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Early Start with John Berman and Zoraida Sambolin

Sony Hackers Threaten Theater Attack; 145 Dead in Attack on Pakistani School; Sydney Hostage-Taker Had Gun License; Obama Signs $1.1 Trillion Spending Bill; Mass Slaying Suspect Found Dead; Russian Ruble Continues to Plunge; Stocks Down 4.5 Percent In December

Aired December 17, 2014 - 04:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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JOHN BERMAN, CNN ANCHOR: Movie theaters threatened with terror overnight. Some chains pulling the plug on Sony's new film "The Interview." Hackers promising violence on who show this new movie. And this morning, all eyes are on North Korea as Sony is hit with more leaks, and now, new lawsuits. We have live team coverage breaking down this strange surprising story ahead.

Pakistan school massacred. That town reeling after Taliban terrorists stormed a school, killing nearly 150 people, so many of them children. The funerals have begun this morning. We are live in Pakistan with new developments.

And a history of violence. New information about the gunman behind the deadly terror attack in Sydney Australia, that as we learned more about be the hostage who died while trying to take down the terrorist. We're live in Sydney with the latest developments there as well.

Welcome back to EARLY START, everyone. I'm John Berman. Thirty-one minutes past the hour. Christine Romans is off this morning.

And happening this morning, cyber terror is turning into something of a real problem for the entertainment industry. That as the Landmark Theater chain announced overnight that the New York premiere of Sony pictures' comedy "The Interview," that premiere has been cancelled. It was set for tomorrow.

This follows a new warning from the group behind cyber attack on Sony. That group calls itself the Guardians of Peace. And it threatened unspecified violence at theater has show the film, which is about an attempt to assassinate North Korean leader Kim Jong-un. The person close to the situation tells CNN that despite the fact that the premiere has been cancelled, Sony has no plans to pull "The Interview" altogether.

Let's get the latest from CNN's Pamela Brown in Washington -- Pamela.

(BEGIN VIDEOTAPE)

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, John, this morning, the FBI is investigating a threatening message reportedly from the Sony hackers, promising a bitter fate to anyone who sees the controversial North Korean comedy "The Interview" set to release on Christmas Day. The message says that soon, all the world will see what an awful movie Sony Pictures Entertainment has made. The world will be full of fear, remember the 11th of September 2001.

We know the Department of Homeland Security says it is assessing the threats' credibility. Officials say they're looking into this similar to how they would investigate a bomb threat. But at this point, there's no new intelligence indicating threats against theaters in the U.S.

In the wake of this threat though, the stars of the comedy, Seth Rogen and James Franco, have actually pulled out of press appearances. Multiple law enforcement sources I've spoken to say the strong suspicion is that North Korea is the instigator of the hack and possibly outsourced it to a group elsewhere as retaliation for the movie. This morning, the FBI is scrubbing Sony's computer system, trying to gather enough evidence to be able to definitively point the finger at the hacking culprit.

But, John, these investigations are complex and nuanced. And it could be some time before we know for sure.

(END VIDEOTAPE)

BERMAN: All right. This film and reaction has that rippled effects from Washington where you just saw Pamela Brown in New York where the premiere was cancelled, all the way to Japan where Sony Pictures is headquartered. Now, Japan and North Korea have had a long tense relationship and the release of this film has only increased that friction. North Korea has called the film "The Interview" an act of war.

CNN's Will Ripley joins us now live from Tokyo.

Will, at this point, what's the reaction inside the Sony corporate headquarters and how do they explain the fact that this film was approved in the first place?

WILL RIPLEY, CNN CORRESPONDENT: Well, what it shows is that there really was, and is, still, a lack of understanding, apparently between the Japanese executives who run Sony here in Tokyo, and their American counterparts at Sony Pictures in Hollywood. For years, for more than two decades, executives here have had a very hands-off approach. They don't interfere with the American movie making process.

And in fact in some of these hacked e-mails, they're revealing some cultural clues, like the fact that the Sony CEO was very hesitant to directly confront the CEO of Sony Pictures simply because in Japan, non-confrontation is a big deal. And so, the fact that step was even taken to question perhaps this assassination scene of Kim Jong-un is too graphic, let's not have the head explode and have the skin melt so graphically.

But when you take a step back and you think about the fact that Sony, this iconic Japanese company is in a country that has some very tense relations with North Korea. And unlike in United States, where North Korea is far away, North Korea is very close to home, for people in Japan. It was just a few decades ago that North Korean operatives were kidnapping Japanese citizens and taking them to North Korea and training them as spies -- John.

BERMAN: And, Will, you told me something that I found really surprising, that this man in charge of Sony Pictures, Michael Lynton, actually have spoken to security analysts at the RAND Corporation about the potential impact of this film?

RIPLEY: Yes, that came out in hacked e-mails. And I was able to get ahold of RAND Corporation's spokesperson in Santa Monica overnight. And they said that Lynton actually is on the RAND board of directors. It's a nonprofit global think tank. So, there was an existing relationship.

And when it became clear that there were some serious questions about the content of this movie, he asked one of RAND's Korea analysts to take a look at the film and write up a report. I'm told that analyst wrote up a very long memo and gave it to Michael Lynton saying what he thought the reaction would be among audiences in Asia, specifically in Korea. But we don't know this morning what that note actually said.

BERMAN: All right. Fascinating, huge implications all around the world. Will Ripley for us in Tokyo.

Let's bring it back to New York. Let's talk about the business angle here. These are tough times for Sony.

And Cristina Alesci is here.

They're facing new lawsuits?

CRISTINA ALESCI, CNN BUSINESS CORRESPONDENT: Yes, the company's legal troubles have started. Two former employees have filed a lawsuit against Sony for failing to protect their personal information.

The recent breach resulted in exposed Social Security numbers, medical information and pay data. They say Sony was hacked before, yet still failed to secure its networks. The former employees are asking the court to make a lawsuit a class action, so other employees could join in.

That could get very expensive for Sony. Sony shares are down 9 percent since the hack occurred at the end of November. But now, remember, the stock market has been down in recent days are so this may not be totally tied to the hack itself.

The stock, remember, up 14 percent for the year. And the market may not get too down on Sony because the hack only impacted Sony Pictures, which is one division that accounts for about 10 percent of the company's sales.

But still, there's some big long-term questions about A-list celebrities perhaps not wanting to work with Sony any longer after their information was compromised and all of these embarrassing e- mails came out about them.

BERMAN: Yes, I'll say, there are going to be actors and actresses, and already are, who are none too happy with being parts of these e- mails.

ALESCI: Indeed.

BERMAN: All right. Cristina Alesci, good to have you here with us. Appreciate it.

The funerals have already begun in Pakistan for the 145 people murdered in the horrific attack by Pakistani Taliban gunman. The number of dead includes 132 students, kids, most under the age of 16. The overall number does not include the seven terrorists who died in the attack.

CNN's Michelle Stockman is live for us now in Islamabad.

Michelle, what's the latest?

MICHELLE STOCKMAN, CNN INTERNATIONAL CORRESPONDENT: We understand that in response to this attack, the army chief has travelled to Kabul to meet with the Afghan president there now. We're waiting to hear details of what meeting's about. It could be to investigate possible links to this attack within Afghanistan.

And also, it could be to discuss a response. As we know, the Pakistani Taliban is -- has a stronghold in tribal areas that are in the border between Afghanistan and Pakistan. They easily travel through the porous border into and between the countries. And so, that's part of the response. We've seen the prime minister address the nation.

He says that it's due to the military's strong campaign against the militants in this area that this attack has happened, that it's part of the blowback. And so he says, it's likely that this will continue. But country right now is United States.

Pakistan is a divided country. There are a lot of political tensions, a lot of tensions between government and military, but they're trying to show a united front right now as the country, the city of Peshawar deals with this massive blow, just grief across the community, as they've spent the day burying their dead.

BERMAN: It's unimaginable to think about the grief they must be going through.

Michelle Stockman for us in Islamabad, thanks so much.

We have new information this morning about the terror attack on a cafe in Sydney. The gunman whose siege led to the death of two people. He had had a gun license and he had falling off a government security watch list.

Australia's prime minister is vowing to find out why and said they are launching an investigation. Let's listen.

(BEGIN VIDEO CLIP)

TONY ABBOTT, AUSTRALIAN PRIME MINISTER: I will not rest until I am confident that you are as safe as any government can possibly make you.

(END VIDEO CLIP)

BERMAN: Let's get the latest now from Sydney.

CNN's Andrew Stevens is there.

Andrew, what is the latest this morning?

ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT: Just getting new information now about where the gunman actually did have a license or not. New South Wales police, Sydney is part of New South Wales, saying that they have records, that Monis actually did have a license to carry a gun, even though the Australian prime minister said he did have.

Certainly, the wider concern, Tony Abbott, John, is very, very hard on terrorism, on security for Australians. And he is promising as we heard there a wide ranging investigation as to exactly why Monis was even on the streets, considering his criminal record, and not to mention his views on extremism, views that were very well-known to security forces here in Australia.

Here in Sydney, meanwhile, let me show you the scene here. John, this is the memorial to the two dead -- the two that lost their lives in the early hours on Tuesday morning. As you can see there, this field of floral bouquets just continues to grow. There's a line snaking down Martin Place, showing the continued sort of respect being shown by the citizens of Sydney.

I can speak to a lost people today. They're all telling the same story, they just want to come down to show their respect, to being part, the grieving, the mourning process for the loss of life and show solidarity among themselves, Sydneysiders among themselves. And this is likely to continue for a couple of days. Talk now of putting up a permanent memorial to the two who lost their lives here, John.

BERMAN: It tells an important part of the healing process for the whole city, the whole country to come out and look at that area to see this memorial.

Andrew Stevens for us in Sydney, thank you so much.

Breaking here overnight, President Obama signed the massive $1.1 trillion spending bill that will keep the federal government operating for the next nine months. The measure rolls back regulations on banks but it does keep Obamacare funded for the length of the deal. The Department of Homeland Security only gets funding through February, which sets up a showdown over the president's executive action on immigration.

All right. There is trouble ahead for holiday travelers in the forecast. Let's go to meteorologist Pedram Javaheri for an early look at the weather -- Pedram.

PEDRAM JAVAHERI, AMS METEOROLOGIST: Let's talk about what's happening nationally today. We do have high pressure across the central states. Generally, clear skies, especially if you work your way toward the Southeast, will call for mostly sunny skies. But notice the Northeast, from showers left in place. Snow showers even possible in north New England.

The perspective is head on over the next 24 hours, the shower really stay north of Boston, in portions of Connecticut, Vermont, New Hampshire, Upstate New York. That's where we have showers in place for the next 24 hours.

But all eyes go down toward the Southern States, the Gulf Coast state, pretty impressive storm drawing in, some Gulf moisture here from New Orleans out towards Memphis, eventually Atlanta from Thursday onto Friday, could be pretty soggy. This point, the models do not bring it along the Northeast. Initially, the nor'easter was in the forecast, it looks like at this point, steering away from that.

So, here is what is in the forecast, the next 24 or so hours. Half of inch or so of rain in Boston. Northward, temperatures cool for northern portions of Maine, but we do have about four to eight inches of snow left in the forecast. But around New York, points southward, looking to be dry.

Let's send it back to you.

BERMAN: All right. Our thanks to Pedram for that.

Breaking overnight: new developments in the manhunt for an ex-marine wanted in the murder of six people in a Pennsylvania suburb. The new information, next.

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BERMAN: The manhunt for a former marine reservist wanted in the murder of his ex-wife and five members of her family, that manhunt is over. The search for Bradley William Stone ended with the discovery of his body in the woods near his home. It appears to be a suicide.

National correspondent Miguel Marquez is in Montgomery County, Pennsylvania, for us with the latest -- Miguel.

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MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: John, it's a very gruesome end to this horrible, horrible story here. The district attorney here in Montgomery County saying that Mr. Stone, Bradley Stone, killed himself by self-inflicted cutting wound to the center of his body. He was found in the woods about a half mile from his home here in Pennsylvania. His victims died in a very brutal way as well, both by gunshot wounds

and by cutting wounds. The only survivor of all this, a 17-year-old male who is still in stable but serious condition in the hospital suffered several cutting wounds and even had three fingers cut off.

As for the motive, the district attorney is saying that it is hard to define at this time, saying that there was a bitter ongoing custody dispute over the two children that Mr. Stone and his wife had that just last week, he tried to wrestle them away from her so he could take custody. He was denied that. And that may have set off this chain of events.

UNIDENTIFIED FEMALE: To have an event like that shatter the peace and tranquility of the community is very disturbing. We've been talking with the school districts, in particular, Souderton School District, where the kids attended the school. They've been shattered by this. They've been really devastated. But they're standing together and making sure that the kid, the families and the school community has the kind of support that's needed for everyone to heal.

MARQUEZ: The only saving grace in this entire story, his two daughters, he dropped them off at a family friend and neighbor's house before he went into the woods. It's not clear how long he was in those woods dead before authorities were able to find him. That 17- year-old is still fight for his life in the hospital. It is hoped he's able to survive. He's not been able to talk to police yet -- John.

(END VIDEOTAPE)

BERMAN: All right. Our thanks to Miguel. What an awful story that is.

Forty-eight minutes after the hour.

Prosecutors in Los Angeles will not to file sex abuse charges against Bill Cosby. The decision comes after just 10 days after an alleged victim Judy Huth met with Los Angeles police detectives. She has filed a civil suit against Cosby, claiming he forced her to perform a sex act on him in 1974, when she was just 15 years old. Cosby's attorneys claimed that she, Huth, tried to extort $250,000 from Cosby before filing her suit.

Meanwhile, Bill Cosby's daughter Evin is publicly defending her father. She released a statement to "Access Hollywood" that reads, "He is the father you thought you knew. 'The Cosby Show' was my today's TV reality show. Thank you, that's all I would like to say."

NFL players are now treated under a brain design program for veterans. The after the impact program is offered at the Eisenhower Center in Ann Harbor, Michigan. It provides intense treatment for concussions and mild traumatic brain injury. The NFL expects that 28 percent of its retired players that they could suffer from Alzheimer's disease or some mild form of dementia some day.

Forty-nine minutes after the hour. Imagine getting an acceptance e-mail from your dream college, only to

find out that the whole thing say mistake. That's what 293 students who apply for early admission at Johns Hopkins University are dealing with this morning. School officials say it was a technical glitch and apologized for any confusion it might have caused. What happens is they got an acceptance letter and turns out they weren't accepted.

Russia is in crisis this morning. The economy there in shambles. What went so wrong and how the U.S. plans to issue even more sanctions. We're live in Moscow, next.

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BERMAN: All right. Happening right now -- the Russian ruble, the main currency there is in free fall. And this is causing huge ripple effects all around the world. And it comes after a huge interest rate hike earlier this week in Russia that was aimed at propping up the ruble. It also comes as President Obama gets ready to sign new sanctions against Russia, which could only make the situation there worse.

Let's go live now Matthew Chance in Moscow to get the latest.

Good morning, Matthew.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, John.

That's right. The sanctions the White House says it could sign by the end of the week would put sanctions, restrictions on high-tech oil projects between the two countries. It could put sanctions on defense contractors as well. As well as supply nonlethal and lethal military aid to Ukraine. Something that hasn't even been contemplated before, at least not enacted before.

So, these are pretty wide-ranging sanctions, pretty serious. They weren't, even if it's signed, they won't necessarily mean that President Obama has to enact those sanctions. But they are sort of a threat hanging over Russia if it doesn't change its actions. But on that issue, Secretary of State John Kerry saying that he's observed that Russia has been working towards stabilizing the situation in eastern Ukraine.

He gave some remarks yesterday in London saying that, look, you know, the sanctions that are already in place, could be lifted in a matter of weeks or even days, depending on the choices that president Putin of Russia makes. And so, people are now watching very carefully as to what action President Putin will take. He's got a big press conference, his annual press conference that he gives every year. That's taking place tomorrow. Usually lasts four or five hours.

And it's going to be watched very closely to see if there's any indication as to whether he's going to claw back on his position in Ukraine, step back from the brink as it were, or even double down. I mean, who knows, what the plan is now for the Kremlin as it faces this mass of economic crisis, John. BERMAN: All this is happening as consumers there are lined up to find

a safe place -- try to find a safe place to put their rubles that are just plummeting in value.

Matthew Chance for us in Moscow -- thanks so much.

Fifty-five minutes after the hour.

American Apparel's controversial founder has been shown the door. An early start on your money, next.

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BERMAN: It is time for an early start on your money.

Cristina Alesci is here.

How are futures doing?

ALESCI: Futures are a little up right now. But who knows what will happen next in this wild market. Take yesterday. It was a very volatile day. The Dow closed down 112 points and it's dropped for six of the past seven trading days.

Today, investors are watching the Federal Reserve very closely for any hints at a time line to interest rate hikes, and also keeping an eye on plunging oil prices.

Now, sticking with oil prices, crude oil is $55 a barrel right now. That's a five-year low, down almost 50 percent from the summer peak. That's a nightmare for energy producers, especially the smaller ones. But great times for driver.

The national average for a gallon of regular is $2.51 today. That price is just -- keeps ticking down every day, putting an extra hundred bucks in the typical family's pocket.

Now, American Apparel's controversial CEO is out. This is a story I reported very closely. Dov Charney was fired in June for misconduct, but he stayed on as a consultant and kept his base salary.

Now, Charney is out for good. He's faced sexual harassment suits from former employees and has been known for his wild antics like reportedly conducting meetings in his underwear. He's been replaced by fashion executive Paula Schneider.

American Apparel stock is getting a lift before the bell. It has been down more than 50 percent this year. This is not your typical CEO. He's got -- he founded the company. And he took a lot of artistic license -- let's just put it that way.

BERMAN: Yes, no more underwear meetings.

Cristina Alesci, thanks for being with us. Appreciate it.

EARLY START continues right now.