Public Buses Across Country Quietly Adding Microphones to Record Passenger Conversations

Transit authorities in cities across the country are quietly installing microphone-enabled surveillance systems on public buses that would give them the ability to record and store private conversations, according to documents obtained by a news outlet.

The systems are being installed in San Francisco, Baltimore, and other cities with funding from the Department of Homeland Security in some cases, according to the Daily, which obtained copies of contracts, procurement requests, specs and other documents.

The use of the equipment raises serious questions about eavesdropping without a warrant, particularly since recordings of passengers could be obtained and used by law enforcement agencies.

It also raises questions about security, since the IP audio-video systems can be accessed remotely via a built-in web server (.pdf), and can be combined with GPS data to track the movement of buses and passengers throughout the city.

According to the product pamphlet for the RoadRecorder 7000 system made by SafetyVision (.pdf), “Remote connectivity to the RoadRecorder 7000 NVR can be established via the Gigabit Ethernet port or the built-in 3G modem. A robust software ecosystem including LiveTrax vehicle tracking and video streaming service combined with SafetyNet central management system allows authorized users to check health status, create custom alerts, track vehicles, automate event downloads and much more.”

The systems use cables or WiFi to pair audio conversations with camera images in order to produce synchronous recordings. Audio and video can be monitored in real-time, but are also stored onboard in blackbox-like devices, generally for 30 days, for later retrieval. Four to six cameras with mics are generally installed throughout a bus, including one near the driver and one on the exterior of the bus.

Cities that have installed the systems or have taken steps to procure them include San Francisco, California; Eugene, Oregon; Traverse City, Michigan; Columbus, Ohio; Baltimore Maryland; Hartford, Connecticut; and Athens, Georgia.

San Francisco transit authorities recently approved a $5.9 million contract to install an audio surveillance system on 357 buses and vintage trolley cars, paid for in full with a grant from DHS. The contract includes the option to expand the equipment to an additional 600 vehicles.

Concord, New Hampshire also used part of a $1.2 million economic stimulus grant to install its new video/audio surveillance system on buses, according to the Daily.

Transit officials say the systems will help improve the safety of passengers and drivers and resolve complaints from riders. But privacy and security expert Ashkan Soltani told the Daily that the audio could easily be coupled with facial recognition systems or audio recognition technology to identify passengers caught on the recordings.

In Eugene, Oregon, the Daily found, transit officials requested microphones that would be capable of “distilling clear conversations from the background noise of other voices, wind, traffic, windshields wipers and engines” and also wanted at least five audio channels spread across each bus that would be “paired with one or more camera images and recorded synchronously with the video for simultaneous playback.”

In 2009, transit officials in Baltimore, Maryland, backed down briefly from plans to install microphones in buses in that city after civil liberties groups complained that the systems would violate wiretapping laws and constitutional protections against illegal search and seizure. Transit authorities then asked the state’s attorney general to weigh-in on whether the systems violated wiretapping laws. After the attorney general indicated that signs warning passengers of the surveillance would help combat any legal challenges, transit officials pressed forward with their plans last month and announced the installation of an audio recording system on 10 public buses. The city plans to roll out the system on at least 340 additional buses.

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Tech guru McAfee’s legal appeals win him respite in Guatemala

GUATEMALA CITY (Reuters) – U.S. software pioneer John McAfee, facing deportation from Guatemala to Belize to answer questions over the death of a neighbor, has bought himself some time with legal appeals, the Guatemalan government said on Sunday.

McAfee’s lawyers have filed a request with a local court to grant him leave to stay in Guatemala until his legal appeals against deportation have been settled, which could take months.

“The government of Guatemala respects the courts and we have to wait for them to make a decision,” said Francisco Cuevas, a spokesman for the Guatemalan government.

The government initially said it would deport him straight away after rejecting McAfee’s request for asylum on Thursday.

Guatemala has been holding the former Silicon Valley millionaire since he was arrested on Wednesday for illegally entering the country with his 20-year-old Belizean girlfriend.

Officials in Belize want to question McAfee as a “person of interest” in the killing of fellow American Gregory Faull, his neighbor on the Caribbean island of Ambergris Caye.

The court has up to 30 days to rule on his request, but McAfee’s lawyers said on Sunday they expect a ruling in the American’s favor as early as Monday.

“We are filing a series of papers with the court to attempt to keep me here long enough for the world to see the injustice of sending me back to Belize,” McAfee said in an online news conference on Sunday evening.

McAfee has been evading Belizean officials for nearly a month, saying he fears they want to kill him, and that he is being persecuted for speaking out about corruption in the country’s ruling party. Belize’s prime minister has rejected McAfee’s claims, calling him paranoid and “bonkers.”

McAfee’s attorney, Telesforo Guerra, said that if his request with the court is successful, McAfee would be allowed to stay in the country until the legal suits have been resolved.

His lawyers have filed several injunctions against government officials, alleging McAfee’s rights were violated because his asylum request was not given proper consideration.

McAfee said on Saturday he wanted to return to the United States, and Guerra said he had filed a motion that would require Guatemalan authorities to deport him there and not to Belize.

The eccentric tech pioneer, who made his fortune from the anti-virus software bearing his name, has been chronicling life on the run in a blog, www.whoismcafee.com.

(Editing by Dave Graham; editing by Todd Eastham)

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Mind: A Compromise on Defining and Diagnosing Mental Disorders

They plotted a revolution, fell to debating among themselves, and in the end overturned very little except their own expectations.

But the effort itself was a valuable guide for anyone who has received a psychiatric diagnosis, or anyone who might get one.

This month, the American Psychiatric Association announced that its board of trustees had approved the fifth edition of the association’s influential diagnostic manual — the so-called bible of mental disorders — ending more than five years of sometimes acrimonious, and often very public, controversy.

The committee of doctors appointed by the psychiatric association had attempted to execute a paradigm shift, changing how mental disorders are conceived and posting its proposals online for the public to comment. And comment it did: Patient advocacy groups sounded off, objecting to proposed changes in the definitions of depression and Asperger syndrome, among other diagnoses. Outside academic researchers did, too. A few committee members quit in protest.

The final text, which won’t be fully available until publication this spring, has already gotten predictably mixed reviews. “Given the challenges in a field where objective lines are hard to draw, they did a solid job,” said Dr. Michael First, a psychiatrist at Columbia who edited a previous version of the manual and was a consultant on this one.

Others disagreed. “This is the saddest moment in my 45-year career of practicing, studying and teaching psychiatry,” wrote Dr. Allen Frances, the chairman of a previous committee who has been one of the most vocal critics, in a blog post about the new manual, the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, or DSM5.

Yet many experts inside and outside the process said the final document was not radically different from the previous version, and its lessons more mundane than the rhetoric implied. The status quo is hard to budge, for one. And when changes do happen, they are not necessarily the ones that were intended.

The new manual does extend the reach of psychiatry in some areas, as many critics feared it might. Hoarding is now a mental disorder (previously it was considered a symptom of obsessive-compulsive behavior). “Premenstrual dysphoric disorder,” a severe form of premenstrual syndrome, is also new (it was previously in the appendix).

And binge-eating disorder (also formerly in the appendix), a kind of severe, highly distressing gluttony, is now a full-blown diagnosis. This one by itself could tag millions of people considered healthy, if often overindulgent, with a psychiatric label, some experts said.

But the deeper story is one of compromise. It is most evident in how the committee handled three of the thorniest diagnoses in psychiatry: autism, depression and pediatric bipolar disorder.

The group working on depression declared early on that it wanted to eliminate the so-called bereavement exclusion, which stated that grieving the loss of a loved one should not be considered a clinical disorder, though it shares many of the same outward signs. Grief has always been a normal reaction to death, not a kind of depression.

Advocacy and support groups, such as those representing people who have lost a child, objected furiously to the idea that the bereaved might be given a diagnosis of depression.

“This was just astonishing, that they would eliminate the exclusion, and a distortion of the research on the subject,” said Jerome Wakefield, a professor of social work and psychiatry at New York University, who did not work on the manual.

In the end the committee cut a deal. It eliminated the grief exclusion but added a note in the text, reminding doctors that any significant loss — of a job, a relationship, a home — could cause depressive symptoms and should be carefully investigated.

“It’s like they took it all back,” Dr. Wakefield said. “I don’t like the way it was done — in a footnote — but it’s there.”

The debate over autism was even more furious, and it resulted in a similar rapprochement.

From the outset, the committee intended to tighten the definition of autism and simplify it, eliminating related labels like Asperger syndrome and “pervasive developmental disorder not otherwise specified,” or PDD-NOS. The rate of diagnosis of such conditions has exploded over the past decade, in part due to the vagueness of the definitions, and the committee wanted to draw clearer boundaries.

It proposed a single “autism spectrum disorder” category, with stricter requirements.

Some outside researchers raised concerns. In January one of them, Dr. Fred Volkmar of the Yale School of Medicine, who had quit the committee in protest, presented research suggesting that 45 percent or more of people who currently had an autism or related diagnosis would not have one under the proposed revision.

Autism groups reacted immediately, fearing that the change in the diagnosis would deny services to children and families who need them.

The committee countered with its own study, suggesting that the new definition would exclude about 10 percent of people currently with a diagnosis. And again, the experts took a half step back.

The new, streamlined definition was approved, but with language that took into account a person’s diagnostic history. “It’s explicit that anyone who’s had an Asperger’s or autism or PDD-NOS diagnosis before is now included,” said Catherine Lord, a committee member who worked on the new definition and who is director of the Center for Autism and the Developing Brain in New York. “Essentially everyone gets in.”

Pediatric bipolar disorder posed a different challenge.

In the 1990s and 2000s, psychiatrists began giving aggressive, explosive children a diagnosis of bipolar disorder in increasing numbers. The trend appalled many patient advocates and doctors.

Bipolar disorder, which is characterized by episodes of depression and mania, had previously been an adult problem; now the diagnosis is given to children as young as 2 — along with powerful psychiatric drugs and tranquilizers that also cause rapid weight gain. The committee wanted to stop the trend in its tracks, said experts who were involved.

Most of the children treated for bipolar disorder did not have it, recent research found. The committee settled on an alternative label: “disruptive mood dysregulation disorder,” or D.M.D.D., which describes extreme hostility and outbursts beyond normal tantrums.

“They essentially wanted to have some place for these kids, and D.M.D.D. was all they had in their kit,” said Dr. Gabrielle Carlson, a child psychiatrist at Stony Brook University Medical Center, who provided some outside consultation. “These are mostly kids who have A.D.H.D. or what we would call oppositional defiant disorder, but with this explosive feature. They need help; you can’t wait forever. The question was what to call it, without pretending we know enough to saddle them with a lifelong diagnosis” like bipolar disorder.

D.M.D.D. has its own problems, as many experts were quick to point out. It could be a symptom of an underlying condition, as Dr. Carlson argues. It could “medicalize” frequent temper tantrums. It’s brand new, and no one knows how it will play out in practice.

But it is now in the book — because it was the best solution available, experts inside and outside of the revision process said.

From beginning to end, many experts said, the process of defining psychiatric diagnoses is very much like finding the right one for an individual: it’s a process of negotiation, in many cases.

“That’s one of the take-aways from all this, and I think it’s a good one,” Dr. Carlson said. “A diagnosis is a hypothesis. It’s a start, and you have to start somewhere. But that’s all it is.”

One of the committee’s most ambitious proposals was perhaps the least noticed: a commitment to update the book continually, when there’s good reason to, rather than once every decade or so in a giant heave. That was approved without much fanfare.

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DealBook: U.S. to Sell Last Holdings of A.I.G. Common Stock

The Treasury Department said on Monday that it planned to sell its remaining holdings of common stock in the American International Group, essentially ending taxpayers’ four-year ownership of the bailed-out insurer.

The Treasury Department said that it had begun a public offering of its 15.9 percent stake in A.I.G., amounting to about 234.2 million shares. It is the latest in a string of sales by the federal government, which has quickly reduced taxpayers’ holdings over the last two years.

All that would be left is a relatively small number of warrants that give the department the right to buy additional shares in A.I.G.

If completed, the sale would represent the achievement of a long-held goal of both the Obama administration and A.I.G. itself: ending the government’s ownership of the insurer. For the Treasury Department, it would signify a complete exit from perhaps the most controversial rescue struck during the financial crisis of 2008. In return for making up to $182 billion available to the company, the government received a stake that at its peak represented 92 percent of the company.

And for A.I.G., it would represent an unambiguous transformation into a fully private enterprise, an insurer that has clambered back from the brink of annihilation. Over the last four years, the company has sold off a number of assets in an effort to repay its bailout.

While the Treasury Department did not outline a timetable for its latest stock offering, the sale is expected to be completed quickly. Unlike in previous offerings, A.I.G. is not expected to buy back any of the shares being offered.

A spokesman for A.I.G. declined to comment.

The offering is being run by Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and JPMorgan Chase.

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3 killed, 4 wounded in Tulare County shooting

Three people were fatally shot and four others wounded, including two young children, Saturday night on the Tule River Reservation in Tulare County, authorities said.

The suspect, who fled with his two young daughters, was later shot by sheriff’s deputies and taken into custody, according to the Tulare County Sheriff’s Department. The two girls, who were among those shot, were rescued.

The incident began about 7:45 p.m. when the Sheriff’s Department received a 911 call about shots fired in the 100 block of Chimney Road of the Tule River Indian Reservation about 60 miles northeast of Bakersfield, according to a Sheriff’s Department statement.

In a trailer on the property, deputies discovered an adult male and an adult female who had been fatally shot, authorities said. A male juvenile who suffered a gunshot wound was transported to a hospital. 

At a shed on the property, deputies found another male victim who had been fatally shot, authorities said.

The suspect, identified as Hector Celaya, 31, of the Tule River Indian Reservation, fled the scene in a Jeep Cherokee with his two daughters, Alyssa, 8, and Linea, 5, authorities said. An Amber Alert was issued around 11 p.m.

Detectives used Celaya’s cellphone to locate him.

A deputy spotted the vehicle and after failing to make a traffic stop, a slow-speed pursuit began, authorities said.

The suspect eventually stopped and fired his weapon at deputies, who returned fire and struck the suspect twice, seriously wounding him, authorities said.

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Wired Science Space Photo of the Day: Star Formation in Carina

The spectacular star-forming Carina Nebula has been captured in great detail by the VLT Survey Telescope at ESO’s Paranal Observatory. This picture was taken with the help of Sebastián Piñera, President of Chile, during his visit to the observatory on 5 June 2012 and released on the occasion of the new telescope’s inauguration in Naples on 6 December 2012.

Image: ESO. Acknowledgement: VPHAS+ Consortium/Cambridge Astronomical Survey Unit [high-resolution]

Caption: ESO

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British TV astronomer Patrick Moore dies

LONDON (Reuters) – British astronomer Patrick Moore, who helped map the moon and inspired generations of star gazers with decades of television broadcasts, died on Sunday aged 89.

Moore presented BBC television‘s landmark “The Sky at Night” program for more than 50 years, making him the longest-running presenter of a single show in broadcasting history.

His old-fashioned appearance and rapid-fire delivery endeared him to television viewers and captured the imagination of future astronomers who paid tribute to the presenter and prolific author.

“Patrick would just sit in front of the camera for a whole episode … and just tell you about a constellation, about the stars, their names, their history,” British astronomer David Whitehouse told Sky News.

“It was captivating and the best example of communication and an expert sharing his enthusiasm that I have ever experienced.”

A space enthusiast from his early childhood, Moore’s television career coincided with the start of the space race between Russia and the United States.

“He was broadcasting before we actually went into space and he saw a change in our understanding of the universe,” British space scientist Maggie Aderin-Pocock told the BBC.

Moore, rarely seen without his trademark monocle, was also an enthusiastic musician and xylophone player and once accompanied a violin-playing Albert Einstein on the piano.

He never studied for a degree, building up his expertise through his own, single-minded enthusiasm, constructing an observatory in the garden of his southern England home.

His television show marked many astronomical landmarks, and he was broadcasting live when the first picture of the far side of the moon were returned by a Russian satellite.

Television schedulers were not always sympathetic to the significance of developments in space.

During the NASA Apollo 8 mission, Moore told viewers they were about to hear the voices of first men round the Moon in “one of the greatest moments in human history,” only to be interrupted by BBC switching the broadcast to a daily children’s show.

(Reporting by Tim Castle; Editing by Andrew Heavens)

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A Breakthrough Against Leukemia Using Altered T-Cells

PHILIPSBURG, Pa. — Emma Whitehead has been bounding around the house lately, practicing somersaults and rugby-style tumbles that make her parents wince.

It is hard to believe, but last spring Emma, then 6, was near death from leukemia. She had relapsed twice after chemotherapy, and doctors had run out of options.

Desperate to save her, her parents sought an experimental treatment at the Children’s Hospital of Philadelphia, one that had never before been tried in a child, or in anyone with the type of leukemia Emma had. The experiment, in April, used a disabled form of the AIDS virus to reprogram Emma’s immune system genetically to kill cancer cells.

The treatment very nearly killed her. But she emerged from it cancer-free, and seven months later is still in complete remission. She is the first child and one of the first humans ever in whom new techniques have achieved a long-sought goal — giving a patient’s own immune system the lasting ability to fight cancer.

Emma had been ill with acute lymphoblastic leukemia since 2010, when she was 5, her parents, Kari and Tom, said. She is their only child.

She is among just a dozen patients with advanced leukemia to have received the experimental treatment, which was developed at the University of Pennsylvania. Similar approaches are also being tried at other centers, including the National Cancer Institute and Memorial Sloan-Kettering Cancer Center in New York.

“Our goal is to have a cure, but we can’t say that word,” said Dr. Carl June, who leads the research team at the University of Pennsylvania. He hopes the new treatment will eventually replace bone-marrow transplantation, an even more arduous, risky and expensive procedure that is now the last hope when other treatments fail in leukemia and related diseases.

Three adults with chronic leukemia treated at the University of Pennsylvania have also had complete remissions, with no signs of disease; two of them have been well for more than two years, said Dr. David Porter. Four adults improved but did not have full remissions, and one was treated too recently to evaluate. A child improved and then relapsed. In two adults, the treatment did not work at all. The Pennsylvania researchers are presenting their results on Sunday and Monday in Atlanta at a meeting of the American Society of Hematology.

Despite the mixed results, cancer experts not involved with the research say it has tremendous promise, because even in this early phase of testing it has worked in seemingly hopeless cases.

“I think this is a major breakthrough,” said Dr. Ivan Borrello, a cancer expert and associate professor of medicine at the Johns Hopkins University School of Medicine.

Dr. John Wagner, director of pediatric blood and marrow transplantation at the University of Minnesota, called the Pennsylvania results “phenomenal,” and said they were “what we’ve all been working and hoping for but not seeing to this extent.”

A major drug company, Novartis, is betting on the Penn team, and has committed $20 million to building a research center on the Penn campus to bring the treatment to market.

Hervé Hoppenot, president of Novartis Oncology, called the research “fantastic” and said it had the potential — if the early results hold up — to revolutionize the treatment of leukemia and related blood cancers. Researchers say the same approach, reprogramming the patient’s immune system, may also be used eventually against tumors like breast and prostate cancer.

To perform the treatment, doctors remove millions of the patient’s T-cells — a type of white blood cell — and insert new genes that enable the T-cells to kill cancer cells. The new genes program the T-cells to attack B-cells, a normal part of the immune system that turns malignant in leukemia.

The altered T-cells — called chimeric antigen receptor cells — are then dripped back into the patient’s veins, and if all goes well they multiply like crazy and start destroying the cancer.

The T-cells home in on a protein called CD-19 that is found on the surface of most B-cells, whether they are healthy or malignant.

A sign that the treatment is working is that the patient becomes terribly ill, with raging fevers and chills — a reaction that oncologists call “shake and bake,” Dr. June said. Its medical name is cytokine-release syndrome, or cytokine storm, referring to the natural chemicals that pour out of cells in the immune system as they are being activated, causing fevers and other symptoms. The storm can also flood the lungs and cause perilous drops in blood pressure — effects that nearly killed Emma.

Steroids sometimes ease the reaction, but did not help Emma. Her temperature hit 105. She wound up on a ventilator, unconscious and swollen almost beyond recognition, surrounded by friends and family who had come to say goodbye.

But at the eleventh hour, a battery of blood tests gave the researchers a clue as to what might help save Emma: Her level of one of the cytokines, interleukin-6 or IL-6, had shot up a thousandfold. Doctors had never seen such a spike before and thought it might be what was making her so sick. Dr. June knew that a drug could lower IL-6 — his daughter takes it, for rheumatoid arthritis. It had never been used for a crisis like Emma’s, but there was little to lose. Her oncologist, Dr. Stephan A. Grupp, ordered the drug. The response, he said, was “amazing.”

Within hours, Emma began to stabilize. She woke up a week later, on May 2, the day she turned 7; the intensive-care staff sang “Happy Birthday.”

Since then, the research team has used the same drug, tocilizumab, in several other patients.

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As Recovery Inches Ahead, Banks Face a New Reckoning

The nation’s largest banks are facing a fresh torrent of lawsuits asserting that they sold shoddy mortgage securities that imploded during the financial crisis, potentially adding significantly to the tens of billions of dollars the banks have already paid to settle other cases.

Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages.

Estimates of potential costs from these cases vary widely, but some in the banking industry fear they could reach $300 billion if the institutions lose all of the litigation. Depending on the final price tag, the costs could lower profits and slow the economic recovery by weakening the banks’ ability to lend just as the housing market is showing signs of life.

The banks are battling on three fronts: with prosecutors who accuse them of fraud, with regulators who claim that they duped investors into buying bad mortgage securities, and with investors seeking to force them to buy back the soured loans.

“We are at an all-time high for this mortgage litigation,” said Christopher J. Willis, a lawyer with Ballard Spahr.

Efforts by the banks to limit their losses could depend on the outcome of one of the highest-stakes lawsuits to date — the $200 billion case that the Federal Housing Finance Agency, which oversees the housing twins Fannie Mae and Freddie Mac, filed against 17 banks last year, claiming that they duped the mortgage finance giants into buying shaky securities.

Last month, lawyers for some of the nation’s largest banks descended on a federal appeals court in Manhattan to make their case that the agency had waited too long to sue. A favorable ruling could overturn a decision by Judge Denise L. Cote, who is presiding over the litigation and has so far rejected virtually every defense raised by the banks, and would be cheered in bank boardrooms. It could also allow the banks to avoid federal housing regulators’ claims.

At the same time, though, some major banks are hoping to reach a broad settlement with housing agency officials, according to several people with knowledge of the talks. Although the negotiations are at a very tentative stage, the banks are broaching a potential cease-fire.

As the housing market and the nation’s economy slowly recover from the 2008 financial crisis, Wall Street is vulnerable on several fronts, including tighter regulations assembled in the aftermath of the crisis and continuing investigations into possible rigging of a major international interest rate. But the mortgage lawsuits could be the most devastating and expensive, bank analysts say.

“All of Wall Street has essentially refused to deal with the real costs of the litigation that they are up against,” said Christopher Whalen, a senior managing director at Tangent Capital Partners. “The real price tag is terrifying.”

Anticipating painful costs from mortgage litigation, the five major sellers of mortgage-backed securities set aside $22.5 billion as of June 30 just to cushion themselves against demands that they repurchase soured loans from trusts, according to an analysis by Natoma Partners.

But in the most extreme situation, the litigation could empty even more well-stocked reserves and weigh down profits as the banks are forced to pay penance for the subprime housing crisis, according to several senior officials in the industry.

There is no industrywide tally of how much banks have paid since the financial crisis to put the mortgage litigation behind them, but analysts say that future settlements will dwarf the payouts so far. That is because banks, for the most part, have settled only a small fraction of the lawsuits against them.

JPMorgan Chase and Credit Suisse, for example, agreed last month to settle mortgage securities cases with the Securities and Exchange Commission for $417 million, but still face billions of dollars in outstanding claims.

Bank of America is in the most precarious position, analysts say, in part because of its acquisition of the troubled subprime lender Countrywide Financial.

Last year, Bank of America paid $2.5 billion to repurchase troubled mortgages from Fannie Mae and Freddie Mac, and $1.6 billion to Assured Guaranty, which insured the shaky mortgage bonds.

But in October, federal prosecutors in New York accused the bank of perpetrating a fraud through Countrywide by churning out loans at such a fast pace that controls were largely ignored. A settlement in that case could reach well beyond $1 billion because the Justice Department sued the bank under a law that could allow roughly triple the damages incurred by taxpayers.

Bank of America’s attempts to resolve some mortgage litigation with an umbrella settlement have stalled. In June 2011, the bank agreed to pay $8.5 billion to appease investors, including the Federal Reserve Bank of New York and Pimco, that lost billions of dollars when the mortgage securities assembled by the bank went bad. But the settlement is in limbo after being challenged by investors. Kathy D. Patrick, the lawyer representing investors, has said she will set her sights on Morgan Stanley and Wells Fargo next.

Of the more than $1 trillion in troubled mortgage-backed securities remaining, Bank of America has more than $417 billion from Countrywide alone, according to an analysis of lawsuits and company filings. The bank does not disclose the volume of its mortgage litigation reserves.

“We have resolved many Countrywide mortgage-related matters, established large reserves to address these issues and identified a range of possible losses beyond those reserves, which we believe adequately addresses our exposures,” said Lawrence Grayson, a spokesman for Bank of America.

Adding to the legal fracas, the New York attorney general, Eric T. Schneiderman, accused Credit Suisse last month of perpetrating an $11.2 billion fraud by deceiving investors into buying shoddy mortgage-backed securities. According to the complaint, the bank dismissed flaws in the loans packaged into securities even while assuring investors that the quality was sound. The bank disputes the claims.

It is the second time that Mr. Schneiderman — who is also co-chairman of the Residential Mortgage-Backed Securities Working Group, created by President Obama in January — has taken aim at Wall Street for problems related to the subprime mortgage morass. In October, he filed a civil suit in New York State Supreme Court against Bear Stearns & Company, which JPMorgan Chase bought in 2008. The complaint claims that Bear Stearns and its lending unit harmed investors who bought mortgage securities put together from 2005 through 2007. JPMorgan denies the allegations.

Another potentially costly headache for the banks are the demands from a number of private investors who want the banks to buy back securities that violated representations and warranties vouching for the loans.

JPMorgan Chase told investors that as of the second quarter of this year, it was contending with more than $3.5 billion in repurchase demands. In the same quarter, it received more than $1.5 billion in fresh demands. Bank of America reported that as of the second quarter, it was dealing with more than $22 billion in unresolved demands, more than $8 billion of which were received during that quarter.

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Surgeon infected patients during heart procedure, Cedars-Sinai admits

A heart surgeon at Cedars-Sinai Medical Center unwittingly infected five patients during valve replacement surgeries earlier this year, causing four of the patients to need a second operation.

The infections occurred after tiny tears in the latex surgical gloves routinely worn by the doctor allowed bacteria from a skin inflammation on his hand to pass into the patients' hearts, according to the hospital. The patients survived the second operation and are still recovering, hospital officials said.

The outbreak led to investigations by the hospital and both the L.A. County and California departments of public health. The federal Centers for Disease Control and Prevention was also consulted.

Hospital officials called it a "very unusual occurrence" probably caused by an unfortunate confluence of events: the nature of the surgery, the microscopic rips in the gloves and the surgeon's skin condition. Valve replacement requires the surgeon to use thick sutures and tie more than 100 knots, which can cause extra stress on the gloves, they said.

Nevertheless, the hospital's goal is to have zero infections, said Harry Sax, vice chairman of the hospital's department of surgery. "Any hospital-acquired infection is unacceptable," he said.

The infections raise questions about what health conditions should prevent a surgeon from operating and how to get the best protection from surgical gloves. Surgeons with open sores or known infections aren't supposed to operate, but there is no national standard on what to do if they have skin inflammation, said Rekha Murthy, medical director of the hospital's epidemiology department. She added that there were also no national standards on types of gloves used, whether to wear double gloves or how many times surgeons should change those gloves during a procedure.

Healthcare-acquired infections are very common throughout the United States. Each year, infections cause 99,000 deaths in the country, including about 12,000 in California. Hospitals in the state are required to report certain infections to the California Department of Public Health. That reporting makes the public more aware of the quality of care provided at local hospitals and is an important tool for reducing infections, said Debby Rogers, deputy director of the department's Center for Health Care Quality.

Cedars-Sinai has low rates for hospital-acquired infections compared with the state and national average but has not performed as well on other surgical quality measures recently, according to the Leapfrog Group, an employer-backed nonprofit focused on healthcare quality. The organization gave the hospital a C rating last month on its national report card, down from an A in June, though it was not related to the infection outbreak.

"Clearly this hospital is making attempts to reduce infections, but they have more work to do," said Leah Binder, Leapfrog's chief executive.

Cedars-Sinai Medical Center conducts about 360 valve replacement surgeries each year and said infections occur in fewer than 1% of its cases — lower than the national average.

The hospital learned about the problem in June after three patients who had undergone valve replacement surgery showed signs of infection. Doctors diagnosed the patients with an infection called endocarditis. Concerned there might be a connection among the cases, epidemiologists analyzed the bacteria, staphylococcus epidermidis, and determined that it was an identical strain and therefore must have come from a single source. "It led to the question of gee, I wonder where it came from?" Murthy said.

Epidemiologists homed in on the surgeon with the skin inflammation. The bacteria matched, and then they made a surprising discovery: microscopic tears in the gloves typically worn by surgeons after performing valve replacement surgery. The surgeon, whose name was not released, was not allowed to operate again until he healed. He is still a member of the medical staff but no longer performs surgeries at the hospital.

The hospital soon found the same infection in two more patients. Officials also reached out to 67 patients who had heart valve replacements with the same surgeon but didn't find any other cases. One of the five infected patients was treated with antibiotics, and the other four had new valve replacement surgeries. Sax said the hospital apologized to the patients and has continued to monitor their health. The hospital has also covered the cost of their care, including follow-up treatment and all the related surgeries.

All surgeons doing valve replacements are now required to change gloves more frequently, officials said. Some surgeons are wearing double gloves during the operations, Sax said.

Following the outbreak, Cedars-Sinai did the proper follow-up to ensure the safety of their patients, said Dawn Terashita, a medical epidemiologist with L.A. County, who was notified in September. What occurred at Cedars-Sinai was an unintentional consequence of the surgery, she said.

"There is no way to keep a room entirely sterile and all the people in it sterile," she said. "You will always have risk of infection."

anna.gorman@latimes.com

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