Wednesday morning headlines

Dow over 13,000: At least in the first few minutes of trading. This could be the day the index gets over that milestone, what with strong earnings from Boeing and Pepsico this morning - and Amazon yesterday. Update: After crossing the magic 13,000 mark, there was the expected profit-taking. After a little over an hour, the Dow is at 12,989.

Where's Henry Yuen?: You remember him - the former CEO of L.A.-based Gemstar-TV Guide who was ordered to pay $22.3 million for his role in fraudulently inflating revenues between 2000 and 2002. He also deleted the contents of his hard drive, which supposedly had all the emails and accounting documents that would bring him down. Thing is, Yuen is not behind bars and he hasn't paid a penny to the feds. Instead, he's pursued new business ventures in Asia while collecting about $13 million in salary, benefits and attorney fees from Los Angeles-based Gemstar. He's also sold at least $30 million in Gemstar stock. And he’s kind of, well, disappeared. From the WSJ:

Mr. Yuen's case so far marks an unusual black eye for the government in the high profile white-collar crime cases of recent years. Prosecutors went after him on a coverup crime, obstruction of justice, instead of trying to prove complex financial wrongdoing in court. The tactic, which some legal experts liken to using tax-evasion statutes to nail mobsters, was used in the prosecution of Martha Stewart and other defendants in recent years. But the short-cut tactic has backfired with Mr. Yuen. In 2005, prosecutors struck a deal under which the former chief executive pleaded guilty to a single count of obstruction of justice in exchange for six months of home detention and a $250,000 fine and a $1 million charitable contribution.

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Prosecutors have continued to investigate and expect to refile charges against Mr. Yuen, according to a spokesman for the U.S. Attorney's office in Los Angeles. But the clock is ticking and it's looking increasingly unlikely he'll face more serious accounting-fraud charges. The five-year statute of limitations on many accounting-fraud charges has already expired. Technically there are ways for prosecutors to extend the statutes. But people familiar with the matter say the government is not pursuing accounting-fraud charges at this time, and intends to recharge Mr. Yuen with obstruction of justice.

Jobs in clear?: That seems to be the general view this morning, in spite of a statement yesterday by the attorney of Apple's former CFO who implicates CEO Steve Jobs in the company's backdating of stock options. The question, as always in these things, is intent. Jobs may have been told that there was some accounting issues inherent in backdating - but was Jobs aware that it would involve some hanky-panky? That's where the feds seem stuck, and they might not have that evidence to develop a case. SJ Mercury-News

Milken shindig: In finally discovering Michael Milken's annual global conference of big shots and big thinkers, the LAT couldn't help but push the Predator's Ball angle. For the uninitiated, the Predator's Ball was the annual gathering of Gordon Gekko types that Milken hosted in the late 80s at the Beverly Hills Hotel (that's when he was called the "junk bond king"). The multi-day event was highlighted – at least for some – with the infamous "no wives" Thursday night party. (By the way, the Times got it wrong when it said the ball was at the Beverly Hilton, a point only worth mentioning because those BHH bungalows were a centerpiece for the festivities.) Anyway, the Milken conference has indeed become a very big deal - but it's been one for many years. For all that time, the paper had barely given it a mention. From the LAT:

The event has grown into a confab of Hollywood heavyweights and political and academic stars — even the occasional Olympian. Milken sets the agenda, and it's an eclectic one, from the future of K-12 education to the future of prostate cancer treatment to the future of capitalism. (Luckily for the high-net-worth gathering, the conclusion of Monday's panel of three Nobel laureates in economics was that the free-market system had one.) Think the World Economic Forum in Davos, Switzerland, without the skiing and antiglobalization protesters and with better shopping. (Which is why some have dubbed this Davos West.) Or the Clinton Global Initiative without the presidential invitation and the $15,000 annual membership fee.

Speaking of big money: Writing about the outrageous wealth of hedge fund managers has become quite the thing. The most prominent example is Tom Wolfe's 7,500-word piece in the premiere issue of Portfolio. NY magazine ran a multipart series on the subject this month, and Alpha magazine is out with its latest ranking of the top-paid hedge fund managers. Three managers, according to the magazine, were over the $1 billion mark in earnings last year. If they were employed by a public company, where compensation numbers must be disclosed, there would be rioting in the streets (maybe). But the rules are different when you're private. Even so, Democrats in Congress have been trying to place some regulatory controls on the largely unregulated hedge fund industry. NYT

KFC's famous potatoes: Talk about your marketing challenges. The fast-food chain has agreed to tell customers that its fried or baked potatoes contain a suspected carcinogen. KFC doesn't have much choice, since it's trying to resolve a lawsuit filed by the state Attorney General's office. The suit involves the enforcement of Proposition 65, which requires businesses to provide "clear and reasonable" warnings before exposing people to potentially dangerous substances. Cooked potato products contain higher levels of acrylamide than other foods - and acrylamide is a chemical known to cause cancer. LAT

Sign of the times: In Touch magazine tried something unusual last week. Instead of having the usual celebrity cover, the magazine had images of the Virginia Tech shooting. And guess what: it was a newsstand bust, perhaps the lowest-selling issue in two years. Even at People, which will often cover real news events, newsstand sales were only so-so. The best performer the week was OK!, with its exclusive photos of Larry Birkhead and Dannielynn, the daughter he had with Anna Nicole Smith. Makes you want to cry. NY Post