DealBook: Big Investors Stiffen Their Resistance to Dell's Offer

12:29 p.m. | Updated

Michael S. Dell’s plan to take the computer maker private for $24.4 billion is the biggest leveraged buyout since the financial crisis.

It is also quickly becoming one of the biggest deals in years to face a shareholder uprising.

The opposition to Mr. Dell’s buyout effort now includes the mutual fund giant T. Rowe Price, which on Tuesday said that it opposed the offer at its current price of $13.65 a share.

“We believe the proposed buyout does not reflect the value of Dell and we do not intend to support the offer as put forward,” Brian C. Rogers, T. Rowe Price’s chief investment officer, said in a statement.

And Southeastern Asset Management, an investment firm, stepped up its campaign against the Dell takeover bid. The asset manager disclosed on Tuesday that it had hired D. F. King & Company, a proxy solicitation firm, in what may be the first step toward a fight against Dell’s board.

Southeastern has also hired a longtime mergers lawyer, Dennis Block of Greenberg Traurig, as an outside legal adviser, according to a person briefed on the matter. It has suggested that potential tactics could include a lawsuit or an intervention by a Delaware judge.

The moves by the two shareholders — the biggest holders of Dell stock outside of Mr. Dell himself — signal growing discontent with the transaction. While Dell’s founder controls about 16 percent of the PC maker’s stock, his offer requires the assent of a majority of shareholders excluding his stake.

Together, Southeastern and T. Rowe Price control nearly 13 percent of Dell’s shares.

“I’m glad to see more people going public with their thoughts,” said Richard S. Pzena, the founder of Pzena Investment Management. His firm’s 0.73 percent stake makes him the 21st-biggest shareholder, according to Bloomberg data.

“I hope it leads to a scuttling of the deal or a higher price,” he added.

With Pzena Investment and several smaller shareholders indicating resistance, roughly 19 percent of the shares that are independent are currently opposed to the buyout.

A Dell spokesman, David Frink, referred to a statement from last week reiterating that the offer was “in the best interests of stockholders” and offered “an attractive and immediate premium.”

Since the deal was announced, Dell’s shareholder base has changed significantly. Some 20 percent of company shares are now held by hedge funds betting on the buyout’s prospects, the investment bank Jefferies estimates. Some of these firms may now be wagering that Mr. Dell and his partners will be forced to sweeten their offer, though others are inclined to reap a quick payout.

Shares of Dell closed on Tuesday at $13.79, above the offer, suggesting that investors are expecting a bump in price.

Announced last week, Dell’s $24.4 billion offer was heralded as one of the biggest private equity deals in years, approaching heights not seen since mega-buyouts like the $26 billion takeover of Hilton Hotels in the summer of 2007. To pull off the bid, Mr. Dell has teamed up with the investment firm Silver Lake Partners and Microsoft, as well as four banks to line up more than $13 billion in financing.

But the outspokenness of Dell’s shareholders instead is more reminiscent of leveraged buyouts that nearly foundered after investor challenges. Bain Capital and THL Partners revised their takeover bid for Clear Channel Communications multiple times before shareholders accepted a roughly $27.5 billion bid.

And suitors for Biomet improved their offer to $11.4 billion after the opposition of a big investor, P. Schoenfeld Asset Management.

An analyst with Jefferies, Peter Misek, wrote in a research note on Tuesday that the buyer consortium might need to raise its offer to $15 a share to succeed.

“I think the bid, as it stands, will not succeed,” he said in a telephone interview. “At $15, you’ll be able to get a simple majority of shareholders.”

It is unclear yet whether the Dell offer will follow the same path as Clear Channel or Biomet; any shareholder vote to approve the deal is at least several months away. And the company contends that a special committee of its board exhausted every alternative to its founder’s bid.

That same committee has also hired an investment bank to supervise a 45-day “go shop” period intended to flush out potential rival bids. People involved in the deal pointed to a lack of interest from other suitors in the last several weeks as evidence that the $13.65-a-share bid was the best hope for the struggling company.

Other investors appear to disagree. Southeastern has argued that Dell is worth closer to $24 a share. Mr. Pzena said that he estimated the stock’s fair value at about $25 over the long term.

(Analysts have speculated that Southeastern may be motivated by the high average price the firm paid for its holdings, which some have estimated at over $20. A person briefed on the matter estimated that the mutual fund manager paid close to $16.90 a share on average.)

Mr. Misek noted that many mutual fund managers might be willing to risk the collapse of the management buyout. These investment executives have already locked in gains from last year, and may be wagering that Dell shares will not reach their previous depths of below $10.

One possibility that Southeastern and others have raised is a leveraged recapitalization, in which Dell would borrow billions of dollars to pay out a dividend or buy back shares.

“I don’t think there’s much downside risk in the stock price anymore,” Mr. Pzena said. “I think there will be a lot of pressure on the board to act.”

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Iran Converts Enriched Uranium to Reactor Fuel, Reports Say

PARIS — As it prepares for two sets of negotiations with outsiders on its disputed nuclear program, Iran said on Tuesday that it was converting some of its enriched uranium into reactor fuel, the state news agency IRNA reported, potentially limiting the expansion of stockpiles that the West fears could be used for weapons.

Iranian officials are to meet on Wednesday in Tehran with Herman Nackaerts, the deputy director of the International Atomic Energy Agency, the United Nations nuclear watchdog, who has been pressing for access to a restricted military area at Parchin, 20 miles south of Tehran. International inspectors suspect the site may have been used for testing bomb triggers.

Later this month, Iranian negotiators are to meet in Kazakhstan with representatives of six powers — the United States, China, Russia, Britain, France and Germany — for a further round in a series of long-running and inconclusive talks about curbing Tehran’s nuclear enrichment program.

Western countries suspect that Tehran is seeking to acquire the technology to make nuclear weapons, but Iran says the program is for peaceful purposes such as the creation of reactor fuel for civilian use.

At a news conference on Tuesday in Tehran, Ramin Mehmanparast, the Foreign Ministry spokesman, was asked to comment on a news report that Iranian scientists had converted some uranium enriched to 20 percent purity into fuel for a research reactor in Tehran. The spokesman said the “work is being done” and details had been sent to the I.A.E.A., which is based in Vienna.

Iran’s nuclear program came under added scrutiny on Tuesday after North Korea conducted its third nuclear test since many intelligence officials believe the two countries share nuclear knowledge, though so far there is no hard evidence to substantiate that belief.

Reuters quoted Mr. Mehmanparast as saying: “We think we need to come to a point where no country will have any nuclear weapons.” While all countries should be allowed to use nuclear technology for peaceful purposes, he said, “all weapons of mass destruction and nuclear arms need to be destroyed.”

Iran’s stockpile of enriched uranium is believed by Western negotiators and international inspectors to be of far lower purity than is required to make nuclear weapons. But, diplomats in Vienna said on Tuesday, enriched uranium converted into reactor fuel is more difficult to enrich to a higher degree of purity. “It’s a step away from weaponization,” one diplomat said, speaking in return for anonymity because he was not authorized to comment publicly.

Some analysts argue that, by slowing the growth of its stockpile, Tehran could delay the moment when it acquires sufficient 20 percent enriched uranium to trigger a response by Israel, which has signaled readiness to attack Iran’s nuclear sites.

The likely outcomes of the forthcoming sets of negotiations remain unclear.

Mr. Mehmanparast, the Iranian spokesman, said the talks with the I.A.E.A. team in Tehran on Wednesday had “bright” prospects if the I.A.E.A. negotiators recognized Iran’s rights, IRNA said.

But Yukiya Amano, the director general of the I.A.E.A., said Monday that “the outlook is not bright” for obtaining permission to visit the Parchin site. Mr. Amano’s remarks contrasted with a more optimistic tone from the agency less than a month ago, when his deputy, Mr. Nackaerts, expressed hope that the negotiations on Wednesday would agree an inspection plan.

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Back to New Orleans: Beyonce to perform at Essence

NEW ORLEANS (AP) — Beyonce is coming back to New Orleans and back to the Superdome.

After entertaining a huge television audience in a packed dome during the Super Bowl halftime show, Beyonce is now scheduled to perform at the Essence Festival.

Festival officials said Monday that she will return to the dome to headline one of three night concerts during the festival, which is set for the Fourth of July weekend.

Beyonce joins an Essence musical line-up that also includes Jill Scott, Maxwell, New Edition, Charlie Wilson, Keyshia Cole, LL Cool J, Brandy and others.

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DealBook: S.E.C. Nominee Mary Jo White Discloses Law Firm Wealth

It is no secret that the partners at the white-shoe law firms Debevoise & Plimpton and Cravath, Swaine & Moore earn a decent living. The financial disclosure form of Mary Jo White, the Obama administration’s pick to become the next chairwoman of the Securities and Exchange Commission, reveals just how decent.

Ms. White and her husband, John White, have amassed at least $16 million, according to the filing. Ms. White, 65, heads the litigation department at Debevoise; Mr. White, 65, is co-chairman of the corporate governance practice at Cravath.

As part of her disclosures, Ms. White also explained how she would deal with potential conflicts of interest. In a surprise move, she wrote that her husband would convert his partnership at Cravath from equity to nonequity status.

While many large corporate law firms have nonequity partners, meaning they hold the title of partner but have no ownership stake, each of Cravath’s 87 partners has equity in the firm. As a nonequity partner, Mr. White will receive a fixed salary and an annual performance bonus, according to the filing.

Ms. White also said that, for the time she serves as the S.E.C.’s chairwoman, Mr. White would not communicate with the commission on behalf of Cravath or any client in connection with rules proposed by the S.E.C. Such a restriction is not immaterial for Cravath, as Mr. White has vast experience in securities law and deep connections to the S.E.C., having served as the director of the commission’s corporation finance unit from 2006 to 2008.

The disclosure form contained a number of other revelations. Mr. White has investments in three hedge funds, including a vehicle managed by Och-Ziff, a large publicly traded investment firm started by a former Goldman Sachs partner. He will divest his interest in all three funds upon her confirmation, according to the filing.

The couple also owns 40 acres of farmland and unsold crops in Pocahontas County, Iowa, that are valued at $100,000 to $250,000.

As for Ms. White, a former United States attorney in Manhattan, she received more than $2.4 million as a Debevoise partner last year, according to the filing. And she said that she planned to retire as a Debevoise partner upon becoming S.E.C. chairwoman, at which point she would enjoy the benefits of the firm’s lucrative retirement plan. The disclosure says that Ms. White will receive a monthly lifetime retirement payment of $42,500, amounting to $510,000 annually.

However, instead of making a monthly retirement payment for the next four years while she runs the commission, Debevoise will make a lump-sum payment within 60 days of her appointment, the filing disclosed.

The Whites’ net worth is most likely far greater than $16 million, which represents the low number in a range of possible amounts. Government officials are required to disclose their net worth only within broad ranges.

For instance, the Whites own seven different investments — including a Vanguard high yield bond fund and a Vanguard emerging markets fund — worth $1 million to $5 million. At the low end, those seven funds would be worth $7 million; but at the high end, they would be valued at $35 million.

Ms. White also said that she would avoid some matters for a period of time that involve her former clients, a list that includes JPMorgan Chase, Microsoft and UBS.

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Pope Benedict XVI Says He Will Resign

Samantha Zucchi Insidefoto/European Pressphoto Agency

Pope Benedict XVI blessing members of the Order of the Knights of Malta at the Vatican on Saturday.

ROME — Citing advanced years and infirmity, Pope Benedict XVI, the former Cardinal Joseph Ratzinger, stunned the Roman Catholic world on Monday by saying that he would resign on Feb. 28, less than eight years after he took office, the first pope to do so in six centuries.

A profoundly conservative figure whose papacy was overshadowed by clerical abuse scandals, the pope, 85, was elected by fellow cardinals in 2005 after the death of his predecessor, John Paul II.

After examining his conscience “before God,” he said on Monday, “I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise” of his position as head of the world’s Roman Catholics.

Federico Lombardi, the Vatican spokesman, said Benedict would continue to carry out his papal duties until Feb. 28 and that a successor could probably be elected by Easter which falls this year on March 31. But, he added, that date was “not an announcement, it’s a hypothesis.”

While there had been questions about Benedict’s health and infirmity, the timing of his announcement — even by the Vatican’s official account — sent shock waves across the globe, even though Benedict had in the past endorsed the notion that an incapacitated pope could resign.

“The pope took us by surprise,” said Vatican spokesman Federico Lombardi, who explained that many cardinals were in Rome on Monday for a ceremony at the Vatican and heard the pope’s address. Italy’s outgoing Prime Minister Mario Monti said he was “very shaken by the unexpected news.”

The announcement plunged the Roman Catholic world into frenzied speculation about his likely successor and seemed likely to inspire many contrasting evaluations of a papacy that was seen as both conservative and contentious.

The pope made his initial announcement in Latin but his statement was translated into seven languages — Italian, French, English, German, Polish, Portuguese and Spanish.

“In today’s world, subject to so many rapid changes and shaken by questions of deep relevance for the life of faith, in order to govern the bark of St. Peter and proclaim the gospel, both strength of mind and body are necessary, strength which in the last few months has deteriorated in me to the extent that I have had to recognize my incapacity to adequately fulfill the ministry entrusted to me,” the pope said.

“For this reason, and well aware of the seriousness of this act, with full freedom, I declare that I renounce the ministry of Bishop of Rome, Successor of St. Peter.”

Elected on April 19, 2005, Pope Benedict said his papacy would end on Feb. 28. At a news conference, the Vatican spokesman said the pope did not express strong emotion as he made his announcement but spoke with “great dignity, great concentration and great understanding of the significance of the moment.”

At the time of his election, Benedict was a popular choice within the college of 115 cardinals who chose him as a man who shared — and at times went beyond — the conservative theology of his predecessor and mentor, John Paul II, and seemed ready to take over the job after serving beside him for more than two decades.

In the final years of John Paul II’s papacy, which were dogged by illness, Benedict, then Cardinal Ratzinger has said if the pope “sees that he absolutely cannot do it anymore, then certainly he will resign.”

When he took office, Pope Benedict’s well-known stands included the assertion that Catholicism is “true” and other religions are “deficient;” that the modern, secular world, especially in Europe, is spiritually weak; and that Catholicism is in competition with Islam. He had also strongly opposed homosexuality, the ordination of women priests and stem cell research.

Born on April 16, 1927, in Marktl am Inn, in Bavaria, he was the son of a police officer. He was ordained in 1951, at age 24, and began his career as a liberal academic and theological adviser at the Second Vatican Council, supporting many efforts to make the church more open.

But he moved theologically and politically to the right. Pope Paul VI named him bishop of Munich in 1977 and appointed him a cardinal within three months. Taking the chief doctrinal job at the Vatican in 1981, he moved with vigor to quash liberation theology in Latin America, cracked down on liberal theologians and in 2000 wrote the contentious Vatican document “’Dominus Jesus,” asserting the truth of Catholic belief over others.

The last pope to resign was Gregory XII, who left the papacy in 1415 to end what was known as the Western Schism among several competitors for the papacy.

Benedict’s tenure was caught up in growing sexual abuse scandals in the Roman Catholic Church that crept ever closer to the Vatican itself.

Elisabetta Povoledo reported from Rome, and Alan Cowell from London.

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Producers: 'Chicago' cast to join Oscar performers

LOS ANGELES (AP) — Academy Awards producers Craig Zadan and Neil Meron have run out of rehearsal space. Dressing rooms, too.

The award-winning production duo is planning the most performance-filled Oscar show ever. They promise a "wow moment" in each of its 13 acts, so the show demands a more dynamic stage and more dressing rooms and rehearsal time than previous Oscar productions.

"I don't think any Oscars have been as performance-based," Meron said.

It's no surprise, given the pair's hit-filled history: They produced 2003's best picture, "Chicago," and count TV's "Smash" and the recent Broadway revival of "How to Succeed in Business Without Really Trying" among their credits.

Running out of space for their Oscar production's A-list roster of performers — including Barbra Streisand, Adele and Norah Jones — is what Zadan calls a "great problem."

"When you do an Oscar show, you don't have a dressing room problem. The presenters don't get dressing rooms. And how many people perform on the Oscars, like one or two?" he said. "We have a staggering amount of performers, and each of them needs a dressing room... We're measuring the magnitude of how big the show is by the fact that we don't have (enough) dressing rooms."

Just added to the list of stars who may need spots? The cast of "Chicago."

The producers announced Monday that Renee Zellweger, Catherine Zeta-Jones, Queen Latifah and Richard Gere will reunite on the stage where "Chicago" won its Oscar 10 years ago.

"In a night of celebration of the music of the movies, we find it very appropriate," Meron said.

So will the musical cast sing?

"We can't talk about what they're going to do!" Zadan said.

Here's what they will talk about:

— Expect a dynamic, screen-filled set to accommodate the movie-focused numbers: "We're using a lot of cutting-edge technology with new LED screens of different sizes, shapes and configurations... It's kind of thrilling what we're doing with screens," Zadan said. "There will be, too, the regular screen that you have to use each year... but then we have all kinds of other screens that we're using in the show that are completely unique and different and allow us to do stuff with cinema, so it's not a concert thing where somebody comes out and sings a song. It's all integrated into movies."

— Look for a lot of host Seth MacFarlane: "He's going to be very present as a host, as a host should," Meron said.

— And expect to hear him show off his chops: "Seth will sing. He's got a great voice," Zadan said.

"Seth really does understand and have great reverence for the music of the movies," Meron added. "He loves it."

— And about those "wow moments?" Among them will be a celebration of the James Bond film franchise, a tribute to movie musicals, Streisand, Adele, a "special appearance" by Daniel Radcliffe, Charlize Theron, Channing Tatum and Joseph Gordon-Levitt, and maybe something from the cast of "Chicago."

"We think seeing the cast of 'The Avengers' is pretty wow," Meron said.

Better book them a dressing room.

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Contact Sandy Cohen at www.twitter.com/APSandy.

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Well: Getting the Right Addiction Treatment

“Treatment is not a prerequisite to surviving addiction.” This bold statement opens the treatment chapter in a helpful new book, “Now What? An Insider’s Guide to Addiction and Recovery,” by William Cope Moyers, a man who nonetheless needed “four intense treatment experiences over five years” before he broke free of alcohol and drugs.

As the son of Judith and Bill Moyers, successful parents who watched helplessly during a 15-year pursuit of oblivion through alcohol and drugs, William Moyers said his near-fatal battle with addiction demonstrates that this “illness of the mind, body and spirit” has no respect for status or opportunity.

“My parents raised me to become anything I wanted, but when it came to this chronic incurable illness, I couldn’t get on top of it by myself,” he said in an interview.

He finally emerged from his drug-induced nadir when he gave up “trying to do it my way” and instead listened to professional therapists and assumed responsibility for his behavior. For the last “18 years and four months, one day at a time,” he said, he has lived drug-free.

“Treatment is not the end, it’s the beginning,” he said. “My problem was not drinking or drugs. My problem was learning how to live life without drinking or drugs.”

Mr. Moyers acknowledges that treatment is not a magic bullet. Even after a monthlong stay at a highly reputable treatment center like Hazelden in Center City, Minn., where Mr. Moyers is a vice president of public affairs and community relations, the probability of remaining sober and clean a year later is only about 55 percent.

“Be wary of any program that claims a 100 percent success rate,” Mr. Moyers warned. “There is no such thing.”

“Treatment works to make recovery possible. But recovery is also possible without treatment,” Mr. Moyers said. “There’s no one-size-fits-all approach. What I needed and what worked for me isn’t necessarily what you or your loved one require.”

As with many smokers who must make multiple attempts to quit before finally overcoming an addiction to nicotine, people hooked on alcohol or drugs often must try and try again.

Nor does treatment have as good a chance at succeeding if it is forced upon a person who is not ready to recover. “Treatment does work, but only if the person wants it to,” Mr. Moyers said.

Routes to Success

For those who need a structured program, Mr. Moyers described what to consider to maximize the chances of overcoming addiction to alcohol or drugs.

Most important is to get a thorough assessment before deciding where to go for help. Do you or your loved one meet the criteria for substance dependence? Are there “co-occurring mental illnesses, traumatic or physical disabilities, socioeconomic influences, cultural issues, or family dynamics” that may be complicating the addiction and that can sabotage treatment success?

While most reputable treatment centers do a full assessment before admitting someone, it is important to know if the center or clinic provides the services of professionals who can address any underlying issues revealed by the assessment. For example, if needed, is a psychiatrist or other medical doctor available who could provide therapy and prescribe medication?

Is there a social worker on staff to address challenging family, occupational or other living problems? If a recovering addict goes home to the same problems that precipitated the dependence on alcohol or drugs, the chances of remaining sober or drug-free are greatly reduced.

Is there a program for family members who can participate with the addict in learning the essentials of recovery and how to prepare for the return home once treatment ends?

Finally, does the program offer aftercare and follow-up services? Addiction is now recognized to be a chronic illness that lurks indefinitely within an addict in recovery. As with other chronic ailments, like diabetes or hypertension, lasting control requires hard work and diligence. One slip need not result in a return to abuse, and a good program will help addicts who have completed treatment cope effectively with future challenges to their recovery.

How Families Can Help

“Addiction is a family illness,” Mr. Moyers wrote. Families suffer when someone they love descends into the purgatory of addiction. But contrary to the belief that families should cut off contact with addicts and allow them to reach “rock-bottom” before they can begin recovery, Mr. Moyers said that the bottom is sometimes death.

“It is a dangerous, though popular, misconception that a sick addict can only quit using and start to get well when he ‘hits bottom,’ that is, reaches a point at which he is desperate enough to willingly accept help,” Mr. Moyers wrote.

Rather, he urged families to remain engaged, to keep open the lines of communication and regularly remind the addict of their love and willingness to help if and when help is wanted. But, he added, families must also set firm boundaries — no money, no car, nothing that can be quickly converted into the substance of abuse.

Whether or not the addict ever gets well, Mr. Moyers said, “families have to take care of themselves. They can’t let the addict walk over their lives.”

Sometimes families or friends of an addict decide to do an intervention, confronting the addict with what they see happening and urging the person to seek help, often providing possible therapeutic contacts.

“An intervention can be the key that interrupts the process and enables the addict to recognize the extent of their illness and the need to take responsibility for their behavior,”Mr. Moyers said.

But for an intervention to work, Mr. Moyers said, “the sick person should not be belittled or demeaned.” He also cautioned families to “avoid threats.” He noted that the mind of “the desperate, fearful addict” is subsumed by drugs and alcohol that strip it of logic, empathy and understanding. It “can’t process your threat any better than it can a tearful, emotional plea.”

Resource Network

Mr. Moyer’s book lists nearly two dozen sources of help for addicts and their families. Among them:

Alcoholics Anonymous World Services www.aa.org;

Narcotics Anonymous World Services www.na.org;

Substance Abuse and Mental Health Services Administration treatment finder www.samhsa.gov/treatment/;

Al-Anon Family Groups www.Al-anon.alateen.org;

Nar-Anon Family Groups www.nar-anon.org;

Co-Dependents Anonymous World Fellowship www.coda.org.

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This is the second of two articles on addiction treatment. The first can be found here.

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DealBook: S.E.C.'s Revolving Door Hurts Its Effectiveness, Report Says

Robert S. Khuzami took a step through Washington’s revolving door on Friday, departing his post as one of Wall Street’s top enforcers en route to the private sector, where he is expected to reap millions.

A new report suggests that Mr. Khuzami, like other Securities and Exchange Commission officials who pass between Washington and Wall Street, will be well worth the pay.

The Project on Government Oversight, or POGO, a nonprofit watchdog group long critical of the revolving door, is set to release a study on Monday highlighting a pattern of S.E.C. alumni going to bat for Wall Street firms — and winning. The report, similarly skeptical of Wall Street lawyers joining the S.E.C., cites recent enforcement cases and scuttled money market regulations to underscore its concerns.

“Former employees of the Securities and Exchange Commission routinely help corporations try to influence S.E.C. rule-making, counter the agency’s investigations of suspected wrongdoing, soften the blow of S.E.C. enforcement actions, block shareholder proposals and win exemptions from federal law,” the report says.

By way of example, it says that in three cases against UBS, after enforcement actions threatened to limit the giant Swiss bank’s ability to issue new securities, the bank hired former S.E.C. lawyers. Each time, the report says, the agency granted relief. (The S.E.C. has defended such decisions as being in the best interest of investors, who might suffer if an otherwise stable bank was suddenly unable to sell securities.)

The watchdog report provides only anecdotal evidence of bias and does concede that the S.E.C. adopted checks on influence peddling. Nonetheless, it raises questions about the rising consequences of the revolving door.

Even as Mr. Khuzami is leaving as the S.E.C.’s enforcement chief, President Obama recently named Mary Jo White as his choice to run the agency. Ms. White is a former federal prosecutor who built a lucrative legal practice defending Wall Street executives.

The POGO report’s findings were based on interviews with current and former S.E.C. officials and thousands of federal records obtained through the Freedom of Information Act. It is the second major report the group has issued on the topic, and it comes on the heels of other research yielding mixed conclusions about the importance of the revolving door.

The Government Accountability Office issued a report in 2011 chastising the S.E.C. for failing to keep track of ethics advice the agency gives past and current employees, which the report argued could minimize postemployment conflicts of interest. The study, which described the S.E.C.’s policies as being consistent with those of other agencies, did go on to note that the financial system might benefit from the agency hiring outsiders well versed in Wall Street minutiae.

In a study last year, a group of accounting experts concluded that, contrary to public concerns, the revolving door actually toughened enforcement results. S.E.C. lawyers enforce a hard line at the agency, that study said, partly to showcase their investigative prowess to future employers.

The accounting professors’ study lent support to the S.E.C.’s argument that it goes to great lengths to prevent conflicts of interest. Mr. Khuzami, who has not announced his next job, will face at least a one-year “cooling off” period preventing him from lobbying the S.E.C. on behalf of a client. For an additional year, he must file certain documentation with the S.E.C. before facing off with the agency.

S.E.C. officials have also argued that despite Mr. Khuzami’s Wall Street résumé — he served as a top lawyer for Deutsche Bank — he oversaw one of the most aggressive periods of prosecution in the agency’s history. He revamped the agency’s enforcement unit in the wake of the financial crisis, the officials noted, and took aim at Wall Street giants like Goldman Sachs.

“We follow governmentwide regulations and laws that deter conflicts and ensure impartiality,” John Nester, the agency’s spokesman, said in an e-mail. “We decide issues on their merits according to the rules and regulations governing the securities industry regardless of whether the requesters have an S.E.C. background or not.”

For decades, lawyers have passed through the revolving door on their way to government posts and back again.

The POGO report found that from 2001 through 2010, 419 alumni of the S.E.C. filed almost 2,000 disclosure forms saying they planned to represent an employer or client before the agency. William R. Baker III, a former associate director of enforcement and now a lawyer at Latham & Watkins, was the top filer, submitting 46 notices.

The report also found that former employees had helped companies avoid certain penalties and thwart regulatory initiatives, including an effort by Mary L. Schapiro, then its chairwoman, to reform money market funds, a sector central to the financial crisis. The report noted that former S.E.C. employees had lobbied to block the plan, and added that Luis Aguilar, an S.E.C. commissioner who previously was an executive at Invesco, a money management firm, played a role in “derailing” Ms. Schapiro’s effort.

The watchdog group was also critical of last year’s study by accounting researchers who found that S.E.C. actions were not harmed but strengthened by the revolving door.

That study, POGO said in its report, looked at “only a sliver” of the S.E.C.’s work. “They did not examine, for instance, how the revolving door affects the S.E.C.’s regulation of Wall Street, its granting of relief to specific companies, its handling of cases related to the financial crisis or its decisions to drop investigations without bringing charges.”

Shivaram Rajgopal of Emory University, the lead author of the accounting group’s study, defended its findings, saying it spanned 17 years. He added that while it did not include the financial crisis, it did look at investigations like the one into Enron, the energy company that filed for bankruptcy in 2001 amid an accounting scandal.

“Studies by definition are limited,” he added.

The new report from the watchdog group may be a topic at a New York City Bar Association panel on the revolving door scheduled for Tuesday in New York, a debate for which Mr. Khuzami was initially scheduled. On Friday, Mr. Khuzami caused a stir among some fellow panelists when he withdrew, citing a “conflict.”

Mr. Khuzami later clarified it was a scheduling conflict, not a conflict of interest.

A version of this article appeared in print on 02/11/2013, on page B1 of the NewYork edition with the headline: S.E.C.’s Revolving Door Hurts Its Effectiveness, Report Says.

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After the Big Snowfall, the Struggle to Dig Out

Residents and emergency workers in the Northeast struggled to dig out Sunday after a gigantic midwinter storm left much of the region buried under drifting snow and reeling from gale-force wind.

As temperatures dipped into the teens across the region, utility crews worked to restore power to the more than 650,000 customers who were blacked out by the storm.

By Sunday morning, more than 300,000 customers remained without power, mostly in southeastern Massachusetts and Cape Cod, Rhode Island and the shore line of eastern Connecticut. NStar, which serves Massachusetts, said that many regions were still too dangerous to send in crews.

Road crews also labored into the night to remove snow from streets and sidewalks, piling it in whatever open space they could find. In Connecticut, crews were using a front-end loader late Saturday night to remove snow from I-95 near Fairfield.

The storm, spawned by the collision of two weather systems, touched more than 40 million people, though early reports suggested it accounted for only a handful of deaths. One awful case involved a young boy shoveling snow with his father in the Dorchester neighborhood of Boston who died of carbon monoxide poisoning after he retreated inside a car to warm up. The exhaust pipe was blocked by snow.

More than three feet of snow fell on parts of Connecticut, and more than two feet accumulated on Long Island and in Massachusetts, causing coastal flooding that forced evacuations of some Massachusetts communities. The Weather Service said it had reports out of New Haven County of 36.2 inches in Oxford and 38 inches in Milford. In Commack, on Long Island, 29.1 inches of snow and 27.5 inches at MacArthur Airport in Islip. In Boston, the official accumulation was 24.9 inches, the fifth highest in city history.

Some streets in Connecticut resembled ski slopes or mountain passes, and Gov. Dannel P. Malloy asked the federal government on Saturday for help.

“As we continue with the recovery from this historic winter storm, I am asking the federal government to provide us assistance with this process,” Governor Malloy said.

Airlines were also trying to return to normal Sunday, after canceling more than 5,000 flights since Friday; the fallout could reverberate for days. Logan International Airport in Boston and the three major airports around New York City have all resumed operations.

For many areas, “this storm will rank in the top five of recorded snowstorms,” said David Stark, a meteorologist for the National Weather Service in eastern Suffolk County on Long Island. Outside his office, measurements have been taken since 1949, and this storm beat them all with 30.9 inches.

“The way this evolved was a very classic winter nor’easter,” Mr. Stark said. “The way it formed and moved is well understood, and it is the type of situation we have seen in the past — but this storm brought more moisture and therefore more snow.”

Mayor Michael R. Bloomberg expressed relief Saturday that the city had avoided worse damage and offered to assist the more heavily pounded neighboring states and Long Island, the hardest-hit part of New York State. Most roads in the city, he said, were well on the way to being cleared, and he thanked people for staying off the streets during the storm. The accumulation in Central Park was measured at 11.4 inches by the time the snow relented at daybreak Saturday.

“I think it is fair to say we were very lucky,” Mr. Bloomberg said.

The National Weather Service received reports of flooding up and down the Massachusetts coast, especially in areas just north and south of Boston. Water carrying slabs of ice sloshed through the streets and lapped against houses. The National Guard was dispatched to assist in evacuations.

Waves off the South Shore of Boston and parts of Cape Cod measured as high as 20 feet. Two feet of water was observed in Winthrop, Mass., just north of Boston. Waters breached a sea wall in the Humarock section of Scituate, while roads in Gloucester, Marblehead and Revere were reported flooded or impassable.

At a news conference, Gov. Andrew M. Cuomo said New York would send crews to Connecticut and Massachusetts to help remove snow and restore power.

Reporting was contributed by Jess Bidgood, Robert Davey, Ann Farmer, Dina Kraft, Elizabeth Maker, Eli Rosenberg, Nate Schweber, Michael Schwirtz, Katharine Q. Seelye, Ravi Somaiya, Alex Vadukul and Vivian Yee.

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Boeing 787 Completes Test Flight

A Boeing 787 test plane flew for more than two hours on Saturday to gather information about the problems with the batteries that led to a worldwide grounding of the new jets more than three weeks ago.

The flight was the first since the Federal Aviation Administration gave Boeing permission on Thursday to conduct in-flight tests. Federal investigators and the company are trying to determine what caused one of the new lithium-ion batteries to catch fire and how to fix the problems.

The plane took off from Boeing Field in Seattle heading mostly east and then looped around to the south before flying back past the airport to the west. It covered about 900 miles and landed at 2:51 p.m. Pacific time.

Marc R. Birtel, a Boeing spokesman, said the flight was conducted to monitor the performance of the plane’s batteries. He said the crew, which included 13 pilots and test personnel, said the flight was uneventful.

He said special equipment let the crew check status messages involving the batteries and their chargers, as well as data about battery temperature and voltage.

FlightAware, an aviation data provider, said the jet reached 36,000 feet. Its speed ranged from 435 to 626 miles per hour.

All 50 of the 787s delivered so far were grounded after a battery on one of the jets caught fire at a Boston airport on Jan. 7 and another made an emergency landing in Japan with smoke coming from the battery.

The new 787s are the most technically advanced commercial airplanes, and Boeing has a lot riding on their success. Half of the planes’ structural parts are made of lightweight carbon composites to save fuel.

Boeing also decided to switch from conventional nickel cadmium batteries to the lighter lithium-ion ones. But they are more volatile, and federal investigators said Thursday that Boeing had underestimated the risks.

The F.A.A. has set strict operating conditions on the test flights. The flights are expected to resume early this week, Mr. Birtel said.

Battery experts have said it could take weeks for Boeing to fix the problems.

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