Blythe Masters, credited with creating the credit default swap while at JPMorgan Chase & Co. (NYSE:JPM), is leaving the bank according to a report in the Wall Street Journal.
“Blythe Masters has informed us of her intention to leave the firm, take some well-deserved time off and consider future opportunities,” said a memo reviewed by the Journal, which was signed by J.P. Morgan Chief Executive James Dimon and Daniel Pinto, chief executive of J.P. Morgan’s investment bank.
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After staring as an intern 27 years ago, Blythe Masters rose to run the investment bank’s commodity trading division. People around her called her “a brilliant student of market structure,” while others cited her dubious role in creating opaque investment products at the center of the 2008 market crash and her tangles with regulatory authorities, as previously reported in ValueWalk. After the 2008 financial crisis, The Guardian newspaper labeled her as “The Woman Who Built A Financial Weapon Of Mass Destruction.”
Blythe Masters had indicated she would leave after the bank sold the commodities division, which occurred last month in a $3.5 billion deal with Swiss-based Mercuria Energy Group. She will remain at the bank for several months during the transition, according to the memo.
Commodity Trading Division
The most notable of her division’s escapades involved admitted manipulation of the electricity markets, accused manipulation of the metals markets and her denying critical facts in the JPMorgan Chase & Co. (NYSE:JPM) “whale” trade.
In the electricity manipulation case involving Masters’ division, which was reminiscent of Enron except without the criminal charges, the Federal Energy Regulatory Commission (FERC) issued a blistering report, first reported in the New York Times, that said “Government investigators have found that JPMorgan Chase & Co. (NYSE:JPM) devised ‘manipulative schemes’ that transformed ‘money-losing power plants into powerful profit centers,’ and that one of its most senior executives gave ‘false and misleading statements’ under oath.”
She was not charged with obstruction of justice in the matter.
Blythe Masters CFTC nomination scrapped
This past February Blythe Masters was nominated by U.S. Commodity Futures Trading Commission acting commissioner Mark Wetjen to sit on a regulatory advisory panel. When the announcement of her appointment was made it elicited an immediate backlash on Twitter and in the blogosphere, which is credited by some for Blythe Masters’s withdrawal from the position.