JPMorgan Throwing in Blythe Masters in Commodity Desk Sale

Jacob Harper  |

Litigation-racked investment bank JPMorgan & Chase Co. (JPM) put their multi-billion commodity desk up for sale back in July, looking for someone to take a wildly profitable but litigation-prone department off their hands. On Sept 17 the bank revealed they’re throwing in something else that has both made them a lot of money and caused them a lot of legal woes: wunderkind executive Blythe Masters, an executive renowned for her leadership, cunning, and proclivity for attracting the attention of government regulators.

Masters started at JP Morgan as an 18-year-old intern at their infamous London office, and quickly rose to head up their entire commodities department. The now 44-year-old Masters has been a divisive force in the company with her brash trades, making and losing fortunes. But there is no question she has a knack for making money, and her inclusion in the sale of the commodities desk has enticed investors.

Over 50 potential buyers have expressed interest in the unit, which JPMorgan is shedding as they face litigation from nearly every side of their business, Masters included.

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In an investigation conducted by the Federal Energy Regulatory Commission, Masters was accused of lying under oath about her knowledge of an energy price-manipulation scheme that defrauded California and Michigan ratepayers of $83 million. JPMorgan eventually paid out a $410 million settlement in connection with the manipulation.

Masters has also been implicated in price fixing schemes involving silver, and was closely tied to the development and sale of the credit derivatives that would eventually plunge the entire globe into financial turmoil. Masters has become something of a pariah in the public eye concerning her involment in the development of credit-default swaps, with the Gurdian going as far as to label her  the "woman who built the financial weapon of mass destruction."

Despite ongoing investigations into her propriety, Masters is unquestionably adept, and has made a fortune for JPMorgan. She is held in incredibly high esteem by CEO Jamie Dimon, who promoted her to head up the commodities desk in 2006. Paul Fribourg, the chairman and CEO of major JPMorgan client Continental Grain is similarly impressed, and had previously said “Tell (Masters) if she’s looking for a job, she’d be first on our list.”

While the exact price of Masters’ services is up for debate, the commodities desk itself is quantifiably quite valuable, racking up $2.4 billion in revenue last year.

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