Author tells businesses to be like Mike


























































An author of a new book has some sage advice for business leaders: Be more like Michael Jordan.

Bruce Piasecki, who penned "Doing More with Teams: The New Way to Winning," says Michael Jordan's long and storied career "is a shining example of how the best teams operate."






Jordan shouldn't be emulated just because of the Bulls star's individual success, the author says, but by the way he showed leadership and helped create a seemingly unstoppable team, meshing with different personalities such as the quiet Scottie Pippen and outrageous Dennis Rodman to create a basketball dynasty.

Those team dynamics are similar in the business world, the author says. And businesses are most successful when they are led by the right leaders and are composed of a mix of people with varying talents, he argues.

Jordan also is held up as an example in other tenets of good business teamwork the author describes.

-- Ego and individual goals have no place on teams.

"When we pin all our hopes on a single individual and ignore the context in which he or she operates, we will be disappointed," he says.

--  Failure is part of winning.

"Leaders must instill in teams a tolerance of losing," he said. "We must convey that failure is a part of life and thus a part of business."

Jordan, who helped the Chicago Bulls win six NBA championships, famously said "I've failed over and over and over again in my life, and that is why I succeed."

The book is set to be released next month but is available for pre-order on Amazon.com.




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Kelly out to early lead in race to replace Jackson in Congress









Former U.S. Rep. Debbie Halvorson is conceding defeat tonight to Robin Kelly in the special Democratic primary election to replace disgraced former U.S. Rep. Jesse Jackson Jr. in Congress.


With 55 percent of precincts reporting, Kelly had 57 percent to 19 percent for former U.S. Rep. Debbie Halvorson and 11 percent for 9th Ward Ald. Anthony Beale.


Halvorson called Kelly to concede and planned to give her concession speech shortly, according to a Halvorson aide.








The total number of votes isn’t expected to be large, however, as a storm that brought a wintry mix of snow and slush depressed turnout in the 2nd Congressional District contest.


Chicago election officials reported that as of 1:45 p.m., turnout was about 11 percent among sampled city precincts. The figures included ballots cast today and early and absentee voting.


"This puts us on course for turnout in the mid-teens," said Jim Allen, spokesman for the Chicago Board of Election Commissioners, in an e-mail. "This is to be expected with a special primary and special election. It is shaping up to be among the lowest turnouts in recent decades."


There are primaries for both political parties in the South Side and south suburban district, but the territory is so heavily Democratic that whoever emerges from the crowded Democratic field is expected to easily win the April 9 special general election.

Today's voting follows weeks of candidate forums, an accelerated campaign schedule and a flurry of TV ads from the mayor of New York. While the top-tier candidates among the 14 Democrats vying for the primary nomination are known, there also are some big unknowns. Voter turnout, already anticipated to be very low, could be exacerbated by nasty weather.

The results of early voting held between Feb. 11 and Saturday demonstrated a lack of interest in the contest, despite its ramifications in deciding who will represent voters and their disparate interests in the vast district.

A majority of the district's Democratic voters live in suburban Cook County, with an additional one-third from the South Side. The district also includes parts of eastern Will County and all of Kankakee County, and together the two regions make up slightly less than 10 percent of the Democratic vote.

In suburban Cook, 4,459 early votes were cast, with 98 percent of those voters taking Democratic ballots. Of the 11 suburban early voting locations, Matteson Village Hall, in Kelly's hometown, had the most with 1,601 voters.


In Chicago, 98 percent of the 2,768 early voters cast Democratic ballots. Only 63 early votes were cast for Republicans.

In Will, 246 voters cast early ballots, all but 40 of them Democratic votes. Kankakee County officials reported 699 early ballots, with 533 voting Democrat and 166 Republican.

"I just think if it was a regular race, then they'd look a little bit different," Kelly said of the low early voting totals. "I also think because (the special primary) came so close to the November election that there's some (voter) fatigue."

But in a large field of candidates and questionable turnout, a nomination for Congress could be decided by mere hundreds of votes. Even as forecasters sounded warnings of a Tuesday smorgasbord of wintry weather, candidates sought to energize core supporters to help get out the vote.

In an email to supporters, Kelly's campaign pleaded for volunteers to help get voters to the polls and asked for money for its get-out-the-vote field operation.


Halvorson acknowledged the early voting numbers were "paltry" and that voter turnout would be a "huge" factor Tuesday. Halvorson said she believed turnout could be driven by the district's history of scandals — including last week's guilty plea by Jackson on federal charges of illegally converting about $750,000 in campaign cash to personal use.

"I think this race has gotten so much attention and people are so angry about what the 2nd Congressional District has had to deal with over the years that they're going to take a special interest to make sure they are going to vote for someone who is completely different than what they've seen," said Halvorson, of Crete.

Halvorson also has been the target of the most extensive advertising in the contest, more than $2.2 million worth of TV and mail attacks by New York Mayor Michael Bloomberg's super political action committee, centered on her past National Rifle Association support. Bloomberg's Independence USA PAC is backing Kelly.

Beale said the low number of early ballots puts all the more importance on Election Day field efforts. He said that well-established organizations in the six city wards in the district could serve as an advantage for his campaign.

"It's just slow across the board, and that just goes to show it is going to be a very low turnout," Beale said of the early votes. "We're just making sure we're targeting our core, solid voters, and we're going to get them out to the polls and be victorious Tuesday night."

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Advanced Breast Cancer May Be Rising Among Young Women, Study Finds


The incidence of advanced breast cancer among younger women, ages 25 to 39, may have increased slightly over the last three decades, according to a study released Tuesday.


But more research is needed to verify the finding, which was based on an analysis of statistics, the study’s authors said. They do not know what may have caused the apparent increase.


Some outside experts questioned whether the increase was real, and expressed concerns that the report would frighten women needlessly.


The study, published in The Journal of the American Medical Association, found that advanced cases climbed to 2.9 per 100,000 younger women in 2009, from 1.53 per 100,000 women in 1976 — an increase of 1.37 cases per 100,000 women in 34 years. The totals were about 250 such cases per year in the mid-1970s, and more than 800 per year in 2009.


Though small, the increase was statistically significant, and the researchers said it was worrisome because it involved cancer that had already spread to organs like the liver or lungs by the time it was diagnosed, which greatly diminishes the odds of survival.


For now, the only advice the researchers can offer to young women is to see a doctor quickly if they notice lumps, pain or other changes in the breast, and not to assume that they cannot have breast cancer because they are young and healthy, or have no family history of the disease.


“Breast cancer can and does occur in younger women,” said Dr. Rebecca H. Johnson, the first author of the study and medical director of the adolescent and young adult oncology program at Seattle Children’s Hospital.


But Dr. Johnson noted that there is no evidence that screening helps younger women who have an average risk for the disease and no symptoms. We’re certainly not advocating that young women get mammography at an earlier age than is generally specified,” she said.


Expert groups differ about when screening should begin; some say at age 40, others 50.


Breast cancer is not common in younger women; only 1.8 percent of all cases are diagnosed in women from 20 to 34, and 10 percent in women from 35 to 44. However, when it does occur, the disease tends to be more deadly in younger women than in older ones. Researchers are not sure why.


The researchers analyzed data from SEER, a program run by the National Cancer Institute to collect cancer statistics on 28 percent of the population of the United States. The study also used data from the past when SEER was smaller.


The study is based on information from 936,497 women who had breast cancer from 1976 to 2009. Of those, 53,502 were 25 to 39 years old, including 3,438 who had advanced breast cancer, also called metastatic or distant disease.


Younger women were the only ones in whom metastatic disease seemed to have increased, the researchers found.


Dr. Archie Bleyer, a clinical research professor in radiation medicine at the Knight Cancer Institute at the Oregon Health and Science University in Portland who helped write the study, said scientists needed to verify the increase in advanced breast cancer in young women in the United States and find out whether it is occurring in other developed Western countries. “This is the first report of this kind,” he said, adding that researchers had already asked colleagues in Canada to analyze data there.


“We need this to be sure ourselves about this potentially concerning, almost alarming trend,” Dr. Bleyer said. “Then and only then are we really worried about what is the cause, because we’ve got to be sure it’s real.”


Dr. Johnson said her own experience led her to look into the statistics on the disease in young women. She had breast cancer when she was 27; she is now 44. Over the years, friends and colleagues often referred young women with the disease to her for advice.


“It just struck me how many of those people there were,” she said.


Dr. Donald A. Berry, an expert on breast cancer data and a professor of biostatistics at the University of Texas’ M. D. Anderson Cancer Center in Houston, said he was dubious about the finding, even though it was statistically significant, because the size of the apparent increase was so small — 1.37 cases per 100,000 women, over the course of 30 years.


More screening and more precise tests to identify the stage of cancer at the time of diagnosis might account for the increase, he said.


“Not many women aged 25 to 39 get screened, but some do, but it only takes a few to account for a notable increase from one in 100,000,” Dr. Berry said.


Dr. Silvia C. Formenti, a breast cancer expert and the chairwoman of radiation oncology at New York University Langone Medical Center, questioned the study in part because although it found an increased incidence of advanced disease, it did not find the accompanying increase in deaths that would be expected.


A spokeswoman for an advocacy group for young women with breast cancer, Young Survival Coalition, said the organization also wondered whether improved diagnostic and staging tests might explain all or part of the increase.


“We’re looking at this data with caution,” said the spokeswoman, Michelle Esser. “We don’t want to invite panic or alarm.”


She said it was important to note that the findings applied only to women who had metastatic disease at the time of diagnosis, and did not imply that women who already had early-stage cancer faced an increased risk of advanced disease.


Dr. J. Leonard Lichtenfeld
, deputy chief medical officer of the American Cancer Society, said he and an epidemiologist for the society thought the increase was real.


“We want to make sure this is not oversold or that people suddenly get very frightened that we have a huge problem,” Dr. Lichtenfeld said. “We don’t. But we are concerned that over time, we might have a more serious problem than we have today.”


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JPMorgan to eliminate 4,000 jobs in 2013









JPMorgan Chase & Co. plans to cut 3,000 to 4,000 jobs in its consumer bank in 2013, representing about 1.5 percent of the company's overall workforce, as the bank tries to improve the profitability of its branches.

The cuts will come mainly through attrition, spokeswoman Kristin Lemkau said. The bank's branches have 63,500 employees, representing about a quarter of JPMorgan Chase's total employees.

JPMorgan is one of the few big U.S. banks that is still adding branches to its network, but to boost profit it plans to scale back the tellers it has on hand for routine transactions and to add some salespeople for products and services like wealth management that can boost revenue.

The net effect will be to reduce staff per branch by 20 percent through 2015, the company's head of consumer banking, Ryan McInerney, said in a presentation to investors.

In JPMorgan Chase's mortgage business, the company reiterated its previously announced plans to shed 13,000 to 15,000 jobs by 2014.

JPMorgan Chase had 5,614 branches at the end of 2012, and plans to increase its network by about 100 branches a year, it said. Chase's U.S. branch network is second to Wells Fargo & Co's in size.

The bank is hoping to focus on selling more to wealthy depositors. Its average consumer checking account has a balance of $4,276, and about half of all affluent U.S. households are within two miles a Chase branch or automated teller machine, the bank said.

JPMorgan Chase overall earned $21.9 billion last year, excluding accounting charges linked to changes in the value of its debt. The bank said it has the potential to earn about $27.5 billion, thanks in part to efficiency gains. It aims to cut overall expenses by $1 billion in 2013.

For overall staffing levels, JPMorgan Chase had 258,965 employees globally at the end of 2012. Its headcount rose following the financial crisis, to 262,882 in the second quarter of 2012 from 219,569 in the first quarter of 2009. Since last year's second quarter, staffing levels have drifted lower.

JPMorgan Chase shares were down 1.3 percent at $47.08 on Tuesday morning on the New York Stock Exchange.
 

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Chicago could see 6 inches of snow in Tuesday storm









Abundant sunshine and temperatures close to 50 degrees in the past few days teased sober Midwestern sensibilities.


Encouraged perhaps by spring training photos, some people deliberately ventured outside. Some even hopped on bicycles for spins. Maybe they dared to think that spring could break a little early this year.


But on Tuesday morning, for the second time in less than a week, a blustery mix of freezing rain, sleet and snow is forecast to hit the Chicago area. Accumulations could reach 6 inches.








Sure, weather predictions being what they are around here, many will shrug off the warnings and be brazenly optimistic. But it might be best to recall the adage that those who ignore history are sure to be victimized by it.


Chicago has plenty of late-season snow history and, regardless of what materializes, the prudent will keep their salt dry, snow shovels handy and snowblowers primed for the next couple of months.


National Weather Service records from 2011 show that 54 of the previous 139 years — nearly 40 percent — experienced at least one day with an inch or more of snowfall on or after March 25. A total of 17 of those years brought multiple days with more than an inch of snow to Chicago.


One year, 1926, included six days when more than an inch of snow fell after March 25.


And, like some cruel trick, the later in the season the snow falls, the heavier and deadlier it tends to be. On the other hand, it also generally melts faster.


Among the grimmest of those late snowfalls was the deadly storm of April 15-17,1961, when a rainy low-pressure system stalled and kept looping over the Chicago region. It transformed cold rain into nearly 7 inches of snow. Six people died from the storm's effects; four were victims of snow-shoveling heart attacks.


That storm remains the latest major snowfall of 6 inches or more in the Chicago area.


More recently, the area was hit with nearly 2 inches of snow on March 27, 2008. On March 29, 2009, 1.2 inches accumulated. A week later, more than 2 inches of snow fell.


Tuesday's forecast, which calls for heavier snow north of Interstate 80 and winds whipping up to 35 mph, weighed on Jason Marker's mind while he stood at the Downers Grove Metra station Monday.


"I have a job interview tomorrow," said Marker, 30, of Downers Grove. "It's going to be tough getting there because I have to ride my bike."


Still, he said the winter has been a moderate one so far, "but maybe it will catch up with us tomorrow."


Ashley Feuillan and Bernard Thomas, also of Downers Grove, will be commuting in opposite directions Tuesday morning. Thomas commutes to a job in Aurora, which he starts at 7 a.m. Feuillan hops the train to Columbia College Chicago three times a week.


Both said they plan to leave earlier Tuesday.


"I actually like the snow," said Feuillan, 24, "but it can be a hassle when you're trying to get someplace."


Rather than focusing on what could be a nasty storm, Thomas, 40, kept an upbeat perspective.


"It hasn't been a bad winter," he said. "We haven't really had any big snowstorms."


If the forecast is accurate, Jake Weimer could receive a little relief.





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Global Health: After Measles Success, Rwanda to Get Rubella Vaccine


Rwanda has been so successful at fighting measles that next month it will be the first country to get donor support to move to the next stage — fighting rubella too.


On March 11, it will hold a nationwide three-day vaccination campaign with a combined measles-rubella vaccine, hoping to reach nearly five million children up to age 14. It will then integrate the dual vaccine into its national health service.


Rwanda can do so “because they’ve done such a good job on measles,” said Christine McNab, a spokeswoman for the Measles and Rubella Initiative, which will provide the vaccine and help pay for the campaign.


Rubella, also called German measles, causes a rash that is very similar to the measles rash, making it hard for health workers to tell the difference.


Rubella is generally mild, even in children, but in pregnant women, it can kill the fetus or cause serious birth defects, including blindness, deafness, mental retardation and chronic heart damage.


Ms. McNab said that Rwanda had proved that it can suppress measles and identify rubella, and it would benefit from the newer, more expensive vaccine.


The dual vaccine costs twice as much — 52 cents a dose at Unicef prices, compared with 24 cents for measles alone. (The MMR vaccine that American children get, which also contains a vaccine against mumps, costs Unicef $1.)


More than 90 percent of Rwandan children now are vaccinated twice against measles, and cases have been near zero since 2007.


The tiny country, which was convulsed by Hutu-Tutsi genocide in 1994, is now leading the way in Africa in delivering medical care to its citizens, Ms. McNab said. Three years ago, it was the first African country to introduce shots against human papilloma virus, or HPV, which causes cervical cancer.


In wealthy countries, measles kills a small number of children — usually those whose parents decline vaccination. But in poor countries, measles is a major killer of malnourished infants. Around the world, the initiative estimates, about 158,000 children die of it each year, or about 430 a day.


Every year, an estimated 112,000 children, mostly in Africa, South Asia and the Pacific islands, are born with handicaps caused by their mothers’ rubella infection.


Thanks in part to the initiative — which until last year was known just as the Measles Initiative — measles deaths among children have declined 71 percent since 2000. The initiative is a partnership of many health agencies, vaccine companies, donors and others, but is led by the American Red Cross, the United Nations Foundation, the Centers for Disease Control and Prevention, Unicef and the World Health Organization.


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Horsemeat found in IKEA meatballs









PRAGUE/STOCKHOLM (Reuters) - Sweden's Ikea stopped nearly all sales of meatballs at its furniture store cafeterias across Europe after tests in the Czech Republic on Monday showed some contained horsemeat.

The world's No. 1 furniture retailer, known also for the signature restaurants at its huge out-of-town stores, said it was pulling all meatballs produced by its main supplier in Sweden after the tests showed horsemeat in its beef and pork meatballs.

A European scandal erupted last month when tests in Ireland revealed some beef products contained horsemeat, triggering recalls of ready-made meals in several countries and damaging confidence in Europe's vast and complex food industry.

Meatballs, a famous Swedish dish often served with mashed potatoes, gravy and lingonberry jam, have become a trademark for IKEA, which sells them hot from the in-store cafeterias and packaged off the shelf.

The vast majority of Ikea's meatballs are made by Sweden's Familjen Dafgard, which said on its website that it was investigating the situation and would receive further test results in coming days.

The withdrawals did not affect meatballs in Norway, Russia, nor some in Switzerland or Poland, which were made by other suppliers, said Ikea spokeswoman Ylva Magnusson at the company's headquarters in Helsingborg, southern Sweden.

"We are now getting to the bottom of this and making extra tests, but we have decided to stop the meatball sales for a few days, so that no one needs to worry, until we have the results," Magnusson said.

IKEA stores in the United States, Canada, Australia and Japan were unaffected as they too have other suppliers.

Besides the Czech Republic, the batch containing horsemeat had also been on sale in Britain, Portugal, Netherlands, Belgium, Slovakia, Hungary, France, Italy, Spain, Greece, Cyprus and Ireland.

Magnusson said the test results would determine the percentage of horsemeat in the specific batch of meatballs. There was no indication that any other batch had been affected.

Earlier this month, food manufacturer Findus was forced to recall thousands of packages of frozen beef lasagnes in Sweden after discovering they contained 60 to 100 percent horsemeat.

On the sidelines of a meeting in Brussels, Sweden's rural affairs minister Eskil Erlandsson called the test results awful.

"Consumers should know that what is labelled on the package should also be inside the package and nothing else," he told Reuters, adding that it may damage IKEA's reputation.

"All fraud has an impact on the reputation of a company, especially when you talk about meat or other foodstuffs."

However, he did not see a need for the European Union to enforce mandatory origin labels for processed meat.

In Italy, consumer rights group Codacons called for checks on all meat products sold by IKEA in the country.

"We are ready to launch legal action and seek compensation not only against the companies who are responsible but also those whose duty it was to protect citizens," Codacons President Carlo Rienzi said in a statement.

The Czech State Veterinary Administration had reported its findings to the EU's Rapid Alert System for Food and Feed, it said in a statement.

The inspectors took samples for DNA tests in IKEA's unit in the city of Brno from a product labelled as "beef and pork meatballs", it said.

(Additional reporting by Mia Shanley in Stockholm, Maria Pia Quaglia in Milan and Charlie Dunmore in Brussels; Writing by Anna Ringstrom; Editing by Tom Pfeiffer)



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Oscars live: Christoph Waltz best supporting actor


























































7:59 p.m.: Paul Rudd and Melissa McCarthy present the best animated feature film award, which goes to "Brave." Director Mark Andrews accepts the award wearing a kilt. John Kahrs wins best animated short film for "Paperman."

7:50 p.m.: Christoph Waltz wins the first award of the night, as best supporting actor for his role in "Django Unchained." The award is given by Octavia Spencer.


MORE OSCARS: Red carpet pics | Live stream | Oscars trivia quiz








7:35 p.m.: The 85th Academy Awards are under way, with Seth MacFarlane as host. He announces that this year's Oscars will have a musical theme.


The show's first surprise is William Shatner as Captain Kirk from "Star Trek," telling MacFarlane he is doing a terrible job as host.


The first song of the night is MacFarlane singing a song called "We Saw Your Boobs."


MacFarlane then sings a rendition of the Frank Sinatra hit "The Way You Look Tonight" with Channing Tatum and Charlize Theron dancing.


He then sings "High Hopes" with Daniel Radcliffe and Joseph Gordon-Levitt.






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The Texas Tribune: Advocates Seek Mental Health Changes, Including Power to Detain


Matt Rainwaters for Texas Monthly


The Sherman grave of Andre Thomas’s victims.







SHERMAN — A worried call from his daughter’s boyfriend sent Paul Boren rushing to her apartment on the morning of March 27, 2004. He drove the eight blocks to her apartment, peering into his neighbors’ yards, searching for Andre Thomas, Laura Boren’s estranged husband.






The Texas Tribune

Expanded coverage of Texas is produced by The Texas Tribune, a nonprofit news organization. To join the conversation about this article, go to texastribune.org.




For more articles on mental health and criminal justice in Texas, as well as a timeline of the Andre Thomas case: texastribune.org






Matt Rainwaters for Texas Monthly

Laura Boren






He drove past the brightly colored slides, swings and bouncy plastic animals in Fairview Park across the street from the apartment where Ms. Boren, 20, and her two children lived. He pulled into a parking spot below and immediately saw that her door was broken. As his heart raced, Mr. Boren, a white-haired giant of a man, bounded up the stairwell, calling out for his daughter.


He found her on the white carpet, smeared with blood, a gaping hole in her chest. Beside her left leg, a one-dollar bill was folded lengthwise, the radiating eye of the pyramid facing up. Mr. Boren knew she was gone.


In a panic, he rushed past the stuffed animals, dolls and plastic toys strewn along the hallway to the bedroom shared by his two grandchildren. The body of 13-month-old Leyha Hughes lay on the floor next to a blood-spattered doll nearly as big as she was.


Andre Boren, 4, lay on his back in his white children’s bed just above Leyha. He looked as if he could have been sleeping — a moment away from revealing the toothy grin that typically spread from one of his round cheeks to the other — except for the massive chest wound that matched the ones his father, Andre Thomas (the boy was also known as Andre Jr.), had inflicted on his mother and his half-sister as he tried to remove their hearts.


“You just can’t believe that it’s real,” said Sherry Boren, Laura Boren’s mother. “You’re hoping that it’s not, that it’s a dream or something, that you’re going to wake up at any minute.”


Mr. Thomas, who confessed to the murders of his wife, their son and her daughter by another man, was convicted in 2005 and sentenced to death at age 21. While awaiting trial in 2004, he gouged out one of his eyes, and in 2008 on death row, he removed the other and ate it.


At least twice in the three weeks before the crime, Mr. Thomas had sought mental health treatment, babbling illogically and threatening to commit suicide. On two occasions, staff members at the medical facilities were so worried that his psychosis made him a threat to himself or others that they sought emergency detention warrants for him.


Despite talk of suicide and bizarre biblical delusions, he was not detained for treatment. Mr. Thomas later told the police that he was convinced that Ms. Boren was the wicked Jezebel from the Bible, that his own son was the Antichrist and that Leyha was involved in an evil conspiracy with them.


He was on a mission from God, he said, to free their hearts of demons.


Hospitals do not have legal authority to detain people who voluntarily enter their facilities in search of mental health care but then decide to leave. It is one of many holes in the state’s nearly 30-year-old mental health code that advocates, police officers and judges say lawmakers need to fix. In a report last year, Texas Appleseed, a nonprofit advocacy organization, called on lawmakers to replace the existing code with one that reflects contemporary mental health needs.


“It was last fully revised in 1985, and clearly the mental health system has changed drastically since then,” said Susan Stone, a lawyer and psychiatrist who led the two-year Texas Appleseed project to study and recommend reforms to the code. Lawmakers have said that although the code may need to be revamped, it will not happen in this year’s legislative session. Such an undertaking requires legislative studies that have not been conducted. But advocates are urging legislators to make a few critical changes that they say could prevent tragedies, including giving hospitals the right to detain someone who is having a mental health crisis.


From the time Mr. Thomas was 10, he had told friends he heard demons in his head instructing him to do bad things. The cacophony drove him to attempt suicide repeatedly as an adolescent, according to court records. He drank and abused drugs to try to quiet the noise.


bgrissom@texastribune.org



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Promise, peril seen for crowd-funding investors









Crowd funding is widely seen as a revolutionary idea.


A 2012 federal law known as the JOBS Act opens the door to allowing small, privately owned businesses to market ownership stakes in their ventures to people over the Internet.


Companies will be able to sell up to $1 million in equity a year to ordinary investors without having to register the offering with the Securities and Exchange Commission or state regulators.





Before the average person can use crowd funding to stake a claim in a startup, the SEC still must draft rules that the Obama administration hopes will result in U.S. businesses growing and adding jobs. At the same time, the securities cop needs to include safeguards that protect less sophisticated individual investors drawn to inherently risky startups.


That's why equity crowd funding under JOBS, or Jumpstart our Business Startups, has some longtime regulators and securities lawyers squirming.


"It can be an invitation for fraudsters to steal money," Matthew Brown, a Katten Muchin Rosenman lawyer, said last month at a CFA Society of Chicago event at 1871, a center for digital startups in Chicago.


But Brown also noted that equity crowd funding also democratizes small-business financing, a process that historically has given access mostly to wealthier — or, as they're known in high-finance circles, "accredited" — investors.


"The world has changed dramatically, and who's to say who is smarter than anyone else?" Brown added.


Many existing crowd-funding platforms such as Kickstarter don't sell equity stakes in businesses to average investors. Rather, they give consumers the chance to donate money to an enterprise or to get an early or discounted crack at a new product. Since Kickstarter's launch in April 2009, more than $450 million has been pledged by more than 3 million people funding more than 35,000 projects, the New York-based company's website says.


Their acceptance suggests that consumers are willing to engage with companies on a deeper level. As such, enabling unaccredited consumers to invest in companies in small increments online has promise and could become part of the fundraising "ecosystem," says one Chicago entrepreneur.


Abe's Market, a Chicago-based e-commerce site selling natural and organic products from more than 1,000 suppliers, said it would consider crowd funding under the JOBS Act, saying it and its vendors have "die-hard fans" and "a core group of customers" who might like to invest in their vision.


Last month, Abe's raised $5 million from Carmel Ventures, Index Ventures, Beringea and Accel Partners, a Groupon backer. New backers include OurCrowd, a crowd-funding site for accredited investors.


"If you can get passionate people to invest in your business, you're not just gaining investors, you're gaining evangelists," Abe's Chief Executive Richard Demb said. "The challenge for any consumer brand is: How do you find not just customers, but the right customers who are going to tell their friends?"


But there would also be potential headaches for companies raising equity financing through crowd funding, he said.


"You have to make sure that expectations would be set fairly, that no one is putting their life savings into the investment, and that they don't also come back and become a challenge to manage as the business grows," Demb said. "You don't want someone who invested $250 to come back and say, 'I don't think we should expand to the West Coast.'"


Safeguards for average investors exist in the JOBS Act. They include capping nonaccredited individuals' crowd-funding investments at $2,000, or 5 percent of annual income or net worth of less than $100,000, whichever is greater.


Snapclass, launched a few weeks ago at 1871, provides software enabling businesses to provide training online. Co-founder Scott Mandel, who has financed the company himself, doesn't expect to take advantage of equity crowd funding in the future and instead would seek, say, venture capital funding.


"Not all checks are the same," said Mandel, previously a trader and professional poker player. "I'd want someone who could add more than just the cash, such as connections and experience and help with things that I'm not an expert in."


One of 1871's fastest-growing startups is MarkITx. It recently raised $1.2 million from wealthy individuals in its first fundraising round, has seven employees and is looking to add sales jobs. It's an online exchange for businesses wanting to buy and sell used information technology equipment, from iPads to Oracle servers.


"For us, it wouldn't be the sole way to raise money, but it definitely is a viable vehicle to look at raising money," MarkITx partner Marc Brooks said of equity crowd funding under the JOBS Act.





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