Blythe Masters Leaves JPMorgan After Notable Career

JPMorganBy The original uploader was Frank.trampe at English Wikipedia [Public domain], via Wikimedia Commons

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.

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.



About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com