Argentine Technology Firms Plans I.P.O. on N.Y.S.E.

SÃO PAULO, Brazil - Globant, an Argentine software and information technology services company, has filed to go public on the New York Stock Exchange, in a move to broaden its reach.

In a filing late Tuesday night with the Securities and Exchange Commission, the firm said it sought to raise $86.25 million, although that amount is just a placeholder for registration purposes. The lead underwriters listed are JPMorgan Chase, Citigroup, Credit Suisse, William Blair and Loyal3 Securities.

The company’s investors include the New York-based private equity fund Riverwood Capital, FTVentures, the British advertising giant WPP and Endeavor Global, a New York-based nonprofit organization that seeks to foster entrepreneurship in developing countries.

Globant would be the first technology company from Argentina to be listed on the N.Y.S.E., according to a spokeswoman at the exchange. The Big Board has 80 companies from Latin America listed, 14 from Argentina.

Globant, though now incorporated in Luxembourg, was founded in 2003 in Buenos Aires, where it maintains its principal operating subsidiary. More than 2,200 of its 2,867 employees in Argentina, according to the filing.

The four founders, who studied engineering at Argentine public universities, initially formed the company to tap into the lucrative offshoring sector that India was dominating at the time. Argentina’s economy had collapsed in 2001 in the world’s largest sovereign default, and a resulting sharp devaluation in 2002 made the country competitive and stimulated exports.

The company has focused on developing software for the gaming, mobile and cloud computing sectors, and has tried to blend the approach of an advertising agency, one of Argentina’s strengths, with computer programming.

Clients include Google, LinkedIn, Orbitz and Coca-Cola. North American clients accounted for 82.1 percent of its revenue in the first half of this year. In that period, it had $71.7 million in revenue, up from $56.9 million during the first half of 2012.

In the first half of 2013, Globant posted a net profit of $8.0 million, recovering from a loss of $5.1 million
in the same period last year.

Risks detailed in the filing include an increased employee attrition rate, as well as Argentina’s deteriorating macroeconomic picture.

Globant’s founders have challenged the old way of doing business in the country, where family wealth and political connections often dictated who started companies.

They have also done something atypical in Argentina - acquired smaller companies as part of their business growth plans. During the 1990s, when the Argentine peso was pegged to the dollar, companies often sold themselves to foreigners, rather than leverage the currency advantage and expand throughout Latin America.

Globant’s founders have sought to do the opposite. In a 2008 New York Times article, Alejandro Mashad, then managing director of Endeavor Argentina, said that, “Globant’s four founders could sell their company today and each have a private jet, but they want to build a company in Argentina.”

In N.Y. Mayoral Race, Small Checks From Hedge Fund Giants

Hedge fund titans are making a $170,336 bet that Christine C. Quinn is the best candidate to run New York.

Ms. Quinn, a Democrat and the City Council speaker, has received that amount in donations from the hedge fund industry. Paltry though the sum seems, it is more than twice the amount received by the next closest recipient in the mayoral race, Joseph J. Lhota, a Republican, according to records compiled by the public affairs lobbying organization Common Cause.

Political contributions to the 2013 mayoral candidates are minuscule in comparison to the sums they invest in financial markets, largely because New York law caps individual contributions to mayoral candidates at $4,950. The New York Campaign Finance Board records for 2013 are notable for their paucity of political contributions from hedge fund managers. Some of the industry’s biggest personalities are missing from the donors’ list altogether, while a few have donated amounts as small as $100.

The loudest and boldest of hedge funds have been the quietest in this election.

Consider William A. Ackman of Pershing Square Capital Management, who resigned from the board of J. C. Penney two weeks ago after a brawl with other board members and just sold his entire stake in the company. Mr. Ackman is a dominant figure in financial headlines and has made a public bet against Herbalife, the nutritional supplement company that he contends is a pyramid scheme.

Mr. Ackman has made no donations to any current mayoral candidate, and he declined to comment.

James S. Chanos, founder of Kynikos Associates, and John Paulson of Paulson & Company, have also not yet donated and declined to comment on whether they planned to make any contributions.

George Soros, chairman of Soros Fund Management, publicly announced his support for the Democrat Bill de Blasio several weeks ago. While there is no record of a campaign contribution, a spokesman said Mr. Soros had donated $2,000 to Mr. de Blasio’s campaign and “will give again” for an expected runoff after the primaries.

The top campaign givers, on the other hand, have thrown all their resources into backing Democratic candidates.

Orin S. Kramer, the founder of Boston Provident, tops this list, having given $10,700 of his own money to three of the party’s candidates: Ms. Quinn, William C. Thompson Jr. and John C. Liu. Mr. Kramer, who raised more than $2 million for President Obama during the 2012 presidential election, has donated $4,950 each to Ms. Quinn and Mr. Thompson and $800 to Mr. Liu, who is the New York comptroller.

This month, the city’s Campaign Finance Board voted to withhold up to $3.5 million in matching public money to Mr. Liu’s political campaign, citing his ”campaign’s inability to demonstrate it is in compliance with the law” after two of his former associates were convicted of participating in an illegal fund-raising scheme.

Mr. Kramer has also made contributions to candidates running for other offices in the election.

John Petry of Sessa Capital has donated $15,425. He has backed Ms. Quinn and Anthony Weiner, before the latest revelations about Mr. Weiner’s habit of sending sexual photographs and messages to women online. In July, Mr. Petry donated $1,000 each to Ms. Quinn and to Mr. Weiner. He later contributed an additional $1,500 to Mr. Weiner’s campaign. The rest of his contributions went to candidates running for the City Council, public advocate and borough president.

Among the donors to Republican candidates is Carl C. Icahn.

An activist investor, Mr. Icahn announced this month that he had accumulated a large stake in Apple and urged its chief executive to return more money to investors through a larger share buyback. He has made a donation of the maximum $4,950 to Mr. Lhota, who has received a total of $47,625 from hedge funds.

The normally outspoken Mr. Icahn could not be reached to comment about his donation.

Daniel S. Loeb of Third Point Capital, once a strong supporter of President Obama who supported Mitt Romney in last year’s presidential election, has donated $2,475 to Ms. Quinn’s campaign. He also donated $4,500 to the Democrat Scott M. Stringer’s campaign for New York comptroller.

Total industry contributions so far have added up to $500,000. This number stands in stark contrast to the amounts hedge funds commit to New York State elections: $7.1 million in 2010, when Andrew Cuomo was elected governor, for example. Hedge funds are now the second-biggest contributors to state campaigns after the real estate industry, according to a 2012 report by Common Cause.

“People who are donating with large money at the state level are stymied at the local level,” said Susan Lerner, the director of the New York branch of Common Cause. This ensures small donors have a say, she added.

“When you think about what hedge fund managers are doing â€" they are a very elite and effective form of gambler and they are used to using their money to manipulate markets and reap outside benefits,” Ms. Lerner said.

Mr. Chanos responded by challenging Ms. Lerner to try to reap outsize benefits. “It’s a pretty tough game,” he said.

“The limits are a big aspect to it, and I think people would give more if the limits were higher,” he said. “At the federal and state level, we are constantly being called” about donations, he said. No one calls for contributions at the city level, he added.

“It’s hard to think how any hedge fund would directly benefit from city politics,” Mr. Chanos said.

Ackman Should Stick With Heavy Industry

Industrialist Bill Ackman is more persuasive than shopkeeper Bill Ackman.

The activist investor’s exit this week from a disastrous investment in J.C. Penney underscores that retailing just isn’t his thing. A big bet on the $22 billion Air Products and Chemicals represents a second foray into heavier production for Mr. Ackman, the founder of Pershing Square Capital Management, after Canadian Pacific. As at the railway, better management could go a long way at the gas producer.

Not much has gone well for Air Products since John McGlade became chief executive in October 2007. Though it has kept pace with some competitors on an operating basis, its shares declined by 4 percent between then and when Mr. Ackman started accumulating his 9.8 percent stake in late May. Those of each of its four closest peers were up by at least 38 percent during the same period. Airgas’s doubled. A badly botched attempt to buy that smaller rival cost Air Products $150 million and more than a year’s worth of management distraction.

Between 2008 and 2012, Air Products invested $6 billion to build, buy or upgrade plants and equipment. It has growth of earnings before interest and taxes of just 3 percent to show for it. Project delays restrained return on capital employed to 11.5 percent last year, compared with 14 percent for the industry leader, Praxair. A misguided focus on the lower-margin electronics sector also hurt.

The response by Mr. McGlade and his board has been to dig in, resisting shareholder efforts to put the entire board up for election at once and adopting a poison pill. If Mr. Ackman can break through, there may be plenty of upside. At Canadian Pacific, he won a proxy fight and installed a new chief executive and directors. The operating margin has climbed 4 percentage points and the share price has tripled since Mr. Ackman first invested in September 2011.

Air Products is expected by analysts to generate $11.6 billion of revenue by 2015. If it could match Praxair’s 23 percent E.B.I.T. margin and fetch a slightly higher multiple of earnings, it would translate into a 75 percent increase in the share price. Offload some businesses and acquire others - perhaps even Airgas - and there may be a path to a doubling.

A lot has to go right, though. Mr. Ackman will probably first need to win another proxy battle. His chosen chief executive would then have to make big changes at Air Products. At least industrial gas is an oligopoly selling substances essential to certain industries. That should mean that despite the combustible nature of the product, even if Mr. Ackman fails, the investment won’t blow up in his face.

Christopher Swann is a columnist and Jeffrey Goldfarb is an assistant editor at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Switzerland Close to Tax Deal With U.S.

Switzerland and the United States are close to announcing an agreement to end their long dispute over how to punish banks that helped Americans evade taxes, Swiss banking and government officials said Wednesday.

“There is a deal,” said Anne Césard, a spokeswoman in Bern for the Swiss Federal Finance Department, though the precise terms are to remain secret until a joint statement is issued by the two governments.
“I’d say it would be a matter of days,” she added.

A person briefed on the matter said that the American and Swiss sides had been trading working papers on the issue for many months and that a final settlement would likely require individual banks to pay a fine to the United States equivalent to 20 percent to 50 percent of the value of their undeclared American accounts.

One Swiss bank, Zurich Cantonal Bank, said Wednesday that the impending settlement covered only those Swiss banks not currently under formal investigation by the United States authorities.

The dozen or so Swiss banks, including Zurich Cantonal, that are already under investigation by the United States authorities are cooperating directly with the Justice Department, Igor Moser, a bank spokesman, said in a statement by e-mail. He added that his bank welcomed the agreement “because it is a precondition for Zurich Cantonal Bank to enter into negotiations” for a deferred prosecution agreement with the United States. The American authorities have said that banks under criminal scrutiny must negotiate their own resolutions independent of any global settlement for the Swiss banking industry.

“The banks are backing the program,” said Sindy Schmiegel Werner, a spokeswoman in Basel for the Swiss Bankers’ Association. “It’s a painful thing,” she said, “but it’s the most acceptable solution among a number of unacceptable solutions.”

Switzerland, home to accounts with more than $2 trillion in overseas deposits, has been locked in thorny negotiations with Washington since 2009, when UBS, the largest Swiss bank, agreed to pay a $780 million fine and to hand over information on 4,450 accounts to resolve accusations that it helped wealthy American clients avoid taxes.

When the Swiss balked at United States demands for information from additional banks, Washington loaded on the pressure by starting criminal investigations into about a dozen more institutions, including Credit Suisse and Julius Baer. In February 2012, the United States sent an unmistakable message about its determination by indicting Wegelin & Company, the oldest Swiss bank, putting it out of business.

A previous attempt by the Swiss government to arrange a deal failed in June, when Parliament balked amid concerns about privacy and complaints that the agreement was being negotiated in secret. But legislators then called on Eveline Widmer-Schlumpf, the Swiss finance minister and president of the Federal Council, the panel that serves as the Swiss collective head of state, to work out an executive-level agreement with Washington.

On Wednesday, the Federal Council said in a statement that it had “instructed the Federal Department of Finance to conclude the corresponding work.”

“The signing of the joint statement should enable Swiss banks to resolve the tax dispute with the United States within the scope of existing legislation,” it added. “The dispute has put a strain on relations between the two countries in the past.”

A Swiss official source said that despite the order by the Federal Council to the Federal Department of Finance to craft a final agreement, “negotiations are still ongoing.” The source said that the Swiss side was “still working on wording” and added that “it doesn’t mean they’re ready to sign it now.”
Jack Blum, a Washington lawyer and offshore expert, said that “the devil is in the details, and those details remain to be seen.”

The United States has heaped increasing legal pressure on Switzerland in past years, indicting dozens of Swiss bankers, lawyers and advisers over their roles in aiding offshore tax evasion by wealthy Americans. “The pressure on the Swiss has been extreme, and they’re looking for anything they can do,” Mr. Blum said.

Ms. Schmiegel said that under the proposed agreement, the council would grant Swiss lenders the “exceptional permission” to give Washington the information it desires on bank employees, accounts and business activities.

Requests for client information would still be handled through the “administrative assistance” provision of the double-taxation treaty between the two countries. The revised treaty has been ratified by the Swiss Parliament but has been on hold in Washington, where Senator Rand Paul, Republican of Kentucky, has argued that it would give the Internal Revenue Service too much power and violate Americans’ right to privacy.

The I.R.S. and Department of Justice did not immediately respond to requests for comment.

A deal would not mark an end for Swiss banking secrecy because it would affect only the accounts of Americans, but it does represent continuing erosion of the once-ironclad Swiss guarantee that banking data were sacrosanct.

Switzerland is working separately on a tax deal with the European Union, of which it is not a member, and it has agreed to cooperate with the United States on the Foreign Account Tax Compliance Act, a wide-reaching United States initiative to find American assets hidden overseas.

Switzerland Close to Tax Deal With U.S.

Switzerland and the United States are close to announcing an agreement to end their long dispute over how to punish banks that helped Americans evade taxes, Swiss banking and government officials said Wednesday.

“There is a deal,” said Anne Césard, a spokeswoman in Bern for the Swiss Federal Finance Department, though the precise terms are to remain secret until a joint statement is issued by the two governments.
“I’d say it would be a matter of days,” she added.

A person briefed on the matter said that the American and Swiss sides had been trading working papers on the issue for many months and that a final settlement would likely require individual banks to pay a fine to the United States equivalent to 20 percent to 50 percent of the value of their undeclared American accounts.

One Swiss bank, Zurich Cantonal Bank, said Wednesday that the impending settlement covered only those Swiss banks not currently under formal investigation by the United States authorities.

The dozen or so Swiss banks, including Zurich Cantonal, that are already under investigation by the United States authorities are cooperating directly with the Justice Department, Igor Moser, a bank spokesman, said in a statement by e-mail. He added that his bank welcomed the agreement “because it is a precondition for Zurich Cantonal Bank to enter into negotiations” for a deferred prosecution agreement with the United States. The American authorities have said that banks under criminal scrutiny must negotiate their own resolutions independent of any global settlement for the Swiss banking industry.

“The banks are backing the program,” said Sindy Schmiegel Werner, a spokeswoman in Basel for the Swiss Bankers’ Association. “It’s a painful thing,” she said, “but it’s the most acceptable solution among a number of unacceptable solutions.”

Switzerland, home to accounts with more than $2 trillion in overseas deposits, has been locked in thorny negotiations with Washington since 2009, when UBS, the largest Swiss bank, agreed to pay a $780 million fine and to hand over information on 4,450 accounts to resolve accusations that it helped wealthy American clients avoid taxes.

When the Swiss balked at United States demands for information from additional banks, Washington loaded on the pressure by starting criminal investigations into about a dozen more institutions, including Credit Suisse and Julius Baer. In February 2012, the United States sent an unmistakable message about its determination by indicting Wegelin & Company, the oldest Swiss bank, putting it out of business.

A previous attempt by the Swiss government to arrange a deal failed in June, when Parliament balked amid concerns about privacy and complaints that the agreement was being negotiated in secret. But legislators then called on Eveline Widmer-Schlumpf, the Swiss finance minister and president of the Federal Council, the panel that serves as the Swiss collective head of state, to work out an executive-level agreement with Washington.

On Wednesday, the Federal Council said in a statement that it had “instructed the Federal Department of Finance to conclude the corresponding work.”

“The signing of the joint statement should enable Swiss banks to resolve the tax dispute with the United States within the scope of existing legislation,” it added. “The dispute has put a strain on relations between the two countries in the past.”

A Swiss official source said that despite the order by the Federal Council to the Federal Department of Finance to craft a final agreement, “negotiations are still ongoing.” The source said that the Swiss side was “still working on wording” and added that “it doesn’t mean they’re ready to sign it now.”
Jack Blum, a Washington lawyer and offshore expert, said that “the devil is in the details, and those details remain to be seen.”

The United States has heaped increasing legal pressure on Switzerland in past years, indicting dozens of Swiss bankers, lawyers and advisers over their roles in aiding offshore tax evasion by wealthy Americans. “The pressure on the Swiss has been extreme, and they’re looking for anything they can do,” Mr. Blum said.

Ms. Schmiegel said that under the proposed agreement, the council would grant Swiss lenders the “exceptional permission” to give Washington the information it desires on bank employees, accounts and business activities.

Requests for client information would still be handled through the “administrative assistance” provision of the double-taxation treaty between the two countries. The revised treaty has been ratified by the Swiss Parliament but has been on hold in Washington, where Senator Rand Paul, Republican of Kentucky, has argued that it would give the Internal Revenue Service too much power and violate Americans’ right to privacy.

The I.R.S. and Department of Justice did not immediately respond to requests for comment.

A deal would not mark an end for Swiss banking secrecy because it would affect only the accounts of Americans, but it does represent continuing erosion of the once-ironclad Swiss guarantee that banking data were sacrosanct.

Switzerland is working separately on a tax deal with the European Union, of which it is not a member, and it has agreed to cooperate with the United States on the Foreign Account Tax Compliance Act, a wide-reaching United States initiative to find American assets hidden overseas.

Britain Orders Ryanair to Slash Stake in Aer Lingus

PARIS â€" British regulators on Wednesday ordered Ryanair to slash its 29 percent stake in Aer Lingus to 5 percent, arguing that the holding gives Ryanair too much influence over the strategy of the struggling Irish flag carrier and threatens competition on routes between Ireland and Britain.

In the final ruling, which reaffirms its initial finding published in May, Britain’s Competition Commission rejects a number of proposed remedies offered by Ryainair, including a vow last month by the airline’s chief executive, Michael O’Leary, to sell, without conditions, its entire Aer Lingus stake to any European company that made a successful bid for more than half of the airline.

“We recognize that Ryanair and Aer Lingus compete intensely for passengers traveling between Great Britain and Ireland, to the benefit of millions of passengers crossing the Irish Sea each year,” Simon Polito, the commission’s deputy chairman who led the inquiry, said in a statement. “However, we consider that there is a tension between Ryanair’s position as a competitor and its position as Aer Lingus’s largest shareholder, and that Ryanair has an incentive to weaken its rival’s effectiveness as a competitor.”

Aer Lingus welcomed the commission’s finding, which was widely expected. Ryanair, meanwhile, immediately rejected it as “bizarre and manifestly wrong” and said it would challenge the order before Britain’s Competition Appeal Tribunal, a process that could drag on for several months if not years.

Regulators will not be able to compel any divestment by Ryanair until after the company has exhausted its appeals.

Ryanair, Europe’s largest airline by number of passengers, has made three unsolicited offers in the past seven years for Aer Lingus, which is also 25 percent owned by the Irish government. Dublin has repeatedly expressed its interest in selling its shares, but has held off in the fear that they could be snapped up by Ryanair. Ryanair and Aer Lingus already control 70 percent of Irish air traffic, and the Irish government says a combination would leave Ireland too dependent on one operator for vital air links abroad.

The European Commission blocked Ryanair’s latest bid for Aer Lingus, worth nearly 700 million euros, or about $940 million, in February after a six-month review. European regulators found that concessions and remedies proposed by Ryanair, which included offers to sell dozens of routes between Ireland, Britain and Continental Europe, did not go far enough to allay antitrust concerns.

Ryanair has long coveted Aer Lingus because of its valuable takeoff and landing slots at airports like London Heathrow. It is that major presence at Heathrow that British regulators say gives them jurisdiction over the matter.

Alec Burnside, a lawyer in Brussels at Cadwalader, Wickersham & Taft, which represents Aer Lingus, said the British intervention in the case highlighted the limitations of European Union law, which gives Brussels the power to rule only on the impact of mergers on consumers. British regulators, meanwhile, are authorized to study the effect on competition of large minority shareholdings.

“The European Commission needs jurisdiction to scrutinize and protect businesses from anti-competitive minority shareholder situations like this one,” Mr. Burnside said.

In its statement, the Competition Commission acknowledged the measures that Ryanair had proposed to address its concerns. But “in a dynamic and uncertain sector such as the airline industry,” it said, “it is inherently difficult to design remedies that would cater for all eventualities.”

In its ruling, the commission said the eventual divestment of Ryanair’s stake should be handled through a trustee, which would leave Aer Lingus “free to take actions to maintain and strengthen its competitive position in the future for the benefit of passengers on routes between Great Britain and Ireland.”

Morning Agenda: A Record Payout in Bias Case

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.”

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.”

ON THE AGENDA  | 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.”

“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.”

Mergers & Acquisitions »

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  | 
WALL STREET JOURNAL

INVESTMENT BANKING »

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 »

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

HEDGE FUNDS »

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 »

I.P.O./OFFERINGS »

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

VENTURE CAPITAL »

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

LEGAL/REGULATORY »

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

Morning Agenda: A Record Payout in Bias Case

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.”

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.”

ON THE AGENDA  | 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.”

“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.”

Mergers & Acquisitions »

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  | 
WALL STREET JOURNAL

INVESTMENT BANKING »

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 »

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

HEDGE FUNDS »

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 »

I.P.O./OFFERINGS »

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

VENTURE CAPITAL »

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

LEGAL/REGULATORY »

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

Private Equity Said to Be Out of Running for Hong Kong Supermarket Chain

HONG KONG â€" A number of private equity groups have been knocked out of the running to acquire ParknShop, the Hong Kong supermarket chain owned by the billionaire Li Ka-shing that is considering selling itself in a deal that could command between $3 billion and $4 billion, according to people with knowledge of the matter.

Kohlberg Kravis Roberts and TPG Capital are among the private equity investors that are no longer in the bidding, two people with knowledge of the matter said on Wednesday, asking not to be identified because the information was not public. The handful of bidders remaining are all retailers and include state-owned China Resources Enterprise and AEON Group of Japan, one of the people said.

“It remains to be seen how competitive this auction really is, but private equity does not really see value at the kind of levels they are talking about,’’ said one person close to a private equity group that had submitted a bid. ‘‘If you are a strategic investor and you can make any synergies with your existing business in Hong Kong or China, then maybe it makes more sense.’’

Mr. Li is the richest person in Asia, and ParknShop, part of his conglomerate Hutchison Whampoa, is one of two dominant supermarket operators in Hong Kong, with a market share of 35.4 percent last year, according to figures from Euromonitor International.

The Wellcome supermarket chain, owned by Singapore-listed Dairy Farm International, a unit of the rival Asian conglomerate Jardine Matheson, controls 41.4 percent of the market, according to Euromonitor. CR Vanguard, a supermarket chain owned by China Resources, has a 7.8 percent share.

The high concentration of market share among a small number of competitors is a characteristic found in many areas of Hong Kong’s small but lucrative domestic economy. But unlike the situation in mainland China, where the supermarket sector is a fast-growing and highly fragmented business, the sector in Hong Kong is considerably saturated and sales growth has slowed in recent years, according to analysts.

Total supermarket sales in Hong Kong rose to 24.1 billion Hong Kong dollars, or $3.1 billion, in the first half of the year, up 7.2 percent from the same period a year earlier. That was slower than the 10.3 percent sales growth in 2012, and 12.4 percent in 2011, according to government figures.

At the same time, the retailers in Hong Kong have been forced to grapple with rising costs. Retail rents have doubled in the past 10 years, according to official statistics.

Early this year, Hong Kong raised its minimum wage to 30 dollars, up from the 28 dollars it had been set at since it was first introduced two years ago.

News that K.K.R. and TPG were no longer in the running for ParknShop was reported earlier on Wednesday by Reuters.

Hutchison had announced on July 20 that it had started a strategic review of the supermarket business to ‘‘optimize value for shareholders.’’ But it emphasized that ‘‘there can be no assurances that the process will result in any transaction being announced or completed.’’