The Securities and Exchange Commission sued ICP Asset Management and
its founder, Thomas Piore, alleging that they defrauded clients in
pooled mortgages known as the Triaxx series, totaling $11 billion,
including deals that were insured by American International Group,
the Wall Street Journal reported. AIG and Financial Guaranty Insurance provided insurance on the mortgages, known as collateralized debt

obligations, or CDOs, and had to sign off on any new securities
purchases, according to the SEC. The federal government bailed out AIG
in September 2008 in part because of souring CDOs that the firm had

insured. The SEC is also alleging that as
the credit markets were deteriorating in 2007 and 2008, Priore caused
the Triaxx CDO holders to buy bonds at inflated prices to benefit ICP
or another CDO under distress. The lawsuit, which was filed in federal
court in Manhattan, is the SEC’s first allegation since the credit
crisis that an asset manager overseeing CDOs mismanaged the accounts. [WSJ]

[more]

Lower Manhattan, the country’s best-performing office market, is struggling to hang on to its title as vacancies mount. Though the Financial District fared relatively well during the commercial property slide, demand is no longer keeping up with increasing inventory. Goldman Sachs, American International Group and Bank of America are among the major tenants relocating, which follows the flight of firms like Lehman Brothers after Sept. 11, 2001. Goldman Sachs is moving to its new West Street building and vacating 2 million square feet offices including 85 Broad Street and 1 New York Plaza. AIG last year sold its 70 Pine Street and 72 Wall Street headquarters. Bank of America, meanwhile, is moving its employees into a new Midtown tower at One Bryant Park, and it remains to be seen what will happen to the World Financial Center offices of Merrill Lynch, which it acquired last year. Cushman & Wakefield expects Lower Manhattan’s vacancy rate to hit 14 percent by late next year — the highest since 1997 — and the 4.4 million square feet of office space planned for the two new towers going up at the World Trade Center isn’t helping that metric. “The amount of space that’s potentially going to come to the market will increase availabilities and put pressure on pricing,” said Kenneth McCarthy, who heads New York-area research for Cushman & Wakefield. [Bloomberg]

Youngwoo & Associates and Kumho Investment Bank have agreed to purchase two buildings owned by American International Group, the 70 Pine Street headquarters, which could receive a landmark designation, and adjacent 72 Wall Street. The two Financial District buildings have a combined 1.4 million square feet of rentable space. The sale went into contract last week, according to a press release from CB Richard Ellis, which arranged the sale. The sale price was not disclosed. TRD [more]

American International Group sold a New Jersey Class A office tower it
acquired in a foreclosure proceeding to a new opportunistic partnership
based in Paramus. KABR Real Estate Investment Partners, formed in 2009, bought the
entirely vacant 235,000-square-foot office building at 85 Challenger
Road in Ridgefield Park. The price was not disclosed, but it was an all-cash deal on the
building which did not have a mortgage, said Laurence Rappaport, CEO of
KABR. “We feel we got a very good deal,” he said. His company was one of 17 bidders on the property, he said. The sale was brokered by Cushman & Wakefield’s Metropolitan Area Capital Markets Group, KABR said. KABR does not yet have a tenant for the building. This is the second
purchase the partnership has made. Earlier this year it bought three
multi-family apartment buildings in the Bronx with a partner, Rappaport
said. [more]