New York’s attorney general is preparing a lawsuit against the nation’s largest home lender, Wells Fargo, accusing the bank of flouting the terms of a multibillion-dollar settlement aimed at stopping foreclosure abuses, Jessica Silver-Greenberg reports in DealBook. The lawsuit, which claims Wells Fargo violated the guidelines of last year’s agreement between five big banks and 49 state attorneys general, is expected to be filed as early as Wednesday.
Attorney General Eric T. Schneiderman previously fired a warning shot at Bank of America and Wells Fargo, announcing in May that he had found that both banks violated the settlement’s terms. That prompted negotiations with the two banks, but the outcomes for the lenders are starkly different. Bank of America is poised to announce a series of additional protections. But Wells Fargo is bracing for a lawsuit, with Mr. Schneiderman having fielded complaints from borrowers struggling to save their homes.
Vickee J. Adams, a spokeswoman for Wells Fargo, said the bank had not been served with a copy of the lawsuit. But, she said, “if true, it is very disappointing that the New York attorney general continues to pursue his course, given our commitment to the terms of the National Mortgage Settlement and ongoing engagement.â€
EMPIRE STATE BUILDING GAINS A TICKER SYMBOL Â |Â The Empire State Building has gone to Wall Street. Empire State Realty Trust Inc., whose office properties include the iconic 102-story Art Deco tower, raised $929.5 million on Tuesday in one of the biggest initial public offerings of a United States real estate investment trust, or REIT, Julie Creswell reports in DealBook. The 71.5 million shares priced at $13, the low end of the expected range. The REIT is expected to begin trading on Wednesday on the New York Stock Exchange under the symbol ESRT.
“The public offering allowed unit holders, whose stakes in the building date back to the early 1960s, the flexibility many sought to eventually cash out by selling their REIT shares,†Ms. Creswell writes. “The big winners are Peter L. Malkin and his son, Anthony E. Malkin. The public offering allowed them to consolidate their intricate empire of buildings that they either owned or controlled in Manhattan and in Stamford, Conn. The offering values their stake at about $460 million. Anthony Malkin is chairman and chief executive of the trust.â€
BATISTA’S OIL FIRM DEFAULTS  |Â
The Brazilian petroleum exploration and production company OGX was pushed closer to bankruptcy after it announced on Tuesday that it would default on a $44.5 million interest payment, Dan Horch reports in DealBook. The decline of the firm, founded by the entrepreneur Eike Batista, reflects its founder’s struggles.
Luana Helsinger, a petroleum analyst with Grupo Bursátil Mexicano in Rio de Janeiro, said “the logical next step is for OGX to request a court-supervised reorganization.†The company has a 30-day grace period to negotiate with creditors, which include the bond giant Pimco. Should a bankruptcy occur, it would be the largest corporate default in Latin America’s history, Mr. Horch reports.
ON THE AGENDA  | In addition to Empire State Realty Trust, Re/Max Holdings is expected to begin trading, after raising $220 million in an I.P.O. Shares of Burlington Stores are also making their trading debut. David M. Rubenstein, the Carlyle Group co-founder, is featured at the Titans of Industry gathering in New York, which is closed to the press. Steven Mandis, author of the new book “What Happened to Goldman Sachs,†is on CNBC at 6:40 a.m.
A LACK OF CONTROL AT J.C. PENNEY  | “The latest events at J.C. Penney provide a hard lesson: With today’s public company, it is sometimes difficult to be sure who is in control,†Steven M. Davidoff writes in the Deal Professor column. One example of the issue is the messy way that the struggling retailer raised capital last week, abruptly reversing course after the chief executive said, according to news reports, he didn’t see “conditions for the rest of the year that would warrant raising liquidity.†(The company denies that he made the comments.)
“In the old days, identifying the person in charge was easy,†Mr. Davidoff writes. “Today, the board is increasingly prominent, and chief executives serve at the whim of a sometimes fractious board. Shareholders are also increasingly active, willing to struggle with a board over company strategy and direction. And advisers are always circling, willing to charge fat fees to help, and in doing so, they end up driving the bus.â€
Tesco to Pay $550 Million in Supermarket Deal in China  | The deal will give the British supermarket chain Tesco 20 percent of a new joint venture with China Resources Enterprise, which will have more than 3,000 outlets in China and Hong Kong. DealBook »
Microsoft Investors Said to Push for Gates to Step Down  | Reuters reports: “Three of the top 20 investors in Microsoft Corp. are lobbying the board to press for Bill Gates to step down as chairman of the software company he co-founded 38 years ago, according to people familiar with matter.†REUTERS
Cargill Said to Approach Deal for A.D.M. Unit  | The giant trading firm Cargill “is in the final stages of a deal†to buy Archer Daniels Midland’s cocoa business, Reuters reports, citing unidentified people familiar with the situation. REUTERS
Portugal Telecom to Merge With Oi of Brazil  | Shares of Portugal Telecom jumped more than 15 percent after the announcement that it would merge with the Brazilian telecommunications giant Oi, of which it is the biggest shareholder, Reuters reports. REUTERS
BlackBerry Reveals Its Slide Is Global  | BlackBerry said in a regulatory filing on Tuesday evening that customers were turning away from its products in the developing world, which previously had been its one remaining bright spot. NEW YORK TIMES
Qatar Fund Buys Stake in Local Exchange  | Qatar Holding, an arm of the country’s sovereign wealth fund, bought a 12 percent stake in Qatar Exchange from NYSE Euronext. BLOOMBERG NEWS
New Owner for Harlem Globetrotters  | Herschend Family Entertainment, a private group that operates Dolly Parton’s Dollywood theme parks, agreed to buy the basketball troupe from the private equity firm Shamrock Capital Advisors. Terms of the deal were not disclosed. DealBook »
British Banks Wary of Government Mortgage Program  | The Financial Times reports: “Some of Britain’s leading mortgage lenders have expressed misgivings about the government’s latest ‘Help to Buy’ initiative, leaving the state-backed banks Royal Bank of Scotland and Lloyds as the only pair to have endorsed the scheme.†FINANCIAL TIMES
Dividing Up the Job of Legal Counsel  | Goldman Sachs and JPMorgan Chase have figured out that allowing the general counsel to also run regulatory compliance invites trouble, Reynolds Holding of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
New Head of R.B.S. Plans to Emphasize Retail Business  | In his first day as chief executive, Ross McEwan said he wanted the Royal Bank of Scotland to win back the trust of its customers. DealBook »
Barclays Head of Customer Service Resigns  |Â
REUTERS
Bank of America Names Sole Head of Asia-Pacific Investment Bank  |Â
REUTERS
Buyout Talks Over MoneyGram Are Said to End  | MoneyGram International plans to remain a public company after it was not satisfied with talks with private equity firms over a leveraged buyout, Reuters reports, citing three unidentified people familiar with the matter. REUTERS
Icahn Reviews Dinner on Twitter  | In fewer than 140 characters, the hedge fund billionaire Carl C. Icahn said he “pushed hard†for Apple to do a $150 billion buyback during a “cordial dinner†with Timothy D. Cook, the chief executive of Apple. DealBook »
A Step Toward ‘Peer to Peer’ Lending Securitization  | A New York hedge fund has taken some of its Lending Club loans and sold them in a $53 million securitization. Are more such deals likely to be on the horizon? DealBook »
Twitter Said to Add Banks to I.P.O. Â |Â Twitter added the boutique investment banks Allen & Company and Code Advisors to the group of underwriters handling its initial public offering, Bloomberg News reports, citing unidentified people with knowledge of the process. BLOOMBERG NEWS
Re/Max Holdings Raises $220 Million in I.P.O. Â |Â The real estate brokerage firm priced its initial public offering at $22 a share, above its expected range. BLOOMBERG NEWS
SAP Ventures Raises $650 Million Fund  | SAP Ventures plans to use the money for direct investments in industries including mobile and social networking as well as more enterprise-related sectors like Big Data. DealBook »
Quantopian Raises $6.7 Million to Help Traders Make Algorithms  | Quantopian, whose platform allows so-called quants to create trading algorithms based on unconventional data sets, announced on Wednesday that it had raised a financing round from Khosla Ventures and Spark Capital. QUANTOPIAN
Spain Is Expected to Extradite Former JPMorgan Trader  | The former trader, Javier Martin-Artajo, appears to be fighting extradition, but Spanish authorities are expected to cooperate with the request, a senior prosecutor said. DealBook »
Insider Trading Trial of Mavericks’ Owner Is Under Way  | Oral arguments began Tuesday in the insider trading case against Mark Cuban. DealBook »
Former Employees Claim Sexual Harassment at Women’s Networking Group  | Four female plaintiffs say in their complaint that a former manager, also a woman, regularly harassed them and, when they complained, they were fired or forced to resign. DealBook »
Fabrice Tourre Seeks a New Trial  | The former Goldman Sachs trader Fabrice Tourre, who was found liable on six counts of civil securities fraud after being accused of misleading investors about a trade he helped structure, contends that there was a lack of evidence to support the jury’s decision on some counts and that evidence was not presented in other instances. DealBook »
Tribes Lose Battle to Shield Payday Sites From New York State Crackdown  | New York State had clamped down on the tribes’ payday lending sites, arguing that their business was carried out beyond the reservations. A federal judge agreed. DealBook »
