one reason that nicotine gum should, ideally, be used for no more than four to six months, said Lauren Indorf, a nurse practitioner with the Cleveland Clinic’s Tobacco Treatment Center. Yet up to 10 percent of people use it for longer periods, in some cases for a decade or more she said.

Some research has raised speculation that long-term use of nicotine might also raise the risk of cancer, though it has mostly involved laboratory and animal research, and there have not been any long-term randomized studies specifically addressing this question in people. One recent report that reviewed the evidence on nicotine replacement therapy and cancer concluded that, “the risk, if any, seems small compared with continued smoking.”

Ultimately, the biggest problem with using nicotine gum for long periods is that the longer you stay on it, the longer you remain dependent on nicotine, and thus the greater your odds of a smoking relapse, said Ms. Indorf. “What if the gum is not available one day?” she said. “Your body is still relying on nicotine.”

If you find yourself using it for longer than six months, it may be time to consider switching to sugar-free gum or even another replacement therapy, like the patch or nasal spray.

“Getting people on a different regimen helps them break the gum habit and can help taper them off nicotine,” Ms. Indorf said.

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Well: Ask Well: Long-Term Use of Nicotine Gum

In small doses, like those contained in the gum, nicotine is generally considered safe. But it does have stimulant properties that can raise blood pressure, increase heart rate and constrict blood vessels. One large report from 2010 found that compared to people given a placebo, those who used nicotine replacement therapies had a higher risk of heart palpitations and chest pains.

That’s one reason that nicotine gum should, ideally, be used for no more than four to six months, said Lauren Indorf, a nurse practitioner with the Cleveland Clinic’s Tobacco Treatment Center. Yet up to 10 percent of people use it for longer periods, in some cases for a decade or more she said.

Some research has raised speculation that long-term use of nicotine might also raise the risk of cancer, though it has mostly involved laboratory and animal research, and there have not been any long-term randomized studies specifically addressing this question in people. One recent report that reviewed the evidence on nicotine replacement therapy and cancer concluded that, “the risk, if any, seems small compared with continued smoking.”

Ultimately, the biggest problem with using nicotine gum for long periods is that the longer you stay on it, the longer you remain dependent on nicotine, and thus the greater your odds of a smoking relapse, said Ms. Indorf. “What if the gum is not available one day?” she said. “Your body is still relying on nicotine.”

If you find yourself using it for longer than six months, it may be time to consider switching to sugar-free gum or even another replacement therapy, like the patch or nasal spray.

“Getting people on a different regimen helps them break the gum habit and can help taper them off nicotine,” Ms. Indorf said.

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Streaming Shakes Up Music Industry’s Model for Royalties

Jim Wilson/The New York Times

Zoe Keating published on her blog the details of what she made in royalties from the Web streaming of her music. It wasn’t a lot.

Like plenty of music fans, Sam Broe jumped at the chance to join Spotify two summers ago, and he hasn’t looked back.

Spotify, which began streaming music in Sweden in 2008, lets users choose from millions of songs over the Internet free or by subscription, and is increasingly seen as representing the future of music consumption. Mr. Broe, a 26-year-old from Brooklyn, said that having all that music at his fingertips helped him trim his monthly music budget from $30 to the $10 fee he pays for Spotify’s premium service.

“The only time I download anything on iTunes is in the rare case that I can’t find it on Spotify,” he said.

A decade after Apple revolutionized the music world with its iTunes store, the music industry is undergoing another, even more radical, digital transformation as listeners begin to move from CDs and downloads to streaming services like Spotify, Pandora and YouTube.

As purveyors of legally licensed music, they have been largely welcomed by an industry still buffeted by piracy. But as the companies behind these digital services swell into multibillion-dollar enterprises, the relative trickle of money that has made its way to artists is causing anxiety at every level of the business.

Late last year, Zoe Keating, an independent musician from Northern California, provided an unusually detailed case in point. In voluminous spreadsheets posted to her Tumblr blog, she revealed the royalties she gets from various services, down to the ten-thousandth of a cent.

Even for an under-the-radar artist like Ms. Keating, who describes her style as “avant cello,” the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play.

“In certain types of music, like classical or jazz, we are condemning them to poverty if this is going to be the only way people consume music,” Ms. Keating said.

The way streaming services pay royalties represents a major shift in the economic gears that have been underlying the industry for decades.

From 78 r.p.m. records to the age of iTunes, artists’ record royalties have been counted as a percentage of a sale price. On a 99-cent download, a typical artist may earn 7 to 10 cents after deductions for the retailer, the record company and the songwriter, music executives say. One industry joke calls the flow of these royalties a “river of nickels.”

In the new economics of streaming music, however, the river of nickels looks more like a torrent of micropennies.

Spotify, Pandora and others like them pay fractions of a cent to record companies and publishers each time a song is played, some portion of which goes to performers and songwriters as royalties. Unlike the royalties from a sale, these payments accrue every time a listener clicks on a song, year after year.

The question dogging the music industry is whether these micropayments can add up to anything substantial.

“No artist will be able to survive to be professionals except those who have a significant live business, and that’s very few,” said Hartwig Masuch, chief executive of BMG Rights Management.

Spotify has 20 million users in 17 countries, with five million of them paying $5 to $10 a month to eliminate the ads seen by freeloaders.

In a recent interview, Sean Parker, a board member, said he believed Spotify would eventually attract enough subscribers to help return the music industry to its former glory — that is, to the days before Mr. Parker’s first major enterprise, Napster, came along.

“I believe that Spotify is the company that will make it succeed,” said Mr. Parker, who is also a former president of Facebook. “It’s the right model if you want to build the pot of money back up to where it was in the late ’90s, when the industry was at its peak. This is the only model that’s going to get you there.”

This article has been revised to reflect the following correction:

Correction: January 29, 2013

An earlier version of this article gave an incorrect estimate of the potential earnings of a song on Spotify’s paid tier. According to a number of music executives, Spotify generally pays 0.5 to 0.7 cent a stream for the paid tier, which results in $5,000 to $7,000 per million plays, not $5,000 to $8,000.

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Departing South Korean Leader Creates Furor With PardonsDeparting South Korean Leader Creates Furor With Pardons

SEOUL, South Korea — With less than one month left in office, the departing president, Lee Myung-bak, of South Korea granted special pardons on Tuesday to political allies, a longtime friend and dozens of others who have been convicted of corruption and other crimes. The pardons ignited a rare quarrel between the country’s outgoing president and president-elect.

The office of the incoming president, Park Geun-hye, had warned Mr. Lee for days not to “abuse his presidential power” by granting pardons in his last days in office that would “go against the will of the people.”

Mr. Lee ignored that appeal. “This is not an abuse of presidential authority,” Mr. Lee was quoted by his offices as saying during a cabinet meeting on Tuesday. “It is carried out according to law and procedure.” His office said Mr. Lee noted that far fewer people have been granted presidential clemency during his five years in office than under his predecessors.

The highly unusual dispute between Mr. Lee and Ms. Park, who are members of the governing Saenuri Party, rekindled a long-running controversy in South Korea over the president’s clemency power. Presidents typically issue pardons several times during their terms, often just before national holidays, and hundreds or thousands of people at a time may be freed from prison or have restored civil rights that were revoked by a criminal conviction, like the right to run for political office. But the beneficiaries have often been prominent politicians, big businessmen and close associates of the president. Civic groups and others complain that such pardons help foster persistent corruption among the country’s political and business elite by allowing the well-connected to escape justice.

On the campaign trail, candidates for president often warn that people convicted of corruption should not expect a pardon. But once elected, they invariably announce a special amnesty near the end of the single five-year term they are allowed under the Constitution.

Mr. Lee, whose term ends Feb. 25, continued that pattern with special pardons for 55 people on Tuesday, including Chun Shin-il, a businessman and longtime friend, and Choi See-joong, a close ally and former cabinet member. Both were convicted of bribery and have served less than half of their prison terms.

The pardons also erased the criminal records of two allies of Mr. Lee who were convicted of bribery but avoided prison terms: Park Hee-tae, a former National Assembly speaker, and Kim Hyo-jae, a former senior aide.

Ms. Park’s spokesman, Yoon Chang-jung, assailed the step. “Pushing ahead with pardoning those involved in irregularities and corruption will receive a national reproach,” Mr. Yoon said on Tuesday. “President Lee should bear all responsibility.”

The Democratic United Party, the main opposition group, raised suspicions that Ms. Park’s criticism of Mr. Lee was insincere and meant to shield her from any public anger over the pardons. In fact, a close ally of Ms. Park was among those pardoned on Tuesday.

“We are appalled by the brazen arrogance, self-righteousness and lack of communication that President Lee is demonstrating until his last day in office,” the party’s spokesman, Jung Sung-ho, said in a statement. “President-elect Park Geun-hye should be held responsible, too, for doing nothing to stop the pardons except uttering a few words of criticism.”

Ms. Park’s transition team was thrown into disarray on Tuesday when her choice for prime minister withdrew his name because of reports raising suspicions that he and his family accumulated a fortune through real-estate speculation. The nominee, Kim Yong-joon, also headed the transition team.

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