Morgan Stanley on Thursday reported first-quarter profit of $1 billion, or 50 cents a share, driven by sold results in wealth management. The profit compared with a loss of $79 million a year earlier and beat estimates. Excluding one-time charges, the firm had a profit of $1.2 billion, or 61 cents a share, which was down from $1.4 billion reported in the first quarter of 2012. The firm is holding a conference call at 10 a.m. to discuss the results.
RISING PROFITS TEMPT A PUSH FOR TOUGHER RULES  | Rising profits may turn out to be a source of discomfort for banks, DealBook’s Peter Eavis writes. “The ballooning bottom lines could embolden the lawmakers and regulators who want to introduce additional measures to overhaul the banking system.â€
New rules have not brought about the disruption that many officials feared. And now, buoyant profits could provide ammunition for those in Washington who advocate for a more radical overhaul. “I hope the regulators move forward with tougher regulations,†said Sheila C. Bair, a former chairwoman of the Federal Deposit Insurance Corporation. “This wouldn’t endanger the economic recovery.†In some ways, banks have thrived since 2008 despite the added costs of new rules. “No one can argue that banks were hurt from a profit standpoint by regulation,†said Dick Bove, a bank analyst at Rafferty Capital Markets.
There is a bipartisan push to toughen regulation. Recently, Senator Sherrod Brown, Democrat of Ohio, and Senator David Vitter, Republican of Louisiana, said they would introduce a bill to require the biggest banks to hold significantly more capital. Last year, Daniel K. Tarullo, the Federal Reserve governor who oversees regulation, floated an idea for limiting bank size.
RICCI TO STEP DOWN FROM BARCLAYS  | The head of corporate and investment banking at Barclays, Rich Ricci, is stepping down. A top lieutenant to Robert E. Diamond Jr., the former Barclays chief executive who stepped down after a rate-rigging scandal, Mr. Ricci had been expected to leave after his name surfaced in the Libor inquiry, DealBook’s Mark Scott writes. “Earlier this year, regulatory filings showed that Mr. Ricci had cashed in $26 million of deferred shares. He was awarded the shares â€" some 5.7 million â€" as part of his bonus from 2009 to 2011.â€
CERBERUS OWNER MIGHT BUY GUN MAKER  | As Cerberus Capital Management looks for buyers for the Freedom Group, the gun maker it pledged to sell in the wake of the school shootings in Connecticut, the private equity firm has found a possible buyer in its owner, Stephen A. Feinberg. “He has reached out to friends and other wealthy investors about teaming up on a potential offer,†DealBook’s Peter Lattman reports, citing two people briefed on the matter. “The bid would be what is called a stalking horse bid, essentially setting the floor for other offers in the auction process.â€
“A bid by Mr. Feinberg presents a host of potential conflicts of interest. It is exceedingly rare, if not unprecedented, for the owner of a private equity fund to purchase a company owned by the fund. To entertain a bid by Mr. Feinberg, these people said, Cerberus Capital Management and the Freedom Group will adopt several measures to avoid any perception of inside dealing and to prevent a sweetheart deal for Mr. Feinberg at the expense of his investors.â€
The Senate’s defeat of gun-related measures on Wednesday, all but ending an effort to pass meaningful legislation, may actually have a positive effect on the Freedom Group’s business, Mr. Lattman notes.
ON THE AGENDA  | The Blackstone Group and Verizon report earnings before the market opens. Advanced Micro Devices, E*Trade Financial, Google and Microsoft report earnings on Thursday evening. SeaWorld Entertainment is scheduled to price its initial public offering. Officials including Wolfgang Schäuble, the German finance minister, and Jeroen Dijsselbloem, the chairman of the Eurogroup, speak in Washington at the Bertelsmann Foundation-Financial Times conference.
LOEB CONFRONTS TENSION OVER PENSIONS  | The hedge fund manager Daniel S. Loeb has been facing criticism after an article in Rolling Stone highlighted his connection to a group that has advocated for states to alter pension benefit plans. Now, Mr. Loeb, the billionaire who runs Third Point, has canceled his plans to speak at a Thursday conference of the Council of Institutional Investors, after certain pension funds threatened to confront him, Reuters reports. The hedge fund manager defended himself in a letter to the chair of the investor group, saying, “I have never taken a position against†defined benefit plans, “nor has any philanthropic organization I lead.â€
Growing Chorus of Support for Dish’s Bid for Sprint  | Leon Cooperman of Omega Advisors, which holds shares of Dish Network and Sprint, said Dish’s $25.5 billion offer to buy Sprint was “superior†to a rival deal. REUTERS
Hulu Said to Hire Guggenheim Partners to Advise on a Sale  | At the same time, Guggenheim is “considering making its own bid†for Hulu, according to Reuters. REUTERS
Roper Industries to Buy Health Care Services Company  | Roper is paying $1 billion in cash to buy Managed Health Care Associates, helping it expand in health care, Reuters reports. REUTERS
Investors in TNK-BP Take Concerns to the Top  | International investors in the Russian oil company TNK-BP had an audience with the chief executive of Rosneft, the majority owner, to try to resolve a conflict, but “got few assurances,†The Wall Street Journal writes. WALL STREET JOURNAL
Deutsche Bank Puts a Ceiling on Executive Pay  | The co-chief executives of Deutsche Bank “will have their total pay for 2013 capped at 9.85 million euros ($13 million) each, according to the agenda for the company’s annual shareholders’ meeting,†Reuters reports. REUTERS
For Bank of America, C.E.O. Greed Would Be a Good Thing  | About half of the pay for the bank’s chief executive, Brian T. Moynihan, is now tied to hitting specific targets for average return on assets and tangible book value by 2015, Agnes T. Crane of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
Judge Revives Lawsuit Against Bank of America Executives  |Â
REUTERS
R.B.S. Is Hiring in Germany  | After eliminating jobs in Germany last year, the Royal Bank of Scotland is now adding employees there in transaction services and sales, according to Bloomberg News. BLOOMBERG NEWS
Buyout Firms Weigh I.P.O. of French Cable Company  | The Carlyle Group, Cinven and Altice “are exploring an initial public offering of their jointly-owned French cable company Numericable, following a handful of other listings of private equity-backed companies in Europe this year,†The Financial Times reports. FINANCIAL TIMES
In the Hamptons, Financiers Try to Hold Back the Ocean  | Some Wall Streeters are erecting fortifications to make sure their houses in the Hamptons are not destroyed by the next major storm, The New York Times writes. NEW YORK TIMES
Hedge Funds Focus on Banks in Negative Derivative Bets  | “Six months on from the ban on buying naked sovereign C.D.S. protection - where the investor does not own the underlying government bond - it is clear that negative bets against large financials have emerged as a partial replacement,†The Financial Times reports. FINANCIAL TIMES
Hedge Funds Focused on Energy Take a Beating  | “For the first time in years, traders are being squeezed by the popular, seasonal wager among veteran traders that gas supplies will become more plentiful as the weather warms up,†The Wall Street Journal writes. WALL STREET JOURNAL
Small Businesses Learn to Master Currency Exchange  | “As more small companies conduct business overseas, owners are learning that volatile exchange rates can cut into profits,†The New York Times writes. “More of these businesses are using banks and international payment companies and creating risk management strategies that mimic those of large concerns.†NEW YORK TIMES
Twitter to Let Advertisers Personalize Messages  |Â
WALL STREET JOURNAL
Settling Fee Dispute, Law Firm Denounces ‘E-Mail Humor’  | DLA Piper settled out of court with a client who accused it of overbilling in a case where internal lawyers’ e-mails suggested a lax attitude toward the size of the bill. DealBook »
Efforts to Revive the Economy Lead to Worries of a Bubble  | Through its unconventional policies, the Federal Reserve is trying to alleviate the crisis. Instead, it has kindled speculation, Jesse Eisinger writes in his column, The Trade. DEALBOOK
Clues to the S.E.C.’s Focus Under Its New Leader  |Â
BLOOMBERG NEWS
With Euro Zone Crisis, I.M.F.’s Power Grows  | Christine Lagarde, the managing director of the International Monetary Fund, “has become a quasi head of state, whose views carry more weight than those of many elected leaders†in Europe, The New York Times writes. NEW YORK TIMES
