Software guru McAfee did not have heart attack: lawyer

GUATEMALA CITY (Reuters) - Software pioneer John McAfee did not have a heart attack in Guatemala as originally thought, but is suffering from stress and hypertension, his lawyer Telesforo Guerra said on Thursday. "He never had a heart attack. Nothing like that," Guerra said in Guatemala City. "I'm not a doctor. I'm just telling you what the doctors told me. He was suffering from stress, hypertension and tachycardia (an abnormally rapid heartbeat)." After being rushed to a hospital in an ambulance on Thursday, McAfee, 67, was later spirited out of the building out of sight of reporters and into a police patrol car, Guerra said. McAfee, who is fighting deportation from Guatemala, was detained on Wednesday after crossing illegally into the country from neighboring Belize. Police in Belize want to question McAfee in connection with his neighbor's murder. Earlier, Guerra said McAfee had suffered two mild heart attacks in the morning.

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No Grammy love for Justin Bieber, One Direction

LOS ANGELES (Reuters) - Irate fans of Justin Bieber and boy band One Direction took to social media on Thursday to voice their outrage after being snubbed by the Grammys for a chance to win the biggest honors in the music industry. Indie-pop band fun and rapper Frank Ocean led the 2013 nominations, tying with The Black Keys, Mumford & Sons, Jay-Z and Kanye West for six nods. But The Recording Academy overlooked some of the year's biggest and most commercially successful artists in Wednesday's nominations. While Bieber, 18, who won three American Music Awards in November, stayed quiet on his omission, his manager Scooter Braun took to Twitter. "Grammy board u blew it on this one. the hardest thing to do is transition, keep the train moving. The kid delivered. Huge successful album, sold out tour, and won people over. ... This time he deserved to be recognized," Braun posted in a series of tweets. Many of Bieber's 31 million Twitter fans quickly followed suit, with hashtags such as #BieberForGrammys trending on the micro-blogging service. The Canadian singer, who has never won a Grammy, in June released album "Believe," showcasing a more grown-up image. The album, which produced top 10 hits "Boyfriend" and "As Long As You Love Me," has sold more than 1.1 million copies. British boy band One Direction was also left empty-handed despite their debut album "Up All Night" having topped the Billboard 200 album chart. The quintet has performed sold-out shows across the world and won three MTV video music awards earlier this year. The Grammy Awards are voted on by members of The Recording Academy and recognize achievement in 81 categories. Lady Gaga, rapper Nicki Minaj and Korea's Psy also failed to snag any nominations. While Gaga hasn't released new music this year, focusing on her global tour, Minaj released "Pink Friday: Roman Reloaded," which topped the Billboard 200 chart and spawned singles such as "Starships." Psy may have YouTube's most watched video ever with "Gangnam Style," - over 897 million views - but he missed out on becoming the first Korean artist to receive a Grammy nod. The Grammy Awards will be handed out at a live performance show and ceremony on February 10 in Los Angeles.

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Peer-to-peer lenders welcome step towards regulation

LONDON (Reuters) - The peer-to-peer lending industry has welcomed a commitment by the British government to regulate the internet-based financiers, describing it as a "watershed moment". So-called crowdfunding providers and peer-to-peer lenders, which help businesses and individuals to raise cash from members of the public, had said that rules tailored to more traditional markets were holding back development of a vital source of finance. But from April 2014 peer-to-peer lenders, such as Zopa and Funding Circle, will be regulated by the new Financial Conduct Authority (FCA) and consultation will begin early next year to decide how the new rules will work, the Treasury reiterated on Friday after an announcement in parliament last month. "We have always strongly believed that introducing proportionate regulation was necessary to enable the sector to continue to flourish," the Peer-to-Peer Finance Association said. "We are committed to working closely with the government and the Financial Conduct Authority over the coming months to build the right framework for our future." The crowdfunding industry has developed in response to reduced bank lending to small and medium-sized businesses because of tougher capital rules and greater regulatory scrutiny. ALTERNATIVE MODELS A host of alternative financing models have cropped up online, many allowing individuals to lend to, or invest in, companies with sums from as little as 10 pounds ($16). Massolution, a research and advisory firm specializing in the sector, says that 1.2 billion euros ($1.6 billion) was raised globally from crowdfunding last year. Though some websites have tried to fit their operations within existing regulation, most remain largely outside it. Part of the problem in drawing up appropriate regulation is the wide range of activities involved. Some offer debt, some equity, while others seek donations for charity or funding for creative projects in return for some non-financial reward. With little or no expected returns from the latter, the main focus on the need for regulation has been around equity crowdfunding and peer-to-peer lending. The government, keen to improve the flow of finance to small businesses to boost the sluggish economy, has also set up a working group to look at all aspects of policy on such websites. As well as making sure that individuals are aware of the inherent risk involved with putting money in start-ups, the industry wants to ensure that platforms vet businesses adequately to avoid scams. "Regulation is on its way," Susan Kramer, a Liberal Democrat member of the British parliament's upper house, said at an industry summit on Friday. "It is not a question of 'will there be regulation?', it is a question of 'will it be the right regulation?'" LOST IN THE CROWD Britain's Financial Services Authority (FSA) warned in August that inexperienced investors should be aware of the risks when using crowdfunding websites. A few days later United States securities regulators put crowdfunding at the top of their annual investment scams list. At the moment, the FSA considers authorization of equity crowdfunding schemes case by case, it said. Views differ about how to tackle these risks without stifling an increasingly important source of funding, and the matter is complicated by the varying rules already in place in different countries across Europe. Measures taken by Seedrs, the only crowdfunding website to have received FSA approval, include the requirement for investors to pass a test to show that they understand the risks. "It is hard to come up with a whole securities regulation; sometimes it does have to be a bit incremental and adaptive," Seedrs founder Jeff Lynn said. "There is no question at all that this is going to be a space that will continue to move." Some would like the operation of such platforms to be a distinct regulated activity, but others argue for smaller steps, such as a cap on the sums that people can invest or lend. Though the introduction of a separate regulated activity could still be some way off, lawyer and co-founder of peer-to-peer site Zopa, Simon Deane-Johns, said that increased engagement with government and regulators was encouraging. "Over the next year or two it should become progressively easier to set up a platform," he said. ($1 = 0.6214 British pounds) ($1 = 0.7700 euros)

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SEC wrestles with Internet age in Netflix case

WASHINGTON (Reuters) - A U.S. regulatory probe of Netflix Inc over disclosures made on its chief executive's Facebook page could prove an important test of whether a rule designed to prevent leaks to analysts can translate to the social media age. The movie and TV streaming service revealed on Thursday that it may face action from the Securities and Exchange Commission if the agency determines the comments from CEO Reed Hastings violate a rule that requires information to be disclosed to investors at the same time. Hastings' Facebook page had more than 200,000 subscribers, including reporters and analysts, when he told them on July 3 that the company had hit 1 billion hours viewed in June. But the case may not hinge on whether or not his page qualifies as a public dissemination. Instead, it may come down to two other issues. One, whether the information was material to investors. And two, if it was material, whether investors knew that Hastings' Facebook page was a venue to release important company news. As evidence of materiality, the SEC could point to statements Hastings made earlier in the year highlighting milestones, including hours streamed, as metrics investors should watch. But the company contends the July 3 comments were not material. It says that the company posted a blog entry a few weeks earlier that said the company was approaching that milestone. Also, Netflix General Counsel David Hyman testified before a U.S. House of Representatives committee on June 27, and said at the beginning of his testimony that Netflix "delivers close to a billion hours of streaming movies and TV shows to its consumers every month." Such prior disclosure could hurt any SEC case. "Whether what he said is materially different from what the company has already disseminated, that may be a real challenge for the commission to maintain that position in court," said former SEC lawyer Eugene Goldman who is now with McDermott Will & Emery. But movements of the company's stock price could bolster an SEC case if the agency can prove the stock jumped on the news. Netflix attributed the jump in its stock price to a positive analyst report released the night prior to Hastings' Facebook post. The stock closed at $67.85 on July 2, and opened one percent higher the next day at $68.49, on a positive report from Citigroup. The stock closed at $72.04 on July 3, a six percent jump that would be unusual from an analyst report alone. 'LIVING IN THE REAL WORLD' The second issue of whether Hastings' Facebook page was a known source of material company news goes to the heart of whether the SEC's rules - and its interpretation of them - are outdated. SEC adopted the rule at issue, Regulation Fair Disclosure, or Reg FD, in 2000 over concerns that companies were meeting with small groups of analysts or institutional investors and disclosing material information to them. The concern was that "shortly after these types of meetings, trading would take place on the basis of such information," Goldman said. "This seems a lot different from that." The new potential action raises questions about whether the rule was designed to address disclosures like the one made by Hastings. "There's a huge divide between CEOs living in the real world and the financial industry, which lives behind regulatory walls. Reg FD is built for the old way of communicating from behind these walls," said Howard Lindzon, a hedge fund manager and founder and CEO of StockTwits, a social network for traders and investors to share real-time ideas and information about stocks. Reg FD does not delve into the use of social media for disclosing information to investors. But the SEC issued guidance on the subject in August 2008. That guidance states that companies can use websites to disclose information as long as they are a "recognized channel of distribution." To determine that threshold, the SEC lists factors companies should weigh, including whether their site is "posted and accessible" and also whether "the company has made investors and the markets aware that it will post important information" on the website. Netflix may have hurt itself on this point, if the SEC is able to prove that the information was material. Hastings acknowledged in a blog posting on Thursday that the company does not "use Facebook and other social media to get material information to investors." The SEC is likely to home in on that comment as it continues its case against the company. But Elon Musk, the CEO of Tesla Motors who has posted company-related developments on his Twitter feed, said it is hard to believe that the SEC could consider a CEO's Facebook post to be a narrow release. He noted that reporters regularly follow companies' and executives' social media posts. "To consider a press release to be a more public venue than a Facebook or Twitter account where someone is followed by hundreds of thousands of people, including the press themselves, is simply untrue," Musk said in an email.

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Exclusive: Google to replace M&A chief

SAN FRANCISCO (Reuters) - Google Inc is replacing the head of its in-house mergers and acquisitions group, David Lawee, with one of its top lawyers, according to a person familiar with the matter. Don Harrison, a high-ranking lawyer at Google, will replace Lawee as head of the Internet search company's corporate development group, which oversees mergers and acquisitions, said the source, who spoke anonymously because he was not authorized to speak publicly. Google is also planning to create a new late-stage investment group that Lawee will oversee, the source said. Google declined to comment. Lawee and Harrison could not immediately be reached for comment. One of the Internet industry's most prolific acquirers, Google has struck more than 160 deals to acquire companies and assets since 2010, according to regulatory filings. Many of Google's most popular products, including its online maps and Android mobile software, were created by companies or are based on technology that Google acquired. Harrison, Google's deputy general counsel, will head up the M&A group at a time when the company is still in the process of integrating its largest acquisition, the $12.5 billion purchase of smartphone maker Motorola Mobility, which closed in May. And he takes over at a time when the Internet search giant faces heightened regulatory scrutiny, with the U.S. Federal Trade Commission and the European Commission conducting antitrust investigations into Google's business practices. Several recent Google acquisitions have undergone months of regulatory review before receiving approval. As deputy general counsel, Harrison has been deeply involved in the company's regulatory issues and many of its acquisitions. He joined Google more than five years ago and has completed more than 70 deals at the company, according to biographical information on the Google Ventures website. Harrison is an adviser to Google Ventures, the company's nearly four-year old venture division which provides funding for start-up companies. While most of Google's acquisitions are small and mid-sized deals that do not meet the threshold for disclosure of financial terms, Google has a massive war chest of $45.7 billion in cash and marketable securities to fund acquisitions. Lawee, who took over the M&A group in 2008, has had hits and misses during his tenure. Google shut down social media company Slide one year after acquiring it for $179 million, for example. The planned late-stage investment group has not been finalized, the source said. The fund might operate separately from Google Ventures, according to the source. "Think of it as a private equity fund inside of Google," the source said. The company recently said it would increase the cash it allocates to Google Ventures to $300 million a year, up from $200 million, potentially helping it invest in later-stage financing rounds. Google finished Friday's regular trading session down 1 percent, or $6.92, at $684.21. (Reporting By Alexei Oreskovic; editing by Carol Bishopric and Jim Loney)

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