five. good morning to our viewers in the west. it's wednesday, may 23rd, 2012. welcome to studio 57 at the cbs broadcast center. facebook, nasdaq and now morgan stanley under pressure under the falling price of facebook stock. what went wrong with the high profile public offering? i'm erica hill. the director of the secret service speaks out for the first time today about the agency's sex scandal and should you be responsible for sending texts to someone while they're driving? >> i'm gayle king. when i see you at 8:00, john miller goes inside a government sting of spies here in the u.s. and greg alman stops by studio

57. >> as wez do every day, we loo at today's eye opener, your world in 90 seconds. >> there's no debating this is a ms. adventure of epic proportion. >> regulators look at facebook. >> a huge investment company subpoenaed. did it give clients inside information before facebook went public? >> facebook stock sliding another 9%. it's down $40 billion. >> the hype around the facebook ipo is a lot like the average facebook profile picture. way sexier than the real thing. >> a new twist in the colombian hooker scandal which has rocked the u.s. secret service. >> the agency claims they are being made scapegoats for behavior that's long been tolerated. >> the director mark sullivan will be testifying before the senate homeland security committee. >> the obama campaign released an ad calling the president number one in job creation in

colombia. >> turnout expected to be high as egyptians vote in their first ever free presidential elections. >> homeowner's front lawn becomes a wrestling rink. >> that's heir to the british throne getting a disk jockey lesson. >> all of that -- >> just his stick. i say that's why his [ bleep ] got stuck. >> i think you're dreadful. i honestly don't want to talk to you anymore. >> and all that matters. >> a couple in kansas celebrated their wedding day with a tornado in the backdrop. >> on "cbs this morning." >> d.c. comics announcing plans to out one of its major >> it explains the new bat signal. coming, honey. i wish.

welcome to "cbs this morning." the bank behind facebook's stock offering is denying allegations that it broke the law. regulators are looking at whether morgan stanley shared key information with some clients before facebook went public. >> the social networking site has been on the market just three days. it has already lost $7 a share. rebecca jarvis is with us with more. good morning. >> good morning to you. since facebook debuted as a public company on friday, it's been a case of murphy's law. whatever can go wrong, has. and from training glitches to allegations of misconduct, shareholders have lost billions in value in less than a week. >> let's do this. >> reporter: as facebook continued its nosedive on wall street on tuesday, allegations emerged that some of the very banks selling the ipo privately told certain clients the social network wouldn't grow as quickly as forecast. the securities and exchange commission and wall street

watchdog finra are investigating the matter while investigators have subpoenaed morgan stanley. >> there are issues that we need to look at with respect to facebook. >> reporter: sources close to the situation allege analysts at morgan stanley, jpmorgan and goldman sachs, the lead banks on the deal, cut facebook's revenue forecast just days before it went public. but only shared the information with a select few. at the same time, morgan stanley increased facebook's offering price and the size of the deal signaling greater demand at a higher price than actually existed among institutional investors. >> it's not what you're allowed to do, not what you're encouraged to do and not what a successful ipo includes. >> reporter: in a statement morgan stanley says procedures were "in compliance with all applicable regulations."

tuesday's facebook shock price tumbled again down 18% in just three days of trading. adding to the company's tarnished image, at least two unhappy investors filed lawsuits related to the questionable deal. >> because it's an epic deal, the eyes of the world are on it. a chance to restore the public's faith in wall street and i think it fell well short of that mark. >> that's the concern with investor confidence weak as a result of the financial crisis, they fear that this will turn retail investors off of stocks entirely. erica and charlie? >> rebecca, thank you. on tuesday regulators who oversee america's largest banks testified to a senate committee about jpmorgan chase's $3 billion trading loss. >> they also explained why they are having trouble keeping wall street in check. nancy, good morning. >> reporter: good morning to you. the head of the securities and

exchange commission told congress that jpmorgan chase what investigators want to know about the company is whether it was honest with investors and regulators as the sophisticated bet was falling apart. jpmorgan chase has deep ties on capitol hill spending $7 million last year alone to lobby congress. financial regulators are examining what jpmorgan chase executives said and did in the month before their $3 billion loss was made public. >> what did they know and when did they know it? >> reporter: senator richard shelby is the top republican member. >> did they see this trade going sour back in april? and if so, did they notify their regulators? did they have a duty to do other things? we don't know yet. >> reporter: regulators acknowledge they don't have resources or technology to keep tabs on wall street the way congress called for in financial

reform legislation crafted in the wake of the recession. >> if you're a football fan imagine if there were eight times the number of teams but no more referees and then instead of seven refs on the field, you had one on the field. what would happen? there would be mayhem on the field. >> reporter: jamie dimon agreed to testify before the banking committee next month. it's a group he knows well because his banks gives more money to the committee's members than all but one other donor. in the last six years, jpmorgan and its employees have contributed to 17 of the 22 members on the committee for a total of nearly half a million dollars and the banking committee's democratic staff director is a former jpmorgan chase lobbyist. >> the revolving door spins fast when it comes to wall street firms. >> reporter: senator shelby received $73 million from jpmorgan chase in the past five years. it's his second biggest donor. does it affect you when you are looking into jpmorgan? >> absolutely not.

i'm going to do my duty whoever comes before the banking committee and i believe my duty is to represent the taxpayers, the american people, those people who sent me to washington. >> reporter: ceo jamie dimon says he wasn't fully aware of the scope of the losses from this one bet until about two weeks ago, charlie and erica, and he says that as soon as he found out, he went public with the information. >> nancy cordes, thank you very much. with us now, henney blodget. pleased to have you here. welcome. >> thank you. >> tell me the ramifications for facebook, underwriters and also for people who own shares in facebook now. >> i think you laid out exactly what happened here, which is that the underwriter analysts produce estimates that i don't think most investors were aware of and then in the middle of the road show, which nobody i talked to has ever seen before, i certainly haven't, those estimates were suddenly cut

because facebook said, look, our quarter is weak. you have to take the numbers down. to any investor, that's material information. >> the fact that it was only given to a small number of people is a problem. is it a violation of law? >> i don't know. nobody has seen a change like ths before. i think what morgan stanley and others will say, this is the practice. what i would say and you mentioned my background unfortunately, not that you mentioned it but the unfortunate background is that a lot of things have happened on wall street that are convention and the way things have developed but if you look at from the outside, they are frankly unfair to individual investors and this practice of analysts developing estimates and sharing them only with a few investors is unfair so that rule should be changed even if it is the rule. >> is that the answer? lower regulations or better oversight? >> in this case it's just a better rule. what happened here is you have analysts working with the company to come up with forecasts and ipo is priced

based on those forecasts. that's not a bad thing to have happen. what's bad is to only distribute those estimates to a few people. if you publish the estimates and make them available to the public, then everybody can evaluate them. it's simple. >> was it sheer incompetence they valued it too high at 38,000 shares, the opening of this? >> i think what happened is -- >> i think a couple of things happened. what we just talked about may have played into this which is that institutions demand for the stock is dampened by estimate cut and other things. they were willing to pay a lower price than individuals who may not have known about these things and so there was a difference there. there was tremendous demand. i think morgan stanley thought demand would hold up. i think the other thing that happened is a lot of people that bought the stock, bought it expecting to get a huge first day pop which we see on ipos and were disappointed they didn't get that and then immediately sold and that brought it down to the level where big investors are comfortable buying it. >> switch to the story of bank

regulations and at the same time lob lobbying. how do we weigh the impact banks have on regulation being created to restrain their activities? >> i think there has to be input from all street on regulation. there are a lot of things that happen that are complex and obviously you have to have wall street involved but the revolving door is a main problem and congress just has to get together and do the right thing and to me the right thing is not to police every trade that these banks make and try to regulate everything but just let them gamble if they want to gamble but make it possible for them to fail without taking the economy down and without taxpayers paying the price and that's actually not that hard to do. you just have to be willing to set it up in advance. >> thank you. >> thank you for having me. >> director of the secret today that the colombian gress - prostitution scandal did not endanger the president and was an isolated incident.

>> however, a group of agents let go because of the scandal say their alleged misconduct is nothing new. bill plante is at the white house. >> reporter: good morning and good morning in the west. the administration and particularly the secret service were hoping that when director mike sullivan testified today, that would put the whole scandal to rest but some of the agents involved aren't ready to end it. they think they have been railroaded. four secret service employees apl accused of having sex with prostitutes in cartagena, colombia, are fighting their dismissals s saying they were me scapegoats for behavior that has happened many times in the past. last month former secret service director brian stafford told cbs news the cartagena incident painted a much different

picture. >> i never heard there were agent and prostitute mentioned in the same sentence until this saga unfolded. >> reporter: in april secretary of homeland security janet napolitano said the conduct was not acceptable. >> not everyone else was doing it and this behavior is not part of the secret service way of doing business. >> reporter: the four agents who either resigned or were fired are now trying to get their jobs back. some of them are arguing that they did not pay for sex. others that they did not know the women were prostitutes. members of congress have said the cartagena incident calls into question the ability of the secret service to carry out its primary mission. >> this is a national security of the united states protected and is the president's life properly protected? >> reporter: secret service director mark sullivan gives his first public accounting of the

scandal today in testimony to congress. he'll attempt to reassure critics that no intelligence was compromised. he says in his statement "at the time the misconduct occurred, none of the individuals involved had received any specific protected information, sensitive security documents, firearms, radios, or other security related equipment in their hotel rooms." charlie, erica? >> bill, thank you very much. this morning the turnout is overwhelming in egypt's first free presidential election. it happens more than a year after protesters force e e ed m out of office. tell us what you're seeing and what the mood is in egypt today. >> reporter: real excitement. we've been talking to people in the lineup and they say that we've been ruled by kings and dictatorships but we've never had our own democratically elected president.

54 million egyptians are eligible to vote today and 13,000 polling stations across the country and election officials have gone to some trouble to set up quite elaborate checks and balances so people will believe in the results and there won't be allegations of fraud. there are american monitors here and teams from the carter center but people by in large really do seem to have faith in the system. they are voting for four leading candidates but two associated with hosni mubarak's regime and two of them islamic. >> thank you very much. we'll have more on this important election in egypt tonight on the "cbs evening news." in the u.s. presidential race, romney is closer to cinching the republican nomination. president obama's campaign is now swinging harder than ever at romney's business experience.

jan, good morning. >> reporter: good morning. this is what's going on. voters tell us the economy is the thing they worry about most. you have high unemployment. tens of millions of people looking for work and romney saying he can fix that. what we're seeing is the obama campaign doing everything it can to undermine his argument that he can turn things around. >> folks, making money for your investors, which romney did very well, is not the president's job. >> reporter: on the campaign trail in new hampshire, vice president joe biden dismissed or outright mocked mitt romney's business experience. >> that no more qualifies you to be president than being a plumber. it doesn't -- by the way, there are a lot of awful smart plumbers. >> reporter: romney pointed to his time at bain capital which he founded and ran for more than a decade to show he understands business and how to turn around the economy. the obama campaign has been fighting to knock down that argument and supporters are ratcheting up their rhetoric.

like this on tuesday from democratic congressman james clyburn. >> there's something about raping companies and leaving them in debt. >> reporter: clyburn's use of the word rape to discuss romney's business experience was condemned by the obama campaign but continues to question romney's readiness to be president which is a line of attack president obama saw in the 2008 election. >> thank you everybody. >> reporter: then first term senator obama came underfire for his experience as a community organizer, a law professor and former illinois state senator. even the president's democratic opponent, hillary clinton, used the attack against him. >> senator mccain will bring a lifetime of experience to the campaign. i will bring a lifetime of experience and senator obama will bring a speech that he gave in 2002. >> reporter: now the romney campaign is out with a new web ad this morning saying this is a distraction and the election isn't about bain capital but president obama's failed

economic policies. the campaign will be highlighting romney's time as massachusetts governor and work turning around salt lake city olympics but president's supporters are doubling down on this and an outside group will spend $3 million on anti-bain capital ads. >> jan crawford in washington, thank you. the jury in the john edwards trial deliberates for a fourth day today. edwards faces up to 30 years in prison if a jury convicts him on all six counts of campaign finance corruption. an an anna werner is at the courthouse. >> reporter: some people were not expecting this would take this long. the jury deliberates between five and six hours every day. this is their fourth day. so far they've asked for three rounds of exhibits. all of them relate to donations coming from rachel bunny mellon.

some trying to figure out what her intent was in giving the money. was the money for political purposes to help make john edwards president or was it for personal reasons. her lawyer testified that she adored john edwards and would have given her money in any

>> announcer: this national weather report sponsored by beauty rest. living life fully charged. >> in most states you're not allowed to text and drive but what if you send messages to someone else who is driving? are you liable? if there's an accident? we'll have these stories behind an unusual lawsuit. and there's outrage over a vial of blood said to be president reagan's now for sale

online. >> it's just basic human dignity and this strikes me as being something tacky. it's taking the presidential memorabilia notion to a very bizarre new level. you're watching "cbs this morning." >> announcer: this portion of "cbs this morning" sponsored by "snow white and the huntsman" in theaters june 1st.

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[ male announcer ] ask your veterinarian we used to think of spies as mysterious men in trench coats, passing secrets in a dark alley, but there was nothing covert about this navy officer caught

on tape trying to sell secrets to the chinese. >> and >> good morning. let's get you caught up with some headlines. president barack obama has three fund-raisers in the bay area this evening and tomorrow morning. he is scheduled to arrive at moffett field around 6:00 tonight. san jose voters will decide in november whether to raise the minimum wage from $8-$10. the city council was unanimous in sending that issue to the ballot. hewlett-packard is expected to announce more layoffs this afternoon, perhaps as many as 35,000 workers worldwide, it ,,,,,,,,

>> it will be very slow right now on northbound 880 by the coliseum, there has been an accident reported just passed the high street exit. southbound 880 looks like it's getting by just by and towards 92. a quick look at the silicon valley commute, brake lights on 237. >> the wind is starting to kick up in spots already. a couple of patches of fog we agree outside. the wind will be picking up throughout the day today, especially along the coastline. fifties' right now across the board. this afternoon you will see '70s and even some low 80s possible. ,,,,,,,,

a -- someplace and there's a guy and you beat up a guy that was trying to hug you or -- >> i didn't beat up a guy. we were doing an interview, right? he says, man, you know, like -- he's a reporter. he says, i'm your biggest fan. can i have a hug? so i go to give this joker a hug and he, like, tries to lean in to like kiss me. they were saying, oh, no, we're sorry, you know, it's just his schtick, you know. and i said, well, that's why his ass got schtuck, you know. welcome back to "cbs this morning." >> if you're texting and driving and you have an accident, it's your fault. what about the person texts with

you? as mark strassmann reports, that's the heart of a lawsuit in new jersey. >> this involves an accident as horrific as needless. the cause was a driver who admitted in court he was looking down to read a text but this lawsuit says he's not the only one at fault. >> reporter: david and linda's lives were shattered in seconds, about the time it takes to send a text message. >> this is a senseless crash that didn't have to happen. >> reporter: accident photos tell the story. on september 21, 2009 they were riding their motorcycle about a mile from their new jersey home the chevy chuck swefbed across the center line and hit them head-on and they saw it coming. >> what i saw was the gentleman in the truck steering with his elbows, with his head down. i could tell he was text messaging. i looked down after the impact and my leg was torn off. and i asked my wife if she was okay. and she told me the bones in her legs were going through her

pants. >> reporter: both lost a leg in the crash. kyle best, then 18, pleaded guilty to three motor vehicle violations, including using a hand-held device while driving. they are now suing him as a distracted driver for civil damages and in a novel twist, are also suing shannon, his girlfriend, for sending him text messages while he was driving and distracting him. phone records show they exchanged 62 texts that day. and skippy, says she was electronically present in the crash. she may have known he was driving as they exchanged text messages leading up to the crash. >> what i find interesting is that her testimony is she answered by saying, this is what teenagers do. >> yeah, i believe if she knew he was driving and answering her back with texts, that, yeah, she's partially responsible, too. >> reporter: lawsuits in distracted driving cases

increasingly involve third-parties. >> we know it takes two people to text. >> reporter: todd clemens, a dallas trial lawyer, he arg gus the text sender could be held liable. >> it seems to make sense both people involved in the activity could very well be liable, including the sender that's not actually behind the wheel. if this case goes forward, i think what you'll see is a new awareness throughout the country, a new responsibility on the part of both the sender as well as the receiver of a text message not to continue this negligent activity. >> reporter: lawyers did not return our e-mails, but they say the lawsuit against shannon is a leap of logic and should be dismised. the couple says both text senders and receivers need to be held accountable. >> if we can get this out to the public and hopefully we are, maybe somebody won't end up like us. >> or worse. >> or worse.

>> 38 states have banned texting behind the wheel. government statistics say 24% of can be attributed to phone use while driving. on friday a new jersey judge will decide whether there's a case against the sender of a text message. >> also with us, criminal defense attorney and legal analyst, rikki. >> thank you. >> does this have a chance? >> we do have sanctions against people who have texts while driving. we don't yet have any sanctions for those who send a text. and judges shouldn't be in the business of law-making. legislators should be in the business of law making. >> mark in your research you found some very interesting other cases with somewhat similar -- >> there's nothing that's identical to this. >> yeah, no precedence. >> no precedent whatsoever. there are cases, of course, where now you have companies who have to pay multimillion dollar

payments when their employees get behind the wheel and start to text. that's not the same thing. because this is a case where are basically trying to find someone who wasn't in the car ride and hold them partially responsible for it. the argument that the couple's lawyer makes is the equivalent as if the girlfriend had put her hands over his eyes while he was driving. if that had been the case, would she have been responsible? if that would have been the case, she would have been in the car. >> that's right. you can't extend this kind of liabili liability. that would stop texting all together. do we want to know if someone walking down the street and they're going to walk into traffic, is that person responsible? where does it end? so if a legislator says, look, we need to pass a new law, we're going to call it erica's law, we'll let them go ahead, but not a judge. >> what if they knew the person sending the text knew the other person was driving a car at that moment? >> doesn't matter to me, charlie. it doesn't.

i think that that's what the plaintiffs are trying to show. they're saying, of course she knew he was driving. for heaven's sake, she exchanged these text messages all day long. she knew where he went and when he went there. that's not the test. she's not aiding and abetting him from far, far away. it's the driver's responsibility not to look at that text or not to answer it. >> because she said, and she has said, i may have known he was driving. >> and she probably did know. >> this comes down, in your mind, to personal responsibility. just because a person sends a text, you don't are to drive it. >> that's right. it may not be a bad idea to legislate we shouldn't have someone texting when they know someone else is driving but you can't have one judge who suddenly find a duty, suddenly find negligence, suddenly finds cause when there has never been a case like this before. >> what if there was a smoking gun text where the driver said, i'm driving home now. >> right. >> and the sender continued to

send? >> the sender continues to send and he says, i'm driving home now, then it's his responsibility to say, i've sent that message and i'm not going to read the messages anymore. >> is there any responsibility to the sender? >> no. might it be a lovely idea? yes. but not now under the law. >> i think you covered it. >> i think i should be arguing this case in court. >> you want to see the legislators take care of this. >> and they may. >> even if there was intent, even if in fact the driver says, i'm in the car driving, i need you to text me, even then does not move the responsibility or share responsibility on the part of both people? >> no. and it's really my greatest worry, charlie, that when we keep extending and extending and extending, it is where does it end? unless we would like to outlaw texting in the entire world because we don't know where people are, i mean, if i'm walking through times square and i'm in the middle the traffic

and i say to my husband, i'm nwt texting times square, don't text me and he text ms. me and i look, and all sorts of cars collide, i don't want my husband to be responsible. >> especially your husband. >> that's it, my husband. very good point. >> nice to have you both here. thank you. online auction is getting a lot of interest, both pro and con. up for sale, a vial which is said to contain traces of president ronald reagan's blood. you can imagine there is plenty of backlash here and we'll take a look at that. you're watching "cbs this morning." it's time to live wider awake. only the beautyrest recharge sleep system combines the comfort of aircool memory foam layered on top of beautyrest pocketed coils to promote proper sleeping posture all night long.

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nancy reagan, who is now 90 years old, is recovering this morning from broken ribs. her spokeswoman said mrs. reagan fell at her los angeles home about six weeks ago. hopefully a speed y easy recover. welcome back to "cbs this morning." a disturbing item from a

dark day in mrs. reagan's life is now up for sale. >> his son calls this sale outrageous as bob orr reports, plenty of other people agree with him. >> reporter: in the hours after president reagan was shot in 1981, doctors sent vials of his blood to a maryland lab for testing. now one of the procesamples hasn up for sale online. an auction house is offering a small glass vial that they say contains traces of the president's blood. it contains his name, the last name of his doctor, with the designation thor, meaning mr. reagan was a thoracic patient with a chest wound, and stamped march 30, 1981, the date of the assassination attempt. reagan foundation says mr. reagan's blood should not be traded or sold like a baseball card. >> this is the tissue of the president of the united states.

this is something that doesn't belong out in the public. it belongs with the family. it belongs with the estate. >> reporter: the anonymous seller says the vial of blood has been in his family for 31 years, ever since his mother brought it home from the blood lab where she worked at the time. the auction house has offered no proof the sample is actually legitimate but historian douglas brinkley says there are bigger concerns. >> it's just basic human dignity. this strikes me as being something tacky. it's taking the presidential memorabilia notion to a very bizarre new level. >> reporter: it's worth noting very personal presidential memorabilia has been collected and sold before. facial hairs were plucked from abraham lincoln after his death and then worn in his honor. and looks of john f. kennedy's hair sold for $3,000 in 2010. some historians argue this auction crosses the line, but the bidding goes on. the sale closes thursday. for "cbs this morning," bob orr

in washington. >> it's just strange. i mean, there's no -- there's no way around it. it's an odd thing to see. >> but somehow, when you hear those things, it never s the fbi starts a publicity

campaign to keep secrets safe from hackers who steal them and workers who sell them. john miller takes a look at efforts to fight spies, including these guys who were caught on camera. you're watching "cbs this morning." there he is getting ready with the coffee in the green room. fired up, miller. twinkle twinkle hope appears.

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an outdoor wedding over the weekend. a couple of uninvited guests. you see the tornado in the video, in the background. it happened in kansas, so no one really blinked an eye. the newlywed got these cool photos out of it with the twisters in the background. quite a moment. welcome back to "cbs this morning." >> gayle, tell us what's coming up in the next hour. >> i will do that. he epitomizes what it means to be rock star, sex, drugs and rock 'n' roll and he's lived to talk about it. gregg allman will be here to talk about everything from his music career to problems with substance abuse. you know he went to rehab 11 times. and his marriage to pop icon cher. restaurants live and die by reviews and in today's new york

times, la bernidan got five stars. eric la pair will take his victory lap in studio 57. have you tried to scare yourself, hold your breath or breathe into the brown paper bag? chances are you've tried at least one of these methods to cure a case of the hiccups. we'll meet a 13-year-old girl from connecticut who says i know what works. she may have found the real solution. and "maxum" new list is out. some on the list think, not so hot? is it not so hot or inappropriate? we'll make that "long story short" when we see you at :00. catch us on facebook, twitter and google plus. >> announcer: this portion of "cbs this morning" sponsored by prudential. every challenge is an opportunity. prudential, bring your challenges. across the united states. ce units the only time i've ever had a break is when

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>> time for the news headlines from cbs five. this could be a rough afternoon in palo alto as hewlett-packard is expected to announce another big round of job cuts. various reports a 25-30,000 jobs will be affected. meg whitman is trying to reorganize the silicon valley giant that has been hurt by slowing sales. president obama is coming to silicon valley this evening. he is scheduled to arrive at moffett field about,,,,,,,,

>> back out to oakland,

northbound 880 and high street still blocked because of a fender bender. right time is now nearly a half-hour. double what it typically is between 238 and the maze. the silicon valley commute is very back up this morning on westbound 237. let's get a quick look at the bay bridge, backed up to the maze >> the sun is up in a good part of the bay area but we still have some patches of fog outside. the wind will be whipping, already seeing some gusty wind at sfo, 28 mi. per hour. '70s and maybe low 80s well inland today. windy conditions at the coastline. the next couple of,,,,,,,, .

more bad news, more roof times. a&e is canceling dog the bounty hunter after eight seasons. of course they told fans of dog they were taken to a farm in the country where he could run forever. >> that's always good to see jimmy fallon. welcome back to "cbs this morning" i'm gayle king. >> i'm charlie rose with erica hill. the fbi is bringing back memories of the world war ii ads that said loose lips sink ships. officials say they're responding to two threats sophisticated computer hacking skills of outside intelligence agencies and the possibility of a trusted insider giving away secrets. >> senior correspondent john miller is former fbi deputy director here with a rare look

into dark world. good morning. >> good morning. this is a multi city media campaign targeting areas where the government intelligence agencies or private contractors who work on classified military projects are located. the idea is to let the employees or public know about the dangers of cyber espionage. >> have a seat. >> what you are seeing is very rare. actual video of a spy caught in his own web. the u.s. intelligence officer was still wearing his navy uniform when he showed up in the hotel room intending to sell secrets to a chinese agent. >> i know exactly what i'm getting into. i know the penalties. >> 22-year-old bryan martin is trying to sell classified information about u.s. military operations. >> i have a fairly good idea of >> i have a fairly good idea >> please explain. >> imagery, reports, things.

>> the man martin believes is a chinese intelligence officer is an undercover fbi agent, but listen as martin explains why the secrets are worth paying for. martin explains why the secrets are worth paying for. paying for. >> for st >> for instance the one not only highlights the threats that we perceive it identifies weaknesses and how we are not sure, not cape ble or not prepared. >> knows he's dealing with a foreign intelligence service and for him it was all about money. >> i enjoy compensation. >> for martin, the payoff was 34 years in federal prison. >> don't move. >> reporter: fbi assistant director frank figliuzzi is in charge of counterintelligence, the bureau's top spy catcher. >> we used to be concerned about people carrying brief cases out of their job place full of documents. today, we're concerned about people transferring in milli

seconds terabytes of data, downloading on to a thumb drive and walking out with an entire library's worth of corporate proprietary information. >> what i've done is i've copied it on to hard disks and put it in a safety deposit box. >> reporter: take the case of stewart nozette, a nasa scientist, another fbi sting. nozette believed he was meeting with an israeli agent to sell secrets about u.s. satellites. >> i gave you even in this first run some of the most classified information there is. >> reporter: and dr. nozette was clear and unbothered about his motive, it was for the money. >> i've made a career choice. >> countries know that it's always easier to steal our research and technology than it is to develop it themselves. in some cases even our alleys will spy on us if it's in their economic interest. >> what's the biggest growth area in the business? >> oh bar none, it's cyber.

>> reporter: it's not just countries. it's also companies. general michael hayden is the former director of the cia and the national security agency. at chertoff group in washington, he works with u.s. companies targeted by countries like ch a china. >> what type of country is the most vulnerable to economic espionage. >> it would be a company that's actually got a secret, that actually has something that gives them undeniable competitive advantage. the chinese go after those kind of secrets. it's very straightforward. >> hayden says it doesn't matter if the target is a company working on a classified military contract or a company that's developed something that will make a lot of money. foreign intelligence services will try to steal the secrets. >> there are different motivations. one the traditional espionage purpose, you know, military edge, and the other, for the nontraditional purpose which is commercial advantage. >> reporter: chemical maker

lubrizol had to pay a ransom for their own secret formulas after this employee sold them to a south korean competitor. secrets stolen by an insider. but the biggest external threat for companies comes not from the spy but from the mouse. >> fundamentally if somebody wants to get in they're getting in. all right. good. accept that. >> reporter: cyber espionage is one of the fastest growing crimes in the united states. government and corporate secrets are targeted daily from thousands of miles away, to the tune of $13 billion in trade secrets lost. >> what we tell clients is number one you're in the fight whether you thought you were or not. number two, you almost certainly are penetrated, number three, take heart. there are other lines of defense that you can and should rely on to minimize damage. >> this is a battleground for the -- in fact for war now. >> it is. i think the reason behind this ad campaign is they're really saying to people, this is in a

number of cities, centered in areas where there's government contractors working on classified things, but it's as you're on the highway they want people to see those signs, those electronic billboards that talk about the impact, how much money is being lost, and to make people think what about that person in the next kubel, why are they -- then they go into the warning signs. why are they coming in in the middle of the night to do odd shifts. why are they leaving work with, you know, a briefcase full of files. why am i watching them plug, you know, thumb drives and hard drives into computers and take things out. they really had an experience with the aldridge ames case, with the robert hansen case and the fbi and other cases where they interviewed so many people who said, i saw the indicators but i knew this person so well, i just thought i must be imagining it and i didn't call. >> that can't be. i always think, john, as a former fbi deputy director, the

fbi certainly is your home, that you know more than you can really say. tell us something we're not supposed to know. that's what i would like to know. >> i could tell you that, but then i'd have to kill you all and we have a whole show to do. >> i am fascinated, john, that people still get caught in stings, that they don't -- don't people think i could possibly be being recorded. the guy is sitting back leaning back in his chair saying i enjoy compen sigs. i would think at some point you would think a camera is recording you. i'm always amazed at how the fbi does this. >> without answering that question directly, imagine a scenario. >> yes. >> where the individual reaches out to somebody they know is a real foreign contact and that is a flyball picked up in the middle by the fbi or intelligence agency, and they insert their person in the middle. that person has a

hiccups have stumped scientists and doctors forever. we're about to meet a young girl who may have finally found a way to stop them. wouldn't that be great? you're watching "cbs this morning." be great? you're watching "cbs this morning." k9 advantix ii.

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in today's health watch curing hiccups, nearly everyone gets them and there's no fool-proof way to get rid of them. >> so we thought. terell brown has the story of a 13-year-old girl who may have a solution and it's on a stick. can't wait to hear. >> take a look at it, it's called a hiccupop and the teen

that invented them in her kitchen is pretty much confident she has stumbled on to something big. mallory hopes to get her game-changing product into every household. among the most annoying of bodily functions the hiccups can be the most frustrating to stop. though there's no shortage of those willing to share remedies. common causes of hiccups include eating too fast, drinking too much, or swallowing too much air. >> pretty much as simple as adding all these ingredients together and making them on the stove. >> reporter: while science is stumped for a cure the answer according to 13-year-old mallory could be as simple as a lollipop. >> a few summers ago i was having some problems with the hiccups myself and naturally i really wanted to stop so i researched rumored cures for hiccups. >> reporter: mallory decided to combine three of the ingredients that halted her own hiccups.

>> sugar, water and the apple cider vinegar mix. >> reporter: and came up with the hiccupop. >> how does it work? >> the ingredients in the lollipop we found overstimulate a set of nerves in your throat and mouth that are responsible for the hiccups reflex arc. >> reporter: mallory hasn't conducted any scientific study but found her confections delivered relief in about 80% of the few who tried it. >> is it supposed to smell like that? >> yep. >> that's the whole point? >> yeah. >> who are the guinea pigs then? >> usually it's friends, mainly family, younger siblings. >> is that how it comes out? >> yep. >> reporter: though mallory whips up his semisweet, semi sour solution in the kitchen. >> when you first saw that. >> yep. >> did you think was going to taste good? >> absolutely not. >> reporter: she's determined to see hiccupop in stores across the country. >> we need the market research to support the overall business. >> reporter: last week mallory

met with grad students from the university of connecticut. they'll spend the summer planning a strategy to better manufacture and market the hiccupop. >> this could be a pretty big deal. >> this could be a huge deal. >> there's a lot of potential markets we could go into with this. >> with a 100% incidence rate, all americans having hiccups over the course of a year eight to ten times a piece that's a significant market. >> reporter: curing the hiccups is not a claim mallory is ready or authorized by the fda to make. >> we can't say this cures the hiccups, we can't say that this does something for certain bodily functions. >> reporter: instead, it will be marketed as a candy. still there are doctors who have expressed high hopes for hiccupop. >> some cases where it may work very nicely. >> it's pretty good, yeah. >> i'm going to trust you here. >> all right. >> here we go. >> what she's trying to do is break that reflex arc sucking op the lollipop and stimulating it with sugar and vinegar and

breaking up the reflex arc pathway of the hiccup. >> not bad. i like it. it tastes like normal candy. >> yes. that's the good part so far. >> can i just say while she was making this thing, the way it was smelling and the way it was looking i was not trying to taste this hiccupop. >> that's why we were surprised when you tasted it and said not bad. was that a camera reaction? >> no. look. on television. everybody has one, why am i the only one sucking on the hiccupop. >> because we have questions to ask you, that's why. so, what's fascinating she talks about this deals with the hiccup arc reflex and all this. could you achieve that same thing sucking on a normal lollipop. does it have to be this blend? >> the thing is, all of the remedies mentioned at the beginning of the piece, the breathing in the paper bag, somebody scaring you, all of that stuff works for certain people. it's about what works for you.

this could be something special for particular cases, swallowing too much air, if that's one of the things you're doing this may work for you. if you have hiccups because you've eaten or drank too much this may not work. >> if a doctor says this works, it could -- >> could she make billions of dollars. >> be a gold mine. that's why businesses and consumers are interested in it right now. >> charlie, you should get in now. >> i like that it's -- >> ipo coming? >> did you notice your slug for her says ceo hiccupop. i love that. >> 13 years old. >> how come i didn't think of that? >> you go, mallory. what place is for people who can't spell -- >> or read. >> i want to do that over. roll back, please. i want to redeem myself. what place is full of people who can't spell? we'll make that long story short. you're watching "cbs this morning." thank you. >> announcer: "cbs healthwatch" "cbs healthwatch" sponsored by

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as we looked around the web as we looked around the web this morning we found a few reasons to make a long story short starting with daily news saying new yorkers can't spell because they are hooked on spell check. they are not alone. 2,000 british adults were given a spell test, one-third could not spell definitely or separate and two-thirds couldn't spell necessary. can you spell we're dumbing ourself down. >> there, their, they are. are you ready for a grown-up miley cyrus? she said sex is a beautiful thing. showing off her body. she describes it as magic when

she connects with somebody. >> i happen to think miley is right but you're not used to hearing it from miley. >> people think of her as hannah montana. >> but she's growing up. he tried to d.j., they said he did okay. charles played the bbc weatherman in scotland and wasn't half bad either. maybe being a prince isn't all it's cracked up to be. >> as harry said. hot 100 world's most beautiful women. thanks to a massive write-in, stephen colbert is 69. why shouldn't he be? he's hot. this is not sitting well with anyone. >> leaving them cold. i'm cold on that. usa says united airlines dropping early boarding for families with small kids. they now have to board at the same time as everybody else. united said they wanted to

simplify the boarding process. >> makes it more complicated fo,

>> good morning. the man arrested for the murder and kidnapping of sierra lamar has his first court date set for tomorrow. volunteers are conducting yet another search for the 15 year- old morgan hill girl. cal state university will not admit students for next spring semester because of budget cuts. the state has cut a third of its funding. 18,000 students are being turned away. president obama flying to california today. he will attend fund-raisers in african and redwood city and palo alto. it will be his first, it will be,,,,,,,,,,,, discover british columbia.

visit: >> whitson check the right out through marin county. we have an accident near of lucas valley road blocking one lane. stop and go past highway 37. it improves past 580 all the way down towards the grade. here is a live look across the golden gate bridge. we have been watching an

accident northbound 880 by high street and it is now clear to the right hand shoulder. it is still slow pass the coliseum. they just reissued another wind advisory for the san mateo bridge. >> a lot more wind especially towards the afternoon. breezy conditions around the bay area. gusts in santa rosa at 23 m.p.h.. mostly clear skies at ocean beach. temperatures running in the '50s and a few 60s at this hour but by the afternoon we will see seventies or low 80s. '60s and '70s around the bay. plenty of clouds will roll in on friday. maybe a slight chance of a couple of showers but dry for the weekend. the weekend. visit:

♪ i've got to run >> we know that. welcome back to "cbs this morning." it is really hard to exaggerate just how popular and influential the allman brothers were with rock 'n' roll artist and fans. in a moment we'll talk about that with gregg allman, here, live in studio 57. >> but first we look back at the life of this great musician who had been performing for crowds around the world since the late 1960s. ♪ lord i was born a ramblein' man ♪ ♪ trying to make a living and doing the best i can ♪ >> reporter: for more than 40 years the allman brothers band have made a living attorney southern rock songs into classic

rock anthems. from "ramblin man" to "midnight rider", their compositions combine elements of blues, country and jazz, to a sound now synonymous with their macon, georgia, roots. in 1971 they released "at fillmore east," which "rolling stone" called the best album. the album propelled the band to a level of stardom it was perhaps unprepared for as singer/songwriter gregg allman told cbs sunday morning last year. >> i remember going to the grocery store and seeing my face everywhere. i thought, what is happening? >> reporter: seven months after the landmark recording, the

first in a series of tragedies struck the group. gregg's brother, founding member and guitar great, duane allman was killed riding his motorcycle in macon, georgia, road. >> i ran into the hospital and i guy met me and took me into the chapel. i knew it right then. oh, man. >> reporter: one year later, bass player raymond barry oakley iii met a similar fate in an accident just three blocks away. ♪ when you can't find the lane on a cloudy day ♪ >> reporter: as for gregg allman, he spent years dealing with drug addiction and heartbreak, while chronicling his life in songs and touring relentlessly. a health scare in 2010 required a live transplant, but it hasn't slowed him down. his sixth solo album released last year was nominated for a grammy award and this summer

he'll spend many a night behind the keys of a worn-in organ performing songs that have made him a legendary figure in american history. >> legendary it is, gregg allman is telling the story of his life and career in a brutally honest memoir called "my cross to bear." very pleased to have him here at studio 57. welcome. >> thank you, charlie. >> looking at that life, what your son said about you in 2009 rings true. he said, when my dad sings, he's pulling for life, he's pulling from life. he has an innate ability to draw on that despair. do you think that's what it's about, as well as the joy of your life and put it into music? >> maybe subconsciously, but i

don't know. i've tried all this despair you speak of, i try to really rise above it. when i think back on my life, the happy times, they surface. >> it must be happy because you keep doing it. >> yeah. >> yes, you do, you keep doing it. i was so touched by your book, gregg. i read it last night. i took a big chunk of the evening and read it. you had so many life-changing moments. you call it "cross to bear" and you talk very poignantly about your brother duane. you said not a day goes by that you don't think about him. he didn't get to see the full success of the band. as little kid you wanted to be like your brother. would you talk about that, what he meant to you. >> my father was -- he came home from korea, picked up the wrong

hitchhiker, he unloaded a gun on him. i was 2 years old. my brother was a year and 18 days older than me. and i guess when mom kind of took over as mom and dad both, and did a hell of a job. and then he -- he was like a father figure, older brother figure. like when we went to that military school. we went in the third grade and fourth grade, and i went back in tenth and eleventh. >> you got a lot out of military school. you said if you had to do one thing over, it would be the drug use and abuse. you said you went to rehab 11 times, but you finally kicked it. it wasn't in rehab. . how did you finally kick it?

>> well, after receiving the award of the hall of fame awa , awaraward award, -- >> and you don't even remember that speech. you say you don't remember getting the speech because you were so out of it. >> the next day i saw a playback of it. oh, i was mortified. probably the best thing that could have happened because i -- i then hired a male nurse to come into my house. unlike the other 11 times, i didn't have that little spark of a voice saying, yeah, we'll go in here, do the dance for these people, but down the road, i'll have a couple beers watching the game, you know. it will be all right. that wasn't there this time. and because of that, i mean, i quit smoking, drinking, snorting, everything, all at once. >> good. >> it's the music that is you, though, to me.

i mean, all the stories and all that you've been through, in the end it's the music. and that's the legacy. >> that's it. >> what song, what moment is greatest for you? what will you take with you when you hear the last? >> lots to choose from. >> you're right. which song? >> yeah. >> i don't know. i get that question a lot, what's your favorite song -- >> yeah, i was trying to make it a little different. >> i would say the next one. >> yeah. but you listed all those classics. i mean, this is really -- this is part of people who are my age, it's part of who we were, we are and it shaped our sense of the culture. >> right. and it's been a wonderful ride.

>> well, charlie, gregg, talks about for him it's the music. for me it's the women. you've been married six times. and then i heard that you speak to two of them, including cher. i think that's great. and then i heard you're thinking about getting married again. do we really want to do this? i don't know. i'm worried about you. does your mother approve? do we really want to get married again? >> does your mother approve. >> your mother is 90-something. >> 94. >> i'm serious. do you really think you want to try it again? clearly you do. and why? you say in the book you don't like being alone. >> because -- because this is my first. >> how so? >> it's just -- it's all together different. i'm sober. i don't know. for a while i thought, man, it's definitely you. it's got to be you.

but -- well, a few things i could tell you, but they're private. >> no, no, you don't have to be that private. i just want to make sure you're okay. >> oh, i'm okay. >> you're okay. >> i'm totally okay. >> you're back on the road? >> yes, sir. >> you've had a liver transplant and you're ready to -- >> take off. >> oh, god, have i ever had a liver transplant. and with that i got a hernia. most people get -- they go and cut -- >> you basically have said, if i have to go, i want to go out on the road playing music. that's who i am. that's what i love. i want to be with my people and singing and playing. >> that's it. >> and that's what makes -- >> not i bad way to go, gregg allman. >> love to see you at the beacon. thanks for coming. >> we'll look for you. >> okay. i'll be there. >> you'll see her. >> i'll be there. believe me, you won't miss me, gregg allman. you won't miss me. >> the book is called "my cross to bear" on sale now.

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jason lee is a professional photographer with two adorable daughters. you would expect him to take family portraits. >> but he's taken the tradition to a whole other level. >> reporter: like most proud parents, jason lee loves taking photos of his kids. like most kids, 8-year-old kristin and 5-year-old kayla, can ham it up in front of the camera. and now lots of people are looking at their pictures. >> everybody in california. >> reporter: actually, online, more than a million people everywhere have been looking at the family photo album with pictures of the girls floating from balloons, flying on

roomsticks and hanging from a ceiling fan. do people think you really do this to your kids? >> yeah, people do. they say, is that photoshop? yeah, there is a lot of editing, i guess, involved. >> reporter: of course, kayla is not actually stuck to the wall with duct tape. and when the girls are hanging out, this isn't how they do it. this didn't really happen? >> it's a total of three photos. one for each child. and then one for the coat hanger. >> reporter: in another photo, lee suggested his own titles for a popular series of books. what do they say? >> how to make a mess and blame it on your sister for dummies. and then the other book, the younger daughter, she's holding a book that says, avoiding blame for dummies. >> reporter: by profession, lee is a wedding photographer and he always used his photographer's eye to capture the best in his children. part of it, clearly, it's your work. you're also blessed with adorable daughters. >> yeah, they're cute in pictures, but in real life

they're like crazy animals. >> reporter: his family photos took a particularly creative turn when his mother was diagnosed with cancer and it seemed that her granddaughters could make the chemotherapy easier to take. >> i guess i kind of wanted to, you know, bring a smile to her face by looking at the photos. and i think it just kind of grew from there. you know, the ideas kind of got a little crazier or more outrageous, i guess. >> reporter: the pictures posted online on lee's photo blog were originally meant mostly for family and friends. this is when they were really small. >> yeah, yeah. you can tell, you know. i always say, this is when we were really small. >> reporter: but as happens on the internet, word started to spread that these were more than snapshots. >> this is just a play on, you know, cat in the hat, you know, the section where the cat's holding up all the umbrellas. >> reporter: suddenly kristin and kayla were making people

smile around the world. >> we're maim mouse? uh-huh. yeah, famous. >> it's just a little overwhelming, you know. if you can imagine just suddenly, you know, you're getting hundreds of calls and e-mails. >> sometimes it's boring. >> reporter: lee has been getting lots of requests, of course, to add child portraits to his wedding photography business. and there's a possibility his photos of kristin and kayla may become a book. >> i would love to just do a book, just to kind of like tell, you know, the story and kind of share the photos, but it's not really about, you know, the money. it's more of a personal satisfaction. >> reporter: kristin and kayla's grandmother is doing fine now, in remission, so the photos may no longer be needed to lift her spirits. but jason lee sees no reason to stop sharing the fun with her or the rest of the world.

for "cbs this morning," john blackstone in san ramone, california. >> happy they shared them. >> me, too. >> that is definitely a book. kids are cute. dad's cute. i would buy the book. >> good looking family. i would buy it, too. >> nice job. >> he's been called the most talented seafood chef on earth. if you've ever been to new york's famd la bernidand, you know why. we'll talk about his latest and greatest honor when "cbs this morning" continues. ,,,,,,,,,,,,,

♪ i'm a shining star no matter who you are ♪ >> that's a great way to introduce our guest. getting a four-star review from the new york times is a huge achievement for any restaurant. keeping those four stars for more than 25 years is unheard of. we're on camera. >> i know we are. i'm looking. look at this. moving ever forward like a fish.

so, what's the secret here, sir? every rating -- the new york times has not reviewed you since 2005. >> yes. >> were you anxious, nervous, wondering what might happen here? >> and you are who? eric ripert. we should give you proper introduction. congratulations to you. >> thank you. >> thank you, eric ripert. >> last night i slept through the award but i think it's the tequila. yes, you get anxious and you get nervous. >> you get nervous, too? >> yes, of course. you know, we are judged all the time by bloggers and different guides and "the new york times" is one of the biggest moment for a restaurant. >> do you know when they're coming? do you have an idea when they're coming? >> we have an idea sometimes. i mean, we >> but the other thing is there's a michelin. >> yes, the maximum, three

stars, "new york times" is four. >> so you have nowhere to go. >> what do you mean i have nowhere to go? >> you just have to -- >> i'm looking for the next one. >> let he me tell you, i've been to your restaurant a couple times, and the halibut, i honestly thought angels were coming down. t was so good. >> thank you. >> the decor, i think, is beautiful, the atmosphere. it's not one of those places that's so loud. some restaurants are so loud you can't even hear the conversation. so, what is it you want people to feel when they walk into your place? it's an experience you create there. >> yes. and what we want is -- we want people to come and -- everybody is seeking a different experience. we really have to deliver for the people. some people just come for the good and they're foodies and they focus on the quality of the food. some people come to celebrate. some people come for business and so on. however, in between the wait staff and us in the kitchen, we are here to make the moment memorable.

that's really what is the secret. >> one thing that -- >> no, go ahead. >> speaking of that in the review from pete wells in "the new york times," he said what sets your restaurant apart is no one told me i was lucky to be there, but i was. you don't are to feel uncomfortable walking into the restaurant kind of thing. >> i'm very happy. we want people to feel welcome and people to be comfortable and have a good time. people don't come to le bernardin to look at us first, showing off. we're here to serve you. we are here to make sure that you have a great time and great food. >> your action is so gorgeous. >> i have an accent? >> yes. just a tea puff. it's so gorgeous. you described yourself as a hollerer which is hard for me to be a hollerer and screamer. it's hard to imagine, eric. how? >> i was very abusive chef, new york chef, because i was trained the old fashioned way, which was

being kicked in the butt, humiliated. i thought that was the right thing to do. therefore, when i came to america and i had my first chef job, i was doing what my predecessor taught me. and i lost most of my staff. it made me think. i was very unhappy in my life, to be angry. >> why are so many chefs doing television? i don't mean appearances on programs, but having their own programs. >> i cannot speak for other chefs. i know i like to be on television. i have a show. i like to be on television because i like to share my knowledge. i have -- i like to have new experiences and inspiration. and it's great to be on tv. charlie, you know that. >> i should know that. i do know that. i celebrated my birthday with him, by the way. he said no other restaurant in the city makes the simple cooking of fish and the fish at le bernardin is cooked simply

when it's cooked at all, seems ♪ [ male announcer ] for our families... our neighbors... and our communities... america's beverage companies have created a wide range of new choices.

>> good morning. a controlled burn may have started a bit wild fire near california nevada border that started yesterday. it promptly spread to 4,400 a.. to homes and 17 buildings have been destroyed. two men accused of attacking a bright giants fans at dodger stadium last year are in more trouble with the law. they're facing federal charges of being felons in possession of firearms. they are due back in court next week. voters in san jose will decide on the city's minimum wage. they voted last night to place the measure on the ballot that would increase pay from $8-$10 per hour >> pretty windy around the bay

area. a lot of sunshine right now. mostly clear skies headed towards mt. diablo. starting to see some reason conditions around the bay area already. gusts up to 23 in santa rosa. the wind will be the big story today. strong gusts out towards the beaches. highs in the '50s and '60s. breezy and around the bay, maybe some low 80s in the valleys. temperatures will continue to fall off, a slight chance of rain on friday but for the holiday weekend we are looking good with high pressure building in.

>> we're still really backed up on the nimitz pass the coliseum. we had an earlier accident pass the high street exit and this is what we're left with. the drive time is nearly 40 minutes in those northbound lanes between 238 and a maze. southdown 101 lucas valley road, an accident involving a motorcycle. speed sensor show speeds below

25 mi. per hour.