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* * * * * * FRIDAY, DECEMBER 19, 2014 ~ VOL. CCLXIV NO. 145 WSJ.com HHHH $3 .00

DJIA 17778.15 À 421.28 2.4% NASDAQ 4748.40 À 2.2% NIKKEI 17210.05 À 2.3% STOXX600 339.05 À 2.95% 10-YR. TREAS. g 17/32 , yield 2.204% OIL $54.11 g $2.36 GOLD $1,194.70 À $0.40 EURO $1.2286 YEN 118.84

TODAY IN MANSION

The Ultimate HeirloomARENA Forget the Sweater: How to Give Art as a Gift

CONTENTSArt.............................. D2,4,7Corporate News B2-4,7Global Finance............ C3Heard on the Street C8In the Markets........... C4Movies........................ D3-5

Music................................ D5Opinion.................. A13-15Sports.............................. D9Theater........................... D8U.S. News................. A2-8Weather Watch........ B7World News.......... A9-11

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What’sNews

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World-Widen The U.S. is seeking waysto retaliate for North Korea’sapparent hacking of SonyPictures but is struggling foran appropriate solution. A1n U.S. airstrikes have killedthree military leaders of Is-lamic State in Iraq in recentweeks, the Pentagon’s topuniformed officer said. A9nA Pakistani court grantedbail to the alleged mastermindof the 2008 attack on Mumbaithat left 166 people dead. A9nBoko Haram kidnappedabout 200 people and killeddozensmore in a Nigerian vil-lage opposed to the group. A9n Putin accused the West ofseeking to subdue Russia andblamed “external factors” forthe nation’smarket turmoil.A10n The Secret Service needsmore training and staff and anew leader from outside theagency, a report said. A6n A Pentagon unit spied onU.S. executives and businessesin South Asia, a Defense De-partment probe said. A8n A spy released to the U.S.by Cuba was a key figure inhelping crack some promi-nent espionage cases. A11n The White House is callingon federal agencies to con-sider the climate-change im-pact of energy projects. A4n An appeals court deemedunconstitutional a law thatkept a man who had beenbriefly committed to a mentalhospital from owning a gun. A2nThe Obama administrationon Friday will spell out an am-bitious college-rating system.A2

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The slide in oil prices hascaused sharp losses for

some big investors. Icahn’sstake in Talisman has tumbled$230 million since August. A1Oil dropped 4.2% in NewYork to settle at $54.11 a bar-rel, a new five-year low. C4n The Dow posted its biggesttwo-day percent gain in overthree years, buoyed by the Fed.The industrials soared 421.28Thursday to end at 17778.15. C1nAmerican Realty’s Schorschordered employees to manipu-late financial results, accordingto a suit against the former CEOby an ex-accounting officer. C1nMovie studios sought to dis-tance themselves from filmsinvolving North Korea in thewake of Sony Pictures’ decisionto pull “The Interview.” B1, B2nThe Swiss central bank saidit would charge banks for over-night deposits in a bid to coolthe franc and boost exports. C1nNigeria’s central bank im-posed foreign-exchange con-trols to bolster its currencyamid the oil-price slump. C1nMetLife is weighing a suitafter U.S. regulators labeled it“systemically important.” C3nThe Fed gave banks twomore years to sell stakes infunds under the Volcker rule.C2n Kraft Foods said ChairmanCahill will replace CEO Ver-non, in a surprise move. B3n Amazon and Macmillanstruck a new deal coveringprint and digital books. B6n France fined a dozen com-panies a total of about $1.23billion for price-fixing. B2

Business&Finance

The recent slide in oil priceshas caused sharp losses amongsome of Wall Street’s biggestnames, the latest in a series ofbad bets made by star investorsduring 2014.

Carl Icahn, the billionaire ac-tivist investor, has seen hisfirm’s holdings of Canadian oil-and-gas company Talisman En-ergy Inc. tumble $230 millionsince late August, based on ananalysis of his holdings, a rarestumble for the prominent inves-tor. Icahn Associates Corp. wasthe largest holder of Talisman,with more than 7% of the com-pany’s shares.

The Icahn losses were morethan $540 million as recently asDec. 11 before Talisman agreed tobe purchased, boosting the stock.At the deal price, he would loseabout $290 million on his origi-nal investment, according to theanalysis. His company’s total in-vestment portfolio was up 4.4%through the first nine months ofthe year, according to regulatoryfilings.

“In this oil environment, I’mcertainly glad a bidder camealong for it,” Mr. Icahn said. “Ibelieve oil is going to go lower,but I think over the long term itpresents great opportunities.”

The $19 billion firm run bybillionaire John Paulson had oneof its largest losses of the yearon a gamble that big oil firmswould gobble up smaller ones,according to investors and peo-ple briefed on the trade. In-stead, some smaller energystocks held by Paulson & Co.plunged in value amid weakcrude prices. Mr. Paulson’sstrategy could yet pay off; manyanalysts expect consolidation in

PleaseturntopageA8

By Juliet Chung,Gregory Zuckermanand David Benoit

Oil’s DropPummelsBig-NameInvestors

The U.S. government is look-ing for ways to retaliate forNorth Korea’s apparent hackingof Sony Pictures but is strug-gling for an appropriate solu-tion, according to people famil-iar with the discussions.

U.S. officials have evidencethat could point to North Koreaas directing the attack, butWhite House spokesman JoshEarnest said the government

was still investigating who wasresponsible and wasn’t preparedto point the finger at any coun-try. North Korea’s governmenthas denied responsibility.

“There are a range of optionsthat are under consideration

right now” and the U.S. is look-ing for a “proportional’’ re-sponse, Mr. Earnest said.

Senior advisers from Presi-dent Barack Obama’s intelli-gence, military and diplomaticteams were having daily meet-ings about the situation, theWhite House said.

In one new detail, investiga-tors have uncovered an instancewhere the malicious software on

Sony’s system tried to contactan Internet address within NorthKorea, two people familiar withthe investigation said. In allother instances, the malwarewould contact hop points inseemingly random countries,these people said. Investigatorsstill aren’t sure whether thebrief episode was a mistake orintentional, but U.S. officials seeit as potential evidence.

Amid threats of violence andan unprecedented corporate hack-ing, Sony Pictures, a unit of SonyCorp., said Wednesday it wouldcancel the release of the film “TheInterview,” which depicts a fic-tional assassination plot of North

PleaseturntopageA10

By Danny Yadron,Devlin Barrett

and Julian E. Barnes

U.S. Struggles for Response to HackWhite HouseWalks Fine Line to FindWay to Retaliate for North Korea’s Apparent Cyberattack on Sony

Fed, Crude, Russia Send Dow on Wild December RideThe Dow industrials rallied to their biggest two-day point gain since November 2008 after the Federal Reserve thisweek signaled it would take its time in raising interest rates. Stocks snapped back from a selloff earlier in the monththat was driven by plunging oil prices and turmoil in Russian markets. C1

2Dec. 1 3 4 5 8 9 10 11 12 15 16 17 18

Sources: WSJ Market Data Group; SIX Financial Information; photos (left to right): Associated Press, Bloomberg News, Zuma Press The Wall Street Journal

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Warren’s RiseExposes SplitDemocratsAre Facing

Assistant U.S. Attorney Richard Elias wasleafing through a pile of J.P. Morgan Chase &Co. documents while tending to his newbornson in 2012 when he found something thatcame back to haunt the three largest U.S.banks.

In a memo, one J.P. Morgan employeewarned her bosses they were putting badloans into securities being created before thefinancial crisis hit.

The U.S. attorney’s office in Sacramento,Calif., soon started sending subpoenas to J.P.Morgan officials tied to the memo. Threemonths later, top Justice Department officialsin Washington told investigative teams acrossthe country to hunt for similar ammunition in

FINE MESS

The Memo That Cost Banks $37 Billion

Democrats looking for a wayforward after their electionlosses this year have wound upin a debate over how best toframe the party’s economic mes-sage, with the most liberal mem-bers rallying behind Sen. Eliza-beth Warren (D., Mass.) and hercalls for a focus on income in-equality.

Ms. Warren had gained newprominence on the nationalstage—and drawn increasing callsfor her to run for the WhiteHouse—with her attempt last weekto scuttle a compromise budget billbecause of concessions to WallStreet, as well as her opposition toPresident Barack Obama’s choicefor a top Treasury post due to hisWall Street ties. Thosemoves havereinforced Ms. Warren’s long-

PleaseturntopageA4

BY PETER NICHOLAS

JINAN, China—Ning Wentaosat stoically with four electrodestaped to his stomach as a nursegradually raised the flow of cur-rent to his abdomen.

Not an experi-ment or a treat-ment, the electricshock biting intoMr. Ning wasmeant to simulatethe sensation ofchildbirth. A 28-year-old expectingfather, Mr. Ningsays he agreed totry it out of soli-darity with hiswife, who is due onChristmas.

Having men experience con-traction pains is proving popularin this eastern Chinese city, espe-cially with their spouses. Eversince the Jinan Aima Maternity

Hospital opened its “Pain Experi-ence Camp” in November, morethan 300 men signed up as testsubjects, said Liu Yang, JinanAima’s marketing director.

Interest has been such that inaddition to free sessions twice

weekly at the hos-pital, Aima hasopened a pop-upbooth in the localShi Mao shoppingmall, where West-ern retailers likeGap sell theirclothes to China’semerging middleclass. That is whereMr. Ning sat as thecurrent intensifiedover a few minutesfrom a tingling

level one to a gouging 10.As the electricity reached its

peak, Mr. Ning shook his fistproudly in the air, pursed his lips

PleaseturntopageA12

BY LAURIE BURKITT

In China, Expectant Dads Line UpTo Experience Labor Pains

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Maternity Hospital Uses ElectrodesTo Simulate Contractions; Too Proud to Howl

Ning Wentao

tens of millions of documents from otherbanks, especially Bank of America Corp. andCitigroup Inc.

In a move meant to shake money from thebanks, the Justice Department decided to goafter them with an unusually potent law cre-ated to clean up the savings-and-loan crisis ofthe 1980s. The law has a lower burden ofproof than other laws used by the agency topunish alleged fraud, a much longer statute oflimitations and potentially astronomical fi-nancial penalties.

Mr. Elias’s discovery has delivered a whop-ping payoff so far: $36.65 billion, represent-ing the cost of the government’s three sepa-rate settlements with the banks since late2013, including the $16.65 billion deal withBank of America in August that is the largestever between the U.S. and a single company.

The total is by far the biggest single chunkof an estimated $128 billion in crisis- andmortgage-related settlements, fines and othercosts incurred by the six largest U.S. bankholding companies, according to SNL Finan-cial. Ongoing investigations could push thetally higher.

“Given the magnitude of the conduct, I be-PleaseturntopageA12

By Andrew Grossman, Emily Glazerand Christina Rexrode

Fears hit other film projects... B1 Joe Morgenstern on the movie

you can’t see................................... D3

Obama plows ahead................... A6

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