JPMorgan Kicks Off Bank Earnings

JPMORGAN EARNINGS SHOW STRENGTH  |  JPMorgan Chase said on Friday that its first-quarter profit rose 33 percent to $6.5 billion, supported by strength in the investment banking business and a surge in mortgage lending. The report, which kicked off bank earnings season, showed net earnings of $1.59 a share, exceeding analysts expectations of $5.41 billion, or $1.40 a share. Revenue was $25.8 billion, compared with $26.8 billion a year earlier.

“All our businesses had strong performance, and our client franchises did exceptionally well,” Jamie Dimon, the bank's chief executive, said in a statement. The bank has recorded 12 consecutive quarters of profit.

Shareholders are deciding whether to vote to strip Mr. Dimon of his chairman title, and board members have been working to persuade some big investors that Mr. Dimon should keep both roles. On Thursday, the analyst Richard Bove said on CNBC that anything short of a “blowout” earnings report from JPMorgan could create “uncertainty” for Mr. Dimon going into the shareholder meeting next month.

EX-KPMG PARTNER CHARGED WITH INSIDER TRADING  |  Prosecutors filed criminal charges on Thursday against Scott I. London, who was a senior executive at the accounting giant KPMG, revealing a two-year insider trading scheme. Mr. London's friend, Bryan Shaw, a jeweler in the Los Angeles area, who offered gifts in exchange for secret information about KPMG's clients, was not criminally charged but was named in a related civil action by the Securities and Exchange Commission. Both men have publicly confessed to their misdeeds.

“As a leader at a major accounting firm, London's conduct was an egregious violation of his ethical and professional duties,” said Michele Wein Layne, director of the S.E.C.'s Los Angeles office. DealBook's Peter Lattman writes: “Early this year, Mr. Shaw turned against Mr. London after investigators confronted him with evidence of insider trading. He became a government informant, recording telephone conversations and in-person meetings to help the authorities build a case against Mr. London.”

In a plot twist, the scandal involved Herbalife, a company that already has provided a stock market drama, Floyd Norris, a columnist for The New York Times, writes. Through no fault of its own, Herbalife “could become a catalyst for change in the auditing profession.” Mr. London leaked confidential information about Herbalife to Mr. Shaw, and the two discussed a strategy for concealing illegal trades.

BENCKISER'S $9.8 BILLION COFFEE DEAL  |  The German conglomerate Joh. A. Benckiser agreed on Friday to pay 7.5 billion euros, or $9.8 billion, for D.E Master Blenders 1753, a European coffee company. The bid of 12.50 euros per share is less than 12.75-a-share price that was disclosed when the companies said they were in talks last month, but it is a 36 percent premium to the coffee maker's average share price for the three months before that announcement. The deal is the latest, and largest, coffee takeover for Benckiser, which last year announced deals for Peet's Coffee & Tea and the Carib ou Coffee Company.

WINKLEVOSS TWINS BET ON BITCOINS  |  Known for their legal spat with Mark Zuckerberg over Facebook, Cameron and Tyler Winklevoss now see potential in another emerging technology: bitcoins. The brothers, Olympic rowers whose story was dramatized in the movie “The Social Network,” have amassed “what appears to be one of the single largest portfolios of the digital money, whose wild gyrations have Silicon Valley and Wall Street talking,” Nathaniel Popper and Peter Lattman report in DealBook.

The twins say they own nearly $11 million worth of bitcoins, based on the price Thursday morning when the entire market was worth $1.3 billion. The digital money has been extremely volatile, with the price plummeting 60 percent at one point. “To skeptics, the frenzy over the bitcoin network created by anonymous programmers in 2009 looks more like the mania for Dutch tulip bulbs in the 1600s than the beginnings of an actual currency.” Still, “bitcoin has become the financial phenomenon of the moment,” with a group of venture capitalists announcing on Thursday that they were financing a bitcoin-related company.

“People say it's a Ponzi scheme, it's a bubble,” said Cameron Winklevoss. “People really don't want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.' We're in the early days.”

ON THE AGENDA  |  Wells Fargo reports earnings before the market opens. Marianne Lake, JPMorgan Chase's chief financial officer, is on CNBC at 11:15 a.m. Timothy Sloan, the chief financial officer of Wells Fargo, is on CNBC at 3:10 p.m. and on Bloomberg TV at 4:05 p.m. Senator Carl Levin is on Bloomberg TV at 9 p.m. Data on retail sales for March is out at 8:30 a.m. The Thomson Reuters/University of Michigan consumer sentiment index for April is released at 9:55 a.m.

PAULSON'S INVESTMENT PITCH: LOWER TAXES  |  John A. Paulson was reported to have pondered a move to Puerto Rico for tax relief. But while the billionaire hedge fund manager won't be relocating, he is now offering clients the chance to lower their tax bill, pitching a new fund for investors “looking to mitigate income taxes,” according to The Wall Street Journal. Mr. Paulson plans to discuss the new opportunity, the Paulson Partners Premium LP Fund, at an event on April 24, Bloomberg News reports.

Mergers & Acquisitions '

In Push for Gender Equality, Breaking Down the Boardroom Door  |  Concluding that “there was no demand for women” on corporate boards, Beth Stewart decided to start a business called Trewstar whose goal is to find them.
DealBook '

PC Sales Data May Bolster Case for Taking Dell Private  |  A new report by the International Data Corporation that details a steep drop in global PC sales in the first quarter this year appears to bolster Dell's argument for going private.
DealBook '

LinkedIn Acquires Pulse, News-Reading Service  |  LinkedIn is paying about $90 million, 90 percent in stock and 10 percent in cash, for Pulse.
BLOOMBERG NEWS

Twitter Scoops Up Music Service  | 
WE ARE HUNTED

PayPal Buys Start-Up That Helps Products Go Viral  | 
BLOOMBERG NEWS

Telecom Italia Considers a Tie-Up with Hutchison  |  The board of Telecom Italia “gave the go-ahead Thursday for talks on a possible merger with the Italian mobile business of Hutchison Whampoa that could make the Chinese group the leading shareholder of Italy's largest telecommunications operator,” The Wall Street Journal writes.
WALL STREET JOURNAL

Sinclair to Buy Fisher Communications  |  The Sinclair Broadcast Group agreed on Thursday to buy Fisher Communications for about $373.3 million, allowing it to expand in Western markets like Seattle and Portland.
DealBook '

INVESTMENT BANKING '

Penney Said to Hire Blackstone to Help Raise Cash  |  J.C. Penney has hired the Blackstone Group to help it raise much-needed cash, a person briefed on the matter said on Thursday, as the embattled retailer tries a turnaround after replacing its chief executive.
DealBook '

Private Equity Firms Said to Circle Penney  |  “The flailing department-store chain has been approached by at least three major private-equity firms over the past month, all of which have expressed interest in taking a major stake in the troubled retailer,” according to The New York Post.
NEW YORK POST

Ackman Discusses Missteps at Penney  | 
REUTERS

Copper Supply Said to Be Concentrated at 2 Trading Firms  |  The Wall Street Journal reports: “Two major commodities-trading firms have amassed much of the world's copper supplies in their warehouses, partly by paying to divert shipments away from other storage hubs, traders and analysts say.”
WALL STREET JOURNAL

The Problem With Investment Banks, as Seen By a Bank  |  JPMorgan Chase's analysts say many of the world's largest investment banks are likely to offer investors paltry returns, and they call large banks like their own “un-investable.”
DealBook '

Citigroup's Washington Push  |  Citigroup's chief executive attended the ribbon-cutting at a new branch in the nation's capital, on K Street, home to the city's legions of lobbyists. The potential symbolism is hard to avoid, Daniel Indiviglio of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS

Citigroup Sells Turkish Consumer Unit as It Pares Global Operations  |  Citigroup agreed on Thursday to sell its consumer banking business in Turkey to the local lender DenizBank as it continues to reduce its operations outside of the United States.
DealBook '

PRIVATE EQUITY '

K.K.R. to Buy Control of Indian Tire Maker  |  K.K.R. agreed to buy a controlling stake in the Alliance Tire Group from Warburg Pincus, which invested in the Indian tire maker in 2007.
WALL STREET JOURNAL

How to Value Bausch & Lomb  |  Warburg Pincus bought the eye care company for $3.7 billion at the peak of the buyout boom and has been reportedly seeking a valuation of up to $10 billion. But a figure like $8 billion makes more sense, Robert Cyran of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS

HEDGE FUNDS '

Hedge Funds Drop Campaign Against T-Mobile's Bid for MetroPCS  |  Both Paulson & Company and P. Schoenfeld Asset Management indicated on Thursday that they would support the revised proposal by T-Mobile's parent, Deutsche Telekom.
DealBook '

Third Point Plans Fund Focused on Greece  |  Third Point's new Hellenic Recovery Fund plans to invest in Greek assets, building on earlier successes by the firm, which is run by Daniel S. Loeb, Bloomberg News reports.
BLOOMBERG NEWS

I.P.O./OFFERINGS '

Nasdaq Cuts Chief's Bonus Over Facebook I.P.O.  |  The board of the market operator Nasdaq OMX has cut the 2012 bonus of the company's chief executive, Robert Greifeld, by 62 percent, as a result of the botched Facebook initial public offering last May.
DealBook '

VENTURE CAPITAL '

Technology Industry Gets Behind Immigration Reform  |  “Rarely has the industry been so single-mindedly focused on a national policy issue, with executives like Mark Zuckerberg of Facebook and John T. Chambers of Cisco personally involved,” The New York Times writes.
NEW YORK TIMES

Former Kleiner Perkins Partner Joins Reddit  |  Ellen Pao, who is suing her former firm, Kleiner Perkins Caufield & Byers, over gender discrimination, is now leading strategic partnerships at Reddit.
REUTERS

Foursquare Raises $41 Million - in New Debt  |  Foursquare, the mobile start-up focused on users letting their friends know where they are, said on Thursday that it had raised $41 million in new debt, rather than equity.
DealBook '

LEGAL/REGULATORY '

Herbalife Ties to ‘Work From Home' Promoters May Draw New Scrutiny  |  The Federal Trade Commission has received hundreds of complaints from consumers who said they were unwittingly recruited to sell for the nutritional products company.
DealBook '

Consultants to Banks Are Sharply Questioned on Independence  |  The use of consultants, who are paid by the same banks they are expected to help reform, is being examined at a Senate Banking Committee hearing.
DealBook '

Senior R.B.S. Executive in Japan Expected to Resign in Libor Scandal  |  A senior executive at Royal Bank of Scotland's Japanese investment banking unit is expected to resign in the wake of a rate-rigging scandal, according to a person with direct knowledge of the matter.
DealBook '

Creditors Have a Dim View of Cyprus's Future  |  “According to a bleak assessment released Thursday by its European partners, Cyprus will fall into a downward spiral for at least the next two years, with the economy contracting up to 12.5 percent during the period as the country reduces a banking sector that had ballooned to more than five times its gross domestic product,” The New York Times writes.
NEW YORK TIMES