Kodak in $525 million patent deal, eyes bankruptcy end

(Reuters) – Eastman Kodak Co agreed to sell its digital imaging patents for about $ 525 million, a key step to bringing the photography pioneer out of bankruptcy in the first half of 2013.

The deal for the 1,100 patents allows Kodak to fulfill a condition for securing $ 830 million in financing.

The patent deal was reached with a consortium led by Intellectual Ventures and RPX Corp, and which includes some of the world’s biggest technology companies, which will license or acquire the patents.

Those companies are Adobe Systems Inc, Amazon.com Inc, Apple Inc, Facebook Inc, Fujifilm, Google Inc, Huawei Technologies Co Ltd, HTC Corp, Microsoft Corp, Research In Motion Ltd, Samsung Electronics Co Ltd and Shutterfly Inc, according to court documents.

Kodak still must sell its personalized and document-imaging businesses as part of the financing package, and also has to resolve its UK pension obligation.

Kodak said the patent deal puts it on a path to emerge from Chapter 11 in the first half of 2013.

“Our progress has accelerated over the past several weeks as we prepare to emerge as a strong, sustainable company,” said Antonio Perez, chairman and chief executive of the Rochester, New York-based company.

The patent portfolio was expected to be a major asset for Kodak when it filed for bankruptcy in January. An outside firm had estimated the patents could be worth as much as $ 2.6 billion.

Kodak’s patents hit the market as intellectual property values have soared and technology companies have plowed money into patent-related litigation.

For example, last year Nortel Networks sold 6,000 wireless patents in a bankruptcy auction for $ 4.5 billion and earlier this year Google spent $ 12.5 billion for patent-rich Motorola Mobility.

But Kodak’s patent auction dragged on beyond the initial expectation that it would be wrapped up in August. One patent specialist blamed those early, overly optimistic valuations, which he said encouraged Kodak’s team to set their sights too high.

“Unfortunately (Kodak management) was misled into thinking it was worth billions of dollars and it wasn’t,” said Alex Poltorak, chairman of General Patent Corp, a patent licensing firm. “I think they sold them at a very good price.”

He said after Google acquired Motorola, the search engine company no longer needed patents at any price, deflating the intellectual property market.

Kodak traces its roots to the 19th century and invented the handheld camera. But it has been unable to successfully shift to digital imaging.

It will likely be a different company when it exits bankruptcy, out of the consumer business and focused instead on providing products and services to the commercial imaging market.

The patent sale is subject to approval by the U.S. Bankruptcy Court in Manhattan.

The Kodak bankruptcy case is in Re: Eastman Kodak Co. et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-10202.

(Reporting by Tom Hals in Wilmington, Delaware and Sruthi Ramakrishnan in Bangalore; Editing by Nick Zieminski,; John Wallace and Peter Galloway)

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Miss USA Olivia Culpo is crowned Miss Universe

LAS VEGAS (AP) — A 20-year-old Boston University sophomore and a self-described "cellist-nerd" brought the Miss Universe crown back to the United States for the first time in more than a decade when she won the televised contest Wednesday.

Olivia Culpo beat out 88 other beauty queens to take the title from Leila Lopes of Angola during the two-hour competition at the Planet Hollywood casino on the Las Vegas Strip.

Culpo wore a tight navy blue mini-dress with a sequined bodice as she walked on stage for the competition's opening number. Later in the night, she strutted in a purple and blue bikini, and donned a wintery red velvet gown with a plunging neckline.

Culpo's coronation ends a long losing spell for the U.S. in the competition co-owned by Donald Trump and NBC. An American had not won the right to be called Miss Universe since Brook Lee won the title in 1997.

Culpo was good enough during preliminary competitions to be chosen as one of 16 semifinalists who moved on to compete in the pageant's finale. Her bid lasted through swimsuit, evening wear, and interview competitions that saw cuts after each round.

She won over the judges, even after tripping slightly during the evening gown competition. Telecasters pointed it out but also noted her poised recovery.

Minutes before the middle child of five was crowned, she was asked whether she had she had ever done something she regretted.

"I'd like to start off by saying that every experience no matter what it is, good or bad, you'll learn from it. That's just life," she said. "But something I've done I've regretted is probably picking on my siblings growing up, because you appreciate them so much more as you grow older."

Miss Philippines, Janine Tugonon, came in second, while Miss Venezuela, Irene Sofia Esser Quintero, placed third.

All the contestants spent the past two weeks in Sin City, where they posed in hardhats at a hotel groundbreaking, took a painting lesson, and pranked hotel guests by hiding in their rooms.

Culpo was the first Miss USA winner from Rhode Island when she took the national crown in Las Vegas in June.

She grew up in Cranston with two professional musicians for parents and has played the cello alongside world-renowned classical musician Yo-Yo Ma. On her Miss Universe page, she said she hopes to pursue a career in film or television, and cites Audrey Hepburn as a role model because of her "generosity, intelligence and grace."

With Culpo's promotion, Miss Maryland Nana Meriwether becomes the new Miss USA.

The Miss Universe pageant was back in Las Vegas this year after being held in Sao Paulo in 2011. It aired live on NBC and was streamed to more than 100 countries.

Organizers had considered holding the 61st annual Miss Universe in the popular Dominican Republic tourist city of Punta Cana, but Miss Universe Organization President Paula Shugart said that country's financial crisis proved to be too much of an obstacle.

The panel of 10 judges included singer Cee Lo Green, "Iron Chef" star Masaharu Morimoto and Pablo Sandoval of the San Francisco Giants.

Asked on the red carpet whether he found playing in the World Series or judging the beauty pageant to be more difficult, Sandoval said both were hard.

Sharply dressed women and men, including a large contingent from South America, held banners and cheered on their favorite contestants.

The pageant started as a local revue in Long Beach, Calif., organized by Catalina Swimwear. It is not affiliated with the Miss America pageant and unlike that contest, does not include a talent section.

Contestants in the pageant cannot have been married or have children. They must be younger than 27 and older than 18 by Feb. 1 of the competition year.

As Miss Universe, Culpo will receive an undisclosed salary, a wardrobe fit for a queen, a limitless supply of beauty products, and a luxury apartment in New York City.

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Officials Confront Skepticism Over Health Law

On its face, the low-key discussion around a conference table in Miami last month did not appear to have national implications. Eight men and women, including a diner owner, a chef and a real estate agent, answered questions about why they had no health insurance and what might persuade them to buy it.

But this focus group, along with nine others held around the country in November, was an important tool for advocates coming up with a campaign to educate Americans about the new health care law. The participants were among millions of uninsured people who stand to benefit from the law. With incomes below 400 percent of the poverty level, or $92,200 for a family of four this year, the focus group members will qualify for federal subsidies to help cover the cost of private insurance starting in 2014.

The sessions confirmed a daunting reality: Many of those the law is supposed to help have no idea what it could do for them. In the Miami focus group, a few participants knew only that they could face a fine if they did not buy coverage.

“It’s another forced bill,” said Christopher Pena, 24, who works in customer service.

There lies the challenge for Enroll America, a nonprofit group formed last year to get the word out to the uninsured and encourage them get coverage, providing help along the way. With the election over and the law almost certain to survive, the group is honing its fund-raising and testing strategies for persuading people to sign up for health insurance — a process that will begin in less than a year.

Starting next October, people will be able to shop for coverage, or find out if they are eligible for Medicaid, through online markets known as insurance exchanges.

“Our job is to convey to them that there is help coming that they didn’t know about,” said Rachel Klein, Enroll America’s executive director.

The group has raised only about $6 million so far — but financial backers include some major players in the medical industry: insurers like Aetna and Blue Cross Blue Shield, associations representing both brand name and generic drug manufacturers, hospitals and the Catholic Health Association. Insurance companies generally opposed the law before its passage in 2010 but now have a stake in its success.

Over the next two years, the group hopes to raise as much as $100 million for advertising, social media and other outreach efforts. “There are so many different groups that can play some role in this: hospitals, community health centers, pharmacies, tax preparers,” said Ron Pollack, chairman of Enroll America’s board. “Our job has got to be to try to galvanize each of those sectors, so there is a wide variety of ways people potentially can hear about this.”

Although the campaign will be national, the group will devote more resources to some states than to others. About half of the nation’s uninsured population lives in six states: California, Florida, Georgia, Illinois, New York and Texas. Of those, states whose leaders remain opposed to the health care law, like Texas, will probably get the most attention, Mr. Pollack said.

At the same time, Enroll America will coordinate with states, many of which are planning their own outreach and enrollment efforts, and with the Obama administration.

The Department of Health and Human Services has already awarded a $3.1 million contract to Weber Shandwick, a public relations firm, to plan a national education campaign for next year. It plans to seek proposals soon for a larger contract with a public relations firm that would help with the actual campaign, officials there said. Although the campaign has yet to take shape, an administration official confirmed that President Obama will play a role as it moves forward.

Republicans in Congress have already criticized the administration for spending taxpayer money to promote the law. Last month, Representative Dave Camp of Michigan, who leads the Ways and Means Committee, subpoenaed Kathleen Sebelius, the secretary of health and human services, seeking information on “public relations campaigns, advertisements, polling, message testing, and similar services.”

In addition to holding focus groups in Miami, Philadelphia, San Antonio and Columbus, Ohio, Enroll America commissioned a nationwide survey to help hone its message. The survey, conducted in September and October by Lake Research Partners, a Democratic polling group, found that the vast majority of uninsured people are unaware of the new coverage options provided by the law.

They are also skeptical. Many who participated in the focus groups or survey reported bad experiences trying to get health insurance, and doubted that the law would provide coverage that was both affordable and comprehensive.

“It’s two major mountains that need to be climbed,” Mr. Pollack said. “People are unaware of the benefits that could be provided to them, and they have to overcome skepticism, based on their past experiences with trying to obtain insurance.”

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UBS to pay $1.5 billion to settle Libor charges

UBS has agreed to pay a fine of $1.5 billion to authorities and plead guilty to a felony count of wire fraud, the most recent developments in a far-reaching probe into how banks manipulated interest rates leading up to the financial crisis.

Two former traders were also charged with conspiracy in a complaint unsealed Wednesday, the first people charged criminally in the Libor scandal.

"We cannot and we will not tolerate misconduct on Wall Street of the kind admitted to by UBS today and by Barclays last June," said Assistant Atty. Gen. Lanny Breuer, head of the criminal division. In June, Barclays was the first bank to settle with authorities, paying $450 million.

The fine was one of the biggest leveled against a financial institution by American and British authorities, just short of the $1.9-billion fine HSBC agreed to pay last week over money laundering allegations.

The charges relate to the ways traders leaned on banks to manipulate the London interbank offered rate, or Libor, to benefit their own trading positions.

Officials said that from 2006 through 2009 UBS traders placed bets on the movement of Libor and manipulated the rate, which is used as a benchmark to set interest rates for many mortgages, credit cards and other consumer lending instruments. The traders profited by knowing which way the Libor would move.

In coming months, the probe probably will expand to include other banks that help determine the Libor, analysts say. But it's the criminal charges that turned some heads on Wall Street on Wednesday.

The plea agreement on wire fraud charges by a UBS subsidiary in Japan, which included a $100-million fine, marks the first time since 2005 that a major financial institution has pleaded guilty to criminal charges, the Justice Department said.

"For a bank to admit to criminality is kind of mind-blowing," said Peter Shapiro, managing director of Swap Financial Group in South Orange, N.J. "Obviously, they didn't do that easily — that was something that must have been a big priority of enforcement agencies."

Enforcement agencies have been feeling some pressure to level blame on financial institutions in the wake of the financial crisis, Shapiro said. No senior financial executives have served jail time for their roles in the financial crisis.

"Both the regulators and enforcement agencies feel somewhat beleaguered by the repeated assertions that they failed to deliver enough heads on a plate as a response to the financial crisis," he said.

U.S. officials also announced criminal charges against two former senior traders for UBS in connection with the scandal. Tom Alexander William Hayes, 33, of Britain, was charged with conspiracy and wire fraud, and Roger Darin, 41, of Switzerland, was charged with conspiracy. Both remain abroad, but the Justice Department will try to extradite them.

"The motivation here was nothing short of sheer greed, and the scheme was nothing short of a shell game, a Wall Street version of three-card monte," said Kevin Perkins, associate director of the FBI, which helped investigate the case.

More criminal charges at other banks could follow, said Anthony Sabino, professor of law at the Tobin College of Business at St. John's University.

"Once you start to round up some accused bad guys, that leads to more people being rounded up," he said. "This is a vast conspiracy among a multitude of banks, which therefore implicates a multitude of individuals."

Much of the activity took place at UBS Japan Securities Co., where Hayes was a senior trader. The Justice Department released internal UBS messages in which Hayes and others talked about their alleged manipulation.

In one from November 2006, Hayes told a UBS employee who submitted rate information for the Libor that he and Darin "skew the Libors a bit" and then said he needed the six-month rate to stay high for three days.

UBS traders were often colorful and emphatic in their pleadings, according to documents released by Britain's Financial Services Authority. One wrote, "I need you to keep it as low as possible.... If you do that, I'll pay you, you know, $50,000, $100,000, whatever you want."

The UBS fine was larger than that leveled on Barclays earlier in the year because UBS' misconduct was "considerably more serious than Barclays' because it was more widespread within the firm," the Financial Services Authority said. At least 45 individuals at UBS were involved in or aware of the rate-fixing practice.

UBS said that it had fully cooperated with authorities and that the interest-rate manipulations were the isolated actions of certain employees.

"Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee," UBS CEO Sergio Ermotti said in a statement.

Analysts say that there's still potential for significant civil suits against UBS and other banks, which could be more damaging than the fines levied against them. Keefe, Bruyette & Woods, an equity research firm, estimated in July that potential industry damages could reach $35 billion.

Those estimates were validated Wednesday when the Inspector General for the Federal Housing Finance Agency estimated that government-owned Fannie Mae and Freddie Mac may have lost a combined $3 billion because of reduced interest payments on securities and other holdings. Officials at FHFA, which regulates Fannie and Freddie, have not confirmed the estimate but are evaluating potential issues involved with the Libor manipulation.

There are barriers to further lawsuits — the burden of proof will be high, analysts at Keefe, Bruyette & Woods said. To move forward with civil suits, plaintiffs would have to prove that traders were conspiring, said John C. Coffee, a Columbia Law School expert in corporate fraud.

"But that said, the size of the potential liability is mushrooming," he said.

Times reporter E. Scott Reckard contributed to this report. Semuels reported from Los Angeles and Puzzanghera from Washington.

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Fix for flawed light rail junction in downtown L.A. is outlined

Local transit officials Tuesday outlined plans to permanently repair the flawed intersection of two light rail lines in downtown Los Angeles that had raised safety and maintenance concerns.

The Los Angeles County Metropolitan Transportation Authority asserts that the repair should prevent further problems at Washington Boulevard and Flower Street, the busiest junction in Metro's 87-mile rail network.

Officials plan to slightly narrow the width between the rails along 15 feet of track where the popular Blue Line curves to merge into the recently opened Expo Line before the route heads into the Metro Center station. About 32 trains an hour now pass through the intersection.

The fix is expected to eliminate excess play in the track that was causing train wheels to slam into a small section of the junction, resulting in excessive wear to wheel assemblies and a critical piece of the layout known as a "frog" that guides rail cars through a switch. According to an earlier Metro report, the flaw presented a risk of derailment on the Blue Line.

"It is safe now and we will keep it safe," said Frank Alejandro, Metro's chief operating officer. "That is our commitment to our customers and to our employees."

Officials for Metro and the Exposition Construction Authority, which built the Expo Line to the Westside, said the repair can be made during a weekend in the months ahead, minimizing service disruptions. When the work will begin and what it will cost have not been determined.

The repair is one of three options presented this month by ZetaTech, a New Jersey-based rail consulting firm hired by rail officials to analyze the junction.

According to the company's report, the problem was caused by a design that did not comply with standards put forth by the American Railway Engineering and Maintenance of Way Assn. Among other things, the width between rails was 4 feet, 9 inches, in parts of the junction where it should have been 4 feet, 8 1/2 inches.

The company also concluded that the junction has been safe since Metro made temporary modifications, began a stringent inspection program imposed by the California Public Utilities Commission and limited train speeds through the intersection to 5 mph. The Blue Line normally travels through the intersection at 10 mph, and Expo trains go through at 35 mph.

Michael Harris-Gifford, Metro's chief executive of wayside systems, said that two other solutions proposed by ZetaTech were not practical because they would reduce the number of trains and remove some traffic lanes.

The track alignment problem was first noticed in April 2010, when Metro officials discovered excessive wear and damage to wheel flanges and the pins that hold wheel assemblies to Blue Line cars. Internal agency reports state that the defect presented a potential risk of derailment in the junction or elsewhere on the Blue Line.

Trying to avoid the cost and service disruptions that would be required to replace flawed tracks, transit officials attempted to solve the problem by welding a bulb of metal to the frog and lengthening rail guides for train wheels. The weld, however, has had to be redone twice because of cracking.

In July, the utilities commission noted the failed welds and recommended that the damaged frog be replaced. Since then, Metro and Expo hired ZetaTech to help come up with a permanent solution. Once the repair is made, Harris-Gifford said, Metro and Expo officials plan to meet with the commission.

dan.weikel@latimes.com

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Nielsen to buy Arbitron for about $1.26B

NEW YORK (AP) — Nielsen, the dominant source of TV ratings, on Tuesday said it had agreed to buy Arbitron for about $ 1.26 billion to expand into radio measurement.

Arbitron pays 70,000 people to carry around gadgets that register what stations they’re listening to. Since Nielsen also collects cash register data, CEO David Calhoun said buying Arbitron will let Nielsen be a one-stop shop for advertisers who want to know how the radio advertising they buy affects product sales.

The acquisition will let Nielsen expand the amount of media consumption it tracks by about 2 hours per person per day to 7 hours, Calhoun said in an interview.

“You don’t find many mediums that allow for that kind of increase,” Calhoun said.

Arbitron’s operations are mainly in the U.S., while Nielsen operates globally. Calhoun said another major driver for the deal is that Nielsen wants to spread Arbitron’s tracking technology to other countries.

Evercore Partners analyst Douglas Arthur said Nielsen doesn’t need traditional radio measurement to grow, but Arbitron seemed like a willing seller, and it will be a “nice complementary but not ‘must have’ platform.”

Nielsen Holdings N.V. said it will pay $ 48 per share, which is a 26 percent premium to Arbitron’s Monday closing price of $ 38.04. Shares of Arbitron, which is based in Columbia, Md., jumped $ 8.99, or 23.6 percent, to close at $ 47.03.

Nielsen, which went public in January 2011, has headquarters in the Netherlands and New York. Its stock added $ 1.30, or 4.4 percent, to close at $ 30.92.

Nielsen said it expects the deal to add about 13 cents per share to its adjusted earnings a year after closing and about 19 cents per share to adjusted earnings two years after closing.

Abitron’s chief operating officer, Sean Creamer, is set to take over as CEO from William Kerr on Jan. 1. Calhoun said he hoped Creamer would remain with Nielsen after the deal closes.

Nielsen said it has a financing commitment for the transaction.

Nielsen was the prime source of audience ratings in the early days of radio, thanks to a device similar to Arbitron’s People Meter. The Audimeter was attached to the radio set. The company’s focus shifted to TV measurement in the 1950s.

On Monday, Nielsen announced a deal with Twitter to measure how much U.S. TV watchers tweet about the shows they’re watching. The “Nielsen Twitter TV Rating” will debut in the fall.

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Cassadee Pope wins Season 3 of 'The Voice'

NEW YORK (AP) — Cassadee Pope, who was country singer Blake Shelton's protege on the third season of NBC's "The Voice," has won the show's competition.

The 23-year-old singer is stepping out into a solo career after performing with a band called Hey Monday. Her victory over Scottish native Terry McDermott and long-bearded Nicholas David was announced at the end of a two-hour show Tuesday.

"The Voice" has grown into a hit for NBC and was the key factor in the network's surprising success this fall.

The show's status was affirmed by the stream of hitmakers who performed on the finale. They included Rihanna, Bruno Mars, the Killers, Smokey Robinson and Peter Frampton.

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Attackers in Pakistan Kill Anti-Polio Workers

Rizwan Tabassum/Agence France-Presse — Getty Images

A Pakistani mother mourned her daughter, who was killed on Tuesday in an attack on health workers participating in a drive to eradicate polio from Pakistan.

ISLAMABAD, Pakistan — Gunmen shot dead five female health workers who were immunizing children against polio on Tuesday, causing the Pakistani government to suspend vaccinations in two cities and dealing a fresh setback to an eradication campaign dogged by Taliban resistance in a country that is one of the disease’s last global strongholds.

“It is a blow, no doubt,” said Shahnaz Wazir Ali, an adviser on polio to Prime Minister Raja Pervez Ashraf. “Never before have female health workers been targeted like this in Pakistan. Clearly there will have to be more and better arrangements for security.”

No group claimed responsibility for the attacks, but most suspicion focused on the Pakistani Taliban, which has previously blocked polio vaccinators and complained that the United States is using the program as a cover for espionage.

The killings were a serious reversal for the multibillion-dollar global polio immunization effort, which over the past quarter century has reduced the number of endemic countries from 120 to just three: Pakistan, Afghanistan and Nigeria.

Nonetheless, United Nations officials insisted that the drive would be revived after a period for investigation and regrouping, as it had been after previous attacks on vaccinators here, in Afghanistan and elsewhere.

Pakistan has made solid gains against polio, with 56 new recorded cases of the diseases in 2012, compared with 192 at the same point last year, according to the government. Worldwide, cases of death and paralysis from polio have been reduced to less than 1,000 last year, from 350,000 worldwide in 1988.

But the campaign here has been deeply shaken by Taliban threats and intimidation, though several officials said Tuesday that they had never seen such a focused and deadly attack before.

Insurgents have long been suspicious of polio vaccinators, seeing them as potential spies. But that greatly intensified after the C.I.A. used a vaccination team headed by a local doctor, Shakil Afridi, to visit Osama bin Laden’s compound in Abbottabad, reportedly in an attempt to obtain DNA proof that the Bin Laden family was there before an American commando raid on it in May 2011.

In North Waziristan, one prominent warlord has banned polio vaccinations until the United States ceases drone strikes in the area.

Most new infections in Pakistan occur in the tribal belt and adjoining Khyber-Pakhtunkhwa Province — some of the most remote areas of the country, and also those with the strongest militant presence. People fleeing fighting in those areas have also spread the disease to Karachi, the country’s largest city, where the disease has been making a worrisome comeback in recent years.

After Tuesday’s attacks, witnesses described violence that was both disciplined and well coordinated. Five attacks occurred within an hour in different Karachi neighborhoods. In several cases, the killers traveled in pairs on motorcycle, opening fire on female health workers as they administered polio drops or moved between houses in crowded neighborhoods.

Of the five victims, three were teenagers, and some had been shot in the head, a senior government official said. Two male health workers were also wounded by gunfire; early reports incorrectly stated that one of them had died, the official said.

In Peshawar, the capital of Khyber-Pakhtunkhwa Province, gunmen opened fire on two sisters participating in the polio vaccination program, killing one of them. It was unclear whether that shooting was directly linked to the Karachi attacks.

In remote parts of the northwest, the Taliban threat is exacerbated by the government’s crumbling writ. In Bannu, on the edge of the tribal belt, one polio worker, Noor Khan, said he quit work on Tuesday once news of the attacks in Karachi and Peshawar filtered in.

“We were told to stop immediately,” he said by phone.

Still, the Pakistani government has engaged considerable political and financial capital in fighting polio. President Asif Ali Zardari and his daughter Aseefa have been at the forefront of immunization drives. With the help of international donors, including the Bill and Melinda Gates Foundation, they have mounted a huge vaccination campaign aimed at up to 35 million children younger than 5, usually in three-day bursts that can involve 225,000 health workers.

The plan seeks to have every child in Pakistan immunized at least four times per year, although in the hardest-hit areas one child could be reached as many as 12 times in a year.

Declan Walsh reported from Islamabad, and Donald G. McNeil Jr. from New York. Salman Masood contributed reporting from Islamabad, and Zia ur-Rehman from Karachi, Pakistan.

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Safety regulators fine Toyota for delaying SUV recall

Federal safety regulators Tuesday slapped another big fine on Toyota Motor Corp. for failing to promptly recall cars.

Toyota will pay $17.35 million for delaying a recall of Lexus RX 350 and RX 450h sport-utility vehicles because a floor mat could jam the gas pedal, causing unintended acceleration. It follows a record $48.8 million in fines two years ago, a result of three separate investigations into Toyota's handling ofautorecalls for pedal entrapment, sticky gas pedals and steering relay rod problems.

With the Lexus SUVs, Toyota and its dealers started seeing the problem in 2009, but the automaker failed to issue a recall for the popular vehicles until June, according to the National Highway Traffic Safety Administration.

"Every moment of delay has the potential to lead to deaths or injuries on our nation's highways," said David Strickland, head of the National Highway Traffic Safety Administration.

Federal law requires all auto manufacturers to notify NHTSA within five business days of discovering a safety defect and to promptly issue a recall.

"We agreed to this settlement in order to avoid a time-consuming dispute and to focus fully on our shared commitment with NHTSA to keep drivers safe," said Ray Tanguay, chief quality officer of Toyota North America.

A fine of $17 million, while large, is hardly a "speed bump" to one of the world's largest automakers, said Jeremy Anwyl, vice chairman at auto information company Edmunds.com.

Regulators are making a statement that automakers need to recall cars even if they are still investigating an issue and determining the proper repair, Anwyl said. Generally, car companies prefer to announce a recall and a fix at the same time.

The latest fine comes as Toyota is regaining lost U.S. market share in the wake of previous fines and larger recalls, as well as inventory problems created by last year's earthquake in Japan.

Through the first 11 months of this year, Toyota has sold almost 1.9 million vehicles in the U.S., up 29% from the same period last year. Its sales are growing at more than twice the rate of the industry. The automaker now has 14.4% of the U.S. market, up from 12.7% through November of last year.

While the fine hurts Toyota's image, it probably will not affect sales, said Thilo Koslowski, the auto analyst at Gartner Inc.

"Consumer memory is just not that long," Koslowski said. "If this is a company that provided subpar vehicles compared to its competitors, this would be a problem. But people like the brand."

Tuesday's fine resulted from an investigation launched earlier this year when NHTSA's Office of Defects Investigation began noticing a trend in floor mat pedal entrapment in 2010 Lexus RX 350s. When safety regulators asked Toyota about the problem in May, the automaker reported 63 alleged incidents of possible floor mat pedal entrapment in RX 350s dating to 2009.

But Toyota waited until June to recall 154,036 Lexus RX 350 and RX 450h vehicles from the 2010 model year.

Toyota has had a history of problems with unintended acceleration. In one high-profile accident, an improperly positioned floor mat in a Lexus sedan may have trapped the accelerator — causing the car to race down California Highway 125 near San Diego at more than 100 mph. The car crashed and burned, killing off-duty California Highway Patrol Officer Mark Saylor and three family members.

That crash led to a safety investigation and recall of 3.8 million Toyota and Lexus vehicles to fix the floor mat problem. After a Los Angeles Times series on unintended sudden acceleration, Toyota issued millions more recall notices to fix sticking gas pedals and other issues. At one point, it had to halt much of its production of new cars in the U.S. to fix recalled vehicles.

jerry.hirsch@latimes.com

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White House considers responses to Connecticut shooting

WASHINGTON — As gun control advocates cheered President Obama's call to action on gun violence, the White House began to weigh its options Monday on how to fulfill the president's vow to use all the power of his office to prevent future mass killings.

The most likely initiatives following Friday's Connecticut school shooting — efforts to tighten gun show sales, for example, or to reinstate a ban on assault weapons — are laden with political pitfalls and challenges. Although several members of Congress indicated they were newly open to gun control measures, opposition to stiffer gun laws is expected to remain firm, particularly in the Republican-led House.

Taking on another uphill legislative battle would scramble an already full agenda for the White House, which is embroiled in fiscal negotiations and hoping to start Obama's second term with a focus on immigration reform.

PHOTOS: Shooting at Connecticut school

Gun control supporters pushed the White House to move quickly to harness the anguish and outrage at the Newtown massacre, in which 20 first-graders and six adults died. But the president needs time to build consensus for any action in Congress, said an advisor who asked not to be named discussing strategy. Aides said the president wanted to avoid pushing gun partisans into their usual foxholes on an issue that has deeply entrenched and well-funded interests.

White House spokesman Jay Carney declined to outline an agenda or offer policy specifics, although he said gun control measures would be under consideration.

"I don't have a series of proposals to present to you," Carney told reporters. "This is a complex issue that requires complex solutions, and he looks forward to engaging the American people in an effort to do more."

FULL COVERAGE: Shooting at Connecticut school

Obama met at the White House on Monday with Vice President Joe Biden and senior staff members to consider ways to respond. Atty. Gen. Eric H. Holder Jr., Health and Human Services Secretary Kathleen Sebelius and Education Secretary Arne Duncan also took part.

Experts say the president could take some steps to strengthen gun laws without congressional approval.

For example, the law already forbids some mentally incompetent people and drug users from buying guns. But the administration could expand its use of government resources to improve the database used in background checks, or better fund efforts that help state and local agencies improve their databases.

A string of previous tragedies sparked similar calls for stiffer gun laws, only to see pressure fade as politics and time eroded the sense of urgency.

The Justice Department began an effort to research measures that would tighten gun laws and improve background checks, without banning weapons, after a gunman killed six people and wounded 13 others, including Rep. Gabrielle Giffords (D-Ariz.), in Tucson in 2011. Some of the changes did not require congressional action. Most have not been imposed.

"My judgment is that if we're going to move, we need to move on them fairly expeditiously," said Christopher H. Schroeder, who researched the policies at the Office of Legal Policy before leaving the Justice Department this year. "As horrific as the Connecticut shooting was, memories tend to fade. There's a limited window of opportunity to act."

In an emotional speech Sunday night in Newtown, Obama raised expectations of direct engagement when he promised to use "whatever power this office holds" to prevent similar mass killings. He did not mention the words "gun" or "weapon" in his speech, or offer specifics.

It was the fourth time Obama had addressed the nation to express grief after a monstrous crime. He wiped away a tear as he spoke, two days after a poignant White House appearance in which he repeatedly dabbed his eyes and fought to maintain composure as he decried the school massacre.

Some signs indicated the Newtown killings could weaken opposition to new gun laws in Congress.

Two prominent Democrats — Sens. Joe Manchin III of West Virginia and Mark R. Warner of Virginia — said Monday that despite their history of defending gun rights, they now believed tighter laws were needed. Manchin, whose candidacy was endorsed by the National Rifle Assn., said the Newtown shooting "has changed us."

"Everything should be on the table," said Manchin, who in a 2010 campaign TV ad fired a rifle at one of Obama's legislative proposals. "We need to move beyond dialogue — we need to take a sensible, reasonable approach to the issue of mass violence."

Polls often find support for tighter gun laws evenly divided, but a survey released Monday suggested a slight shift in favor of gun control.

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