A legal battle between financial firms and the retailing industry took a new turn on Wednesday when the Federal Reserve said it would appeal a decision involving debit card transactions fees, DealBook’s Peter Eavis reports.
The move came after a judge last month shocked banks and companies like Visa and MasterCard by striking down a Fed regulation governing how much retailers must pay to lenders and other companies when customers swipe debit cards. The retailers cheered the decision because it could require the Fed to rewrite the rule in such a way that retailers would pay less to the banks. But at a hearing on Wednesday, the Fed’s top lawyer, Scott G. Alvarez, told the judge the central bank would appeal his decision.
“The Fed’s move raises a spate of important issues five years after the financial crisis of 2008,†Mr. Eavis writes. “The appeal will be a crucial test of the courts’ power to overturn the financial regulations that stemmed from the sweeping banking overhaul after the crisis.â€
BLOOMBERG L.P. TO INCREASE OVERSIGHT  | Bloomberg L.P. said on Wednesday that it was making changes to its journalism operation after an investigation commissioned by the company showed problems with the use of client data in the past, Nathaniel Popper reports in DealBook. The results of the investigation were released a few months after banks and government officials expressed concern that Bloomberg’s journalists could see private information using their data terminals.
“Two separate but related reports found that the company’s journalists had access to information about clients through a number of channels that those clients did not know about,†Mr. Popper writes.
CYPRUS BANK BAILOUT MAKES RUSSIANS OWNERS  | The bailout deal in March for the Mediterranean nation of Cyprus was supposed to signal the end of an economic model fueled by cash from Russia, with wealthy Russians losing billions. “But the Russians, though badly bruised, are now in a position to get something that has previously eluded even Moscow’s most audacious oligarchs: control of a so-called systemic financial institution in the European Union,†Andrew Higgins reports in The New York Times.
“The exercise was meant to banish what Germany and other Northern European nations viewed as dirty Russian money from Cyprus’s bloated banks. Instead, it has pulled Russia even deeper into Europe’s financial system by giving its plutocrats majority ownership, at least on paper, of the Bank of Cyprus, the country’s oldest, biggest and most important financial institution.â€
ON THE AGENDA  | Sears Holdings reports earnings before the market opens, while Gap reports results this evening. The Markit P.M.I. manufacturing index for August is out at 8:58 a.m. Sallie L. Krawcheck, a former big bank executive who owns the women’s network 85 Broads, is on Bloomberg TV at 7 a.m.
PAYING UP TO DIG DEEP  | A local government council in London has demanded a fee of £825,000 ($1.3 million) from a hedge fund manager looking to build an underground wing below two adjacent properties, The Financial Times reports. The investor, Reade Griffith, the founder of Polygon Investment Partners, and his wife envision a 900-square-meter basement with a swimming pool and spa. The fee, demanded by Kensington & Chelsea council, would go toward affordable housing elsewhere in the area. Still, such payments are typically reserved for commercial developments or housing estates, according to the newspaper. “Their extension to domestic homes could be seen as a new tax on wealthy homeowners.â€
Yahoo’s Internet Traffic Achieves a Milestone  | In July, the Web giant Yahoo attracted more visitors in the United States than Google, for the first time since May 2011, according to comScore, Bloomberg News reports. BLOOMBERG NEWS
Bidders Line Up for Hong Kong Grocery Chain  | Eight firms, including the private equity firm TPG and Hong Kong supermarket companies, submitted bids for ParknShop, a grocery store chain in Hong Kong that could sell for up to $4 billion, The Wall Street Journal reports. WALL STREET JOURNAL
Slump in PC Demand Takes a Toll on H.P. Â |Â Hewlett-Packard reported on Wednesday that revenue in its third fiscal quarter fell 8 percent, to $27.2 billion, from $29.7 billion in the period a year earlier. NEW YORK TIMES
Why R.B.S. Should Consider I.P.O. for Branches  | By pursuing a market listing, the Royal Bank of Scotland would be able eventually to fetch a better price for the 315 branches it needs to shed, George Hays of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
Goldman Trading Mishap Said to Draw Scrutiny  | The Securities and Exchange Commission is looking into a malfunction at Goldman Sachs that sent errant orders into the stock options market, according to The Financial Times. FINANCIAL TIMES
Wells Fargo Is Said to Be Cutting Mortgage Jobs  | Wells Fargo, the largest home mortgage lender in the United States, plans to eliminate 2,300 jobs in its mortgage business as demand for refinancings has slowed, Bloomberg News reports. BLOOMBERG NEWS
JPMorgan Chase Not Akin to Nazis, Report Finds  | An outside review of Bloomberg L.P.’s practices found that a controversial report that compared the damage in an Italian town after a bad deal with JPMorgan to the fallout from the Nazis’ occupation in World War II went “too far.†DealBook »
Drawing Lessons From an Intern’s Death  | The death of a 21-year-old intern at Bank of America Merrill Lynch in London “could â€" and should â€" spark changes in the work policies for young investment bankers,†Kevin Roose writes in New York magazine. NEW YORK
Public Relations Firm Announces Leadership Changes  | The public relations firm Joele Frank, Wilkinson Brimmer Katcher said on Wednesday that Matthew Sherman, a partner, had been named president, and that Andrew Brimmer and Daniel Katcher, two of the founding partners, had been appointed vice chairmen. Joele Frank, the founder and managing partner, is continuing in her role. NEWS RELEASE
Hillary Clinton to Address Carlyle Group Investors  | Hillary Rodham Clinton is scheduled to be featured at the Carlyle Group’s investor conference on Sept. 9, according to Politico. She previously spoke at a conference for another private equity firm, K.K.R. POLITICO
In Sweden, a Tax Crackdown on Private Equity  | Reuters reports: “Sweden is demanding that private equity firm EQT Partners and some of its employees pay 647 million Swedish crowns ($100 million) in tax on past profits as it cracks down on buyout firms.†REUTERS
Ackman Acknowledges ‘Mistakes’ in a Letter to Investors  | William A. Ackman sounded a note of contrition in a letter to shareholders, saying that his firm’s investment in J.C. Penney has been a “failure.†DealBook »
A $1.4 Billion Start-Up Hedge Fund in Asia  | Two executives of the hedge fund Millennium Management are “preparing to start a $1.4 billion hedge fund in Asia,†Reuters reports, citing unidentified people familiar with the matter, “in what would be the region’s largest such fund launch.†REUTERS
For Twitter, ‘Low Profile’ I.P.O. Seems Unlikely  | A report in The New York Post that Twitter wanted its initial public offering to be “low profile†led to a round of commentary online. Fortune’s Dan Primack had a blunt response: “It. Will. Be. High. Profile.†NEW YORK POST  | FORTUNE
Shifts in Silicon Valley Unsettle the Big Players  | “The bad earnings news from older, big technology companies does not â€" so far â€" appear to be spreading to more youthful Internet companies like Google or Salesforce.com, which provide their software as a service over the Internet,†The New York Times writes. NEW YORK TIMES
No Clarity From Fed on Plans for Stimulus  | “The confusion over exactly when the Federal Reserve will begin scaling back its huge economic stimulus efforts only deepened Wednesday, with the release of a summary of the deliberations at the central bank’s last meeting in late July,†Nelson D. Schwartz writes in The New York Times. NEW YORK TIMES
In Trial of Fallen China Boss, Focus on Business Ally  | Xu Ming, once a little-known entrepreneur from northeastern China who worked his way into the good graces of China’s elite families, is now in custody, and one of his relationships has become a piece of evidence in the trial of the former Politburo member Bo Xilai, David Barboza reports in The New York Times. NEW YORK TIMES
Clues to How Spitzer Would Invest City’s Funds  | How would Eliot Spitzer, a fierce critic of Wall Street, approach investing New York City’s $140 billion in pension funds if he were elected comptroller? “There may be clues within the $40 million charitable family trust that Mr. Spitzer has played a major role in as a founder and trustee for the last 12 years,†Michael Barbaro writes in The New York Times. NEW YORK TIMES
Indian Tribes Fight for Their Ability to Make Online Loans  | Two Indian tribes sued Benjamin M. Lawsky, New York’s superintendent of financial services, after he ordered online and tribal lenders to stop offering “illegal payday loans†in New York, The Wall Street Journal reports. WALL STREET JOURNAL
