Merrill Lynch has agreed to pay $160 million to settle a racial bias lawsuit that wound through the federal courts for eight years, Patrick McGeehan reports in DealBook. The payout in the suit, which was filed on behalf of 700 black brokers who worked for Merrill, would be the largest amount ever distributed to plaintiffs in a racial discrimination suit against an American employer, Mr. McGeehan writes. Merrill, which is now owned by Bank of America, also agreed to take advice from black employees on how to improve their chances of success as brokers.
The terms of the preliminary settlement were provided by Linda D. Friedman, a Chicago lawyer who represents the brokers. A spokesman for Merrill Lynch refused to confirm the terms. The pool of money dwarfs recent payouts by other Wall Street firms, including $16 million that Morgan Stanley agreed to pay in 2008 to resolve a suit brought by black and Hispanic brokers.
“This is a somewhat heroic story because these plaintiffs just kept fighting and fighting,†said John C. Coffee Jr., a professor at Columbia Law School. “This is like a triple-overtime win.â€
REGULATORS PREPARE PENALTIES FOR JPMORGAN  | Two regulators â€" the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau â€" are preparing a series of enforcement actions and fines against JPMorgan Chase stemming from its dealings with consumers during the recession, Jessica Silver-Greenberg and Ben Protess report. Under the terms of the civil orders, which may be announced as soon as next month, the bank will have to acknowledge internal flaws and dole out at least $80 million in fines, according to people briefed on the matter.
The most costly cases for JPMorgan stem from concerns that the bank duped its credit card customers into buying products pitched as a way to shield them from identity theft. The consumer bureau will levy a fine of roughly $20 million, while the comptroller’s office is expected to extract about $60 million, DealBook reports. “In another set of actions, the regulators are aiming at the bank for the way it collected overdue bills from consumers, the people said. It is unclear whether those cases will yield any fines.â€
ON THE AGENDA Â |Â Data on pending home sales in July is out at 10 a.m. Joe Ratterman, the chief executive of BATS Global Markets, is on Bloomberg TV at 10 a.m.
RULE ON PAY DISCLOSURE COMPLICATES THE PROBLEM  | The idea sounded simple: require that the pay of a company’s chief executive be compared to the median salary of its employees. But “Congressional leaders, in their rage against ever-rising executive compensation and income inequality, have created more murkiness,†Steven M. Davidoff writes in the Deal Professor column. “Carrying out the law may well result in costs that are just as obscene as the pay it is disclosing.â€
“The first problem came in how compensation is calculated,†Mr. Davidoff writes. It can be difficult to calculate an executive’s various types of compensation as one figure, and finding the median of “all†employees’ pay can be challenging for a multinational conglomerate. “Then there is the issue of when to calculate it. The number will fluctuate from day to day. The end result is that what was thought a simple calculation is turning into an exercise that could cost some companies millions.â€
BlackBerry Said to Weigh Spinoff of Messaging Service  | BlackBerry is “considering spinning off its messaging service into a subsidiary that would operate with more independence, according to people familiar with the matter,†The Wall Street Journal reports. WALL STREET JOURNAL
Neiman Marcus May Field Takeover Offers as Alternative to I.P.O.  | The owners of the department store chain Neiman Marcus “are asking potential bidders to submit takeover offers next week, people close to the situation said,†The Wall Street Journal reports. WALL STREET JOURNAL
A Cross-Border Bottleneck for Deals  | “Deal making is growing more complex, with companies needing to win approval from regulators in up to 100 countries,†The Financial Times writes. FINANCIAL TIMES
South Korean Firms Look to Sell Energy Assets  |Â
WALL STREET JOURNAL
Wanted on Wall St.: The Perfect Outfit for Burning Man  | A number of Wall Street types have been “hitting up New York’s legendary Screaming Mimis vintage store for their costuming needs†for the Burning Man festival in Nevada, Paper magazine reports. PAPER MAGAZINE
Last Respects Are Paid to a Trailblazer for Women on Wall Street  | The funeral for Muriel Siebert on Tuesday was characterized by a “feistiness that none of those gathered at Central Synagogue in midtown Manhattan would have found surprising,†Bloomberg News writes. BLOOMBERG NEWS
Citigroup and JPMorgan Win Auction for California Bonds  | Citigroup and JPMorgan Chase entered winning bids for “$764 million mix of tax-exempt new money and refunding general obligation debt issued by California in a competitive sale,†Reuters reports. REUTERS
Private Equity Said to Be Out of Running for Hong Kong Chain  | A number of private equity groups have been knocked out of the running to acquire ParknShop, the Hong Kong supermarket chain that is considering selling itself in a deal that could command $3 billion to $4 billion, according to people with knowledge of the matter. DealBook »
Simcere of China to Be Taken Private for $495 Million  | The Simcere Pharmaceutical Group of China said it had agreed to be acquired by a consortium that includes its chairman, Jinsheng Ren, Reuters reports. REUTERS
A Cleanup After the Private Equity Boom  | “Hilton is one of many cleanup acts that have been quietly going on in the world of private equity, as the industry atones for a debt binge in the years before the financial crisis,†Reuters writes. REUTERS
After Ackman’s Exit, J.C. Penney Remains a Hedge Fund Play  | Several of William A. Ackman’s rivals in the hedge fund world are not bailing out of the troubled retailer J.C. Penney just yet. DealBook »
Facebook Releases Information About Government Requests  | Facebook said in a report covering the first six months of 2013 that government groups in 74 countries demanded information about more than 37,954 accounts on the social network. The report said half of all requests came from the United States, the Bits blog writes. NEW YORK TIMES BITS
With Alibaba Preparing for I.P.O., Hong Kong Faces a Choice  | Hong Kong can either “grant Alibaba Group Holding Ltd. a shareholder structure that mirrors the world’s largest Internet companies, or stick to rules meant to protect ordinary investors and risk losing the largest initial public offering since Facebook,†Bloomberg News writes. BLOOMBERG NEWS
Twitter Hires a Head of Commerce  | By hiring Nathan Hubbard, a former president of Ticketmaster, as its first head of commerce, Twitter is looking to increase its clout in online shopping, Bloomberg News writes. BLOOMBERG NEWS
Former JPMorgan Trader Surrenders in Spain in ‘London Whale’ Case  | Javier Martin-Artajo was released soon after his arrest on Tuesday morning, beginning what could be a lengthy extradition process over charges that he hid billions in trading losses. DEALBOOK
Bank Executive Admits Using Bailout Money to Buy Condo  | Darryl Layne Woods, former chairman of Mainstreet Bank in Missouri, used a good portion of the $1 million in bailout money that his bank received to buy himself a luxury vacation condo in Florida. DealBook »
A Holiday From Taxes, and Often From the Strings Attached  | Tax policy experts are suspicious of tax holidays, and most experts question the effectiveness of attaching restrictions to such legislation, Victor Fleischer writes in the Standard Deduction column. Many companies find a way around them. DealBook »
At the Fed, Survey Finds Employees Demoralized  | “Regulators overseeing the nation’s largest financial institutions are distrustful of their bosses, afraid to speak out and feeling isolated, according to a confidential survey this year of Federal Reserve employees,†Shahien Nasiripour reports in The Huffington Post. HUFFINGTON POST
S.E.C. Said to Focus on Nasdaq Pricing System  | The Securities and Exchange Commission “is focusing its investigation into the Nasdaq outage on why a system for distributing stock prices and quotes was not robust enough, and believes a spat between exchanges is a distraction, a source familiar with the matter said on Tuesday,†Reuters reports. REUTERS
Judge Favors a Narrow Focus in Apple Price-Fixing Penalty  | “I want this injunction to rest as lightly as possible on the way Apple runs its business,†Judge Denise L. Cote of the United States District Court in Manhattan said on Tuesday. NEW YORK TIMES
