Blythe Masters Under Investigation By Federal Prosecutors

Tyler Durden's picture


There is much new info in the just released Bloomberg profile on the infamous ex-JPMorganite Blythe Masters, among which the disclosure that she had made it clear that she had wanted to go along with the disposable JPM physical commodities unit (which as was reported recently, was sold to Swiss commodities giant Mercuria) and "and continue as the group's chief", a plan which did not work out as she had planned since she has no plans to "join the unit’s purchaser" (although joining Glencore is another matter entirely, and one which looks increasingly plausible) but what we find most striking is the following revelation: "Masters is under investigation by federal prosecutors in Manhattan, according to two people with knowledge of the matter. That probe was opened following a settlement with regulators that alleged JPMorgan manipulated power markets in the Midwest and California."

This is somewhat ironic because it was none other than Zero Hedge which asked nearly a year ago if "JPMorgan's "Enron" Will Be The End Of Blythe Masters?" Suddenly, the answer appears to be yes.

More from Bloomberg:

The existence of a probe surrounding JPMorgan’s role in the energy market has been known since August, when it was reported by several news organizations, including Bloomberg News, and subsequently disclosed by the New York-based bank. What wasn’t known was prosecutors’ interest in Masters.

We also learn that in addition to Mercuria, two other bidders for the JPM unit were Blackstone and Macquarie:

Blackstone appeared to have an inside track on Mercuria and Macquarie in the final round of bidding, according to three people involved in the process. The buyout firm had a significant banking relationship with JPMorgan through its history of acquisitions.


Its limited presence in commodities and energy trading also made it the most likely candidate to buy JPMorgan’s business in its entirety and bring Masters and her team on board to run it, the people said.

it is here that Masters' legal liabilities reared their, or technically her, ugly head:

As the January deadline for bids approached, the question of Masters’s legal exposure to the federal investigation remained, according to the people involved in the process.


JPMorgan didn’t provide a level of detail about the investigation that was satisfactory to some of the bidders, according to the people familiar with the process. Masters dismissed any concerns about the inquiry, one person said.


“We didn’t receive any complaints during the process,” said Marchiony, the bank spokesman, about information on the lingering investigation. 


Blackstone executives wondered whether there could be more to it than the bank was letting on, said one of the people. Given that Masters might end up as the public face of Blackstone’s commodities business, they were wary, this person said.


Macquarie also was wary about potential legal issues, said one of the people. The bank didn’t want any unforeseen developments to harm its reputation in the U.S. energy markets.


Mercuria’s executives were less concerned about the legal exposure, according to a person familiar with its bid. The firm, started in 2004 by two former Goldman Sachs Group Inc. traders, had a minimal presence in U.S. power and gas markets, and it could run JPMorgan’s business without Masters.

Could it perhaps be because Swiss regulators are even more clueless and coopted than their US peers? Considering the amount of Libor manipulators that ended up in Swiss asset managers the answer is a resounding yes. That said, even Mercuria appears to have nixed the idea of Blythe coming on board as part of the commodities group package.

This is not surprising. What is however, is just how concerned Blythe was about her own security.

During a due diligence period from mid-December through mid-January, a handful of bidders emerged. The most serious were Mercuria, New York-based buyout firm Blackstone Group LP (BX) and Macquarie Group Ltd. (MQG), an Australian bank. A fourth contender, Grupo BTG Pactual of Brazil, dropped out in part because of the extra capital Brazilian regulators would require it to hold, a person said at the time.


Masters met with senior executives from the three final bidders in New York and elsewhere, according to people involved in the process. Her arrival at some of the meetings, with an escort of bodyguards, left an impression on her unit’s suitors, said two of the people.

Now why would one go to a diligence meeting with bodyguards - it is almost as if she was convinced someone meant her harm regardless of the circumstances. Whyever could that be? Certainly not due to the way her group conducted itself full of "integrity" and abidance by the rules. Just recall from her CNBC interview in April 2012, in which she made the following on the record disclosures:

  • JPM's commodities business is not about betting on commodity prices but about assisting clients"... "it's about assisting clients in executing, managing, their risks and ensuring access to capital so they can make the kind of large long-term investments that are needed in the long run to expand the supply of commodities"...
  • "There's been a tremendous amount of speculation particularly in the blogosphere on this topic. I think the challenge is it represents a misunderstanding as the nature of our business. As i mentioned earlier, our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk management objectives. The challenge is that commentators don't see that. So to give you a specific example, we store significant amount of commodities, for example, silver, on behalf of customers we operate vaults in New York City, Singapore and in London. And often when customers have that metal stored in our facilities, they hedge it on a forward basis through JPMorgan who in turn hedges itself in the commodity markets. If you see only the hedges and our activity in the futures market, but you aren't aware of the underlying client position that we're hedging, that would suggest inaccurately that we're running a large directional position. In fact that's not the case at all.
  • "We have offsetting positions. We have no stake in whether prices rise or decline. Rather we're running a flat or relatively flat matched book.
  • "What is commonly out there is that JPMorgan is manipulating the metals market. It's not part of our business model. it would be wrong and we don't do it."

Of course, if some or all of the above bullet points were flat our lies, one can understand why Blythe could be concerned about her personal security. Which in the aftermath of the London Whale fiasco in which we learned that JPM mostly exceled in lying about everything, appears to have been precisely the case.

In retrospect we can understand why the inventor of the Credit Default Swap would only dare go out in public with a couple of armed gorillas covering her back.

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Thu, 04/10/2014 - 22:29 | 4646060 fooshorter
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Thu, 04/10/2014 - 22:30 | 4646064 The Gooch
The Gooch's picture

Silver, BITCH.

Thu, 04/10/2014 - 22:31 | 4646066 Slave
Slave's picture

Don't you mean meth? JESSE.

Thu, 04/10/2014 - 22:35 | 4646078 The Gooch
The Gooch's picture

Try selling paper meth on the street.

Thu, 04/10/2014 - 22:36 | 4646084 Slave
Slave's picture

Don't you mean blue meth? JESSE.

Thu, 04/10/2014 - 22:40 | 4646100 The Gooch
The Gooch's picture

Heisenberg is DEAD and rolling in his grave.

Fuck you Cranston.

Thu, 04/10/2014 - 22:49 | 4646133 Slave
Slave's picture

Heisenberg was a better guy than Bryan Cranston.

Thu, 04/10/2014 - 22:57 | 4646156 Fish Gone Bad
Fish Gone Bad's picture

I just love Blythe Masters!!!!  She is creative, goal oriented, rich and beautiful.  What is not to love?

Thu, 04/10/2014 - 22:59 | 4646166 Max Hunter
Max Hunter's picture

Zackly. She can hide out in my bedroom for a week or so.


Thu, 04/10/2014 - 23:06 | 4646179 LetThemEatRand
LetThemEatRand's picture

You'd be better off fucking a real squid.  Same marks when you're done, but the money will still be in your wallet.

Thu, 04/10/2014 - 23:10 | 4646189 The Gooch
The Gooch's picture

Like Ted Cruz.


(bring on the red!)

Thu, 04/10/2014 - 23:19 | 4646224 NoDebt
NoDebt's picture

Poor Blythe.

Last one standing without a chair when the music stopped.

Thu, 04/10/2014 - 23:39 | 4646266 smlbizman
smlbizman's picture

looking for number 14 since jan. 26....could she be it?.....

Fri, 04/11/2014 - 00:06 | 4646319 Four chan
Four chan's picture

tip for sec regulators, they are all guilty.

the more profit the more underhanded manipulation.

Fri, 04/11/2014 - 00:14 | 4646340 strannick
strannick's picture

Under-the-bus-Blthye. Dare to dream. ''Ding dong the witch is dead...''

Fri, 04/11/2014 - 05:38 | 4646605 GetZeeGold
GetZeeGold's picture



Blythe received a gold plated nail gun kit when she left JPM.


Unfortunately it didn't come with instructions.


Bodyguards huh?



Fri, 04/11/2014 - 07:01 | 4646669 cifo
cifo's picture

When you live by the sword, you die by the sword.

Fri, 04/11/2014 - 06:52 | 4646661 1stepcloser
1stepcloser's picture

I want first dibs as her prison guard

Fri, 04/11/2014 - 00:23 | 4646356 barliman
barliman's picture


If this is accurate ... " the inventor of the Credit Default Swap would only dare go out in public with a couple of armed gorillas covering her back" ... why would you want her in your bed?

On the other hand, if you can't snap your fingers and have YOUR lackeys roll out a literal TON of physical gold ... why would she want to be within a mile of you?

IAC ... there are undoubtedly enough oligarchs she's pissed off or on to insure someday the pretty lady will  d i s a p p e a r 

Fri, 04/11/2014 - 00:29 | 4646365 eatthebanksters
eatthebanksters's picture

What's the difference between Blythe (JPM) and my bookie who recently got popped?  They are both making bets on both sides with other peoples money and taking the vig.  Half win half lose, they don't give a shit but they get 10% of the book...if it were legal we would all be doing it.

Fri, 04/11/2014 - 00:42 | 4646389 MontgomeryScott
MontgomeryScott's picture


I'll educate you.

Blythe Masters is a girl. She has a pretty smile and a nice set of titties. She is also one of the 'priveledged class', in that she has supposedly 'broken through' the so- called 'glass ceiling' of so-called 'gender bias' (AND, she has a nice fuckable ass, as well).

Tell me about your bookie.

A nasty, ugly, short, nervous MALE by the name of, perhaps, 'Guido', or 'Vinnie', HE isn't skinny, and has a small cock and NO titties. His ass has pimples on it, and his ass is not desirable by either sex (as he still hasn't learned how to wipe the shit off correctly, and never heard of soap)...



Fri, 04/11/2014 - 01:47 | 4646462 Manthong
Manthong's picture

maybe miedevel on her butt would be approprite..

gee.. after all.. all thats what the MSM wants to impress on the dupes/

Fri, 04/11/2014 - 03:34 | 4646545 manofthenorth
manofthenorth's picture

"Five To One"

Yeah, c'mon
Love my girl
She lookin' good
One more

Five to one, baby
One in five
No one here gets out alive, now
You get yours, baby
I'll get mine
Gonna make it, baby
If we try

The old get old
And the young get stronger
May take a week
And it may take longer
They got the guns
But we got the numbers
Gonna win, yeah
We're takin' over
Come on!


Your ballroom days are over, baby
Night is drawing near
Shadows of the evening crawl across the years
Ya walk across the floor with a flower in your hand
Trying to tell me no one understands
Trade in your hours for a handful dimes
Gonna' make it, baby, in our prime

Come together one more time
Get together one more time
Get together one more time
Get together, aha
Get together one more time!
Get together one more time!
Get together one more time
Get together one more time
Get together, gotta, get together


Hey, c'mon, honey
You won't have along wait for me, baby
I'll be there in just a little while
You see, I gotta go out in this car with these people and...

Get together one more time
Get together one more time
Get together, got to
Get together, got to
Get together, got to
Take you up in my room and...
Love my girl
She lookin' good, lookin' real good
Love ya, c'mon

Fri, 04/11/2014 - 04:31 | 4646580 hot sauce technician
hot sauce technician's picture

Why in the name of all that is righteous do you use Bing?

Fri, 04/11/2014 - 06:53 | 4646664 unrulian
unrulian's picture

How old are you guys that think Blythe is hot?

Fri, 04/11/2014 - 07:40 | 4646721 robertocarlos
robertocarlos's picture

Over 50

Fri, 04/11/2014 - 01:51 | 4646463 wee-weed up
wee-weed up's picture



"Masters is under investigation by federal prosecutors...'

Pffft!  Mere window-dressing for the masses.

Fri, 04/11/2014 - 03:55 | 4646557 J S Bach
J S Bach's picture

Banksteress "suicide" red alert!

Fri, 04/11/2014 - 00:04 | 4646309 john39
john39's picture

bean her with a shoe.

Fri, 04/11/2014 - 01:31 | 4646447 ElvisDog
ElvisDog's picture

Is is wrong that I want to fuck Blythe Masters doggie style?

Fri, 04/11/2014 - 05:25 | 4646600 olenumbersix
olenumbersix's picture

Hope she likes it ruff.

Thu, 04/10/2014 - 23:00 | 4646172 Anusocracy
Anusocracy's picture

She may end up as rotten as Hitlery on the inside but at least she won't be as ugly on the outside.

Thu, 04/10/2014 - 23:27 | 4646243 palmereldritch
palmereldritch's picture

She's English, so I'm guessing probably her teeth and a Royal fetish.

Fri, 04/11/2014 - 02:21 | 4646497 drendebe10
drendebe10's picture

Bush or hardwood?

Fri, 04/11/2014 - 04:19 | 4646574 hot sauce technician
hot sauce technician's picture

Define "beautiful" dawg. In my book, Blythe Masters is beautiful like Lloyd Blankstein is handsome.

Fri, 04/11/2014 - 06:32 | 4646640 Wahooo
Wahooo's picture

Three things: 1) Wrong species; 2) Tribal member; 3) Banksta

Thu, 04/10/2014 - 22:50 | 4646134 kliguy38
kliguy38's picture

she'll probably get a "hard" spanking and then a "fine" ... after her book she should get Treasury Sec or SEC chief.

Thu, 04/10/2014 - 22:58 | 4646162 Slave
Slave's picture

I bet you're already in line to give her that spanking.

Thu, 04/10/2014 - 23:14 | 4646205 kliguy38
kliguy38's picture

yup....... and she can call me daddy

Fri, 04/11/2014 - 17:51 | 4649209 waterhorse
waterhorse's picture

She'll end up teaching Control Fraud 101 at university, like her buddy Fabulous Fab.

Thu, 04/10/2014 - 22:45 | 4646120 philipat
philipat's picture


Thu, 04/10/2014 - 23:04 | 4646177 The Gooch
The Gooch's picture

Whose still paying for these "Fire Kathleen Sebelius" pop-ups?


Thu, 04/10/2014 - 22:32 | 4646069 Soul Glow
Soul Glow's picture

She will probably be burried with a tonne of silver like some god foresaken princess pharaoh.

Thu, 04/10/2014 - 23:06 | 4646180 Anusocracy
Anusocracy's picture

I'm hoping her bodyguards are packing nail guns.

Thu, 04/10/2014 - 22:33 | 4646070 TruthInSunshine
TruthInSunshine's picture

With a name like Blythe, you just know her parents were the completely anal-retentive, elite-effete types, who harbored deep & twisted hatred towards each other, and engaged in all manner of moral & sexual depravity-bordering-on-brutality.

Thu, 04/10/2014 - 22:38 | 4646086 Grande Tetons
Grande Tetons's picture

Dear, have you heard that the porno industry is infested with this AIDS problem. 

Yes, honey, I have. Pittty. 

Wanna go fuck a goat?  

Honey, goat night is tomorrow. 

Thu, 04/10/2014 - 22:40 | 4646101 swmnguy
swmnguy's picture

Or it just tells you she's British.  Which, come to think of it, suggests the rest.  Never mind.

Fri, 04/11/2014 - 08:02 | 4646771 BennyBoy
BennyBoy's picture

She's the next Corzine.

Fri, 04/11/2014 - 09:07 | 4646979 Big Corked Boots
Big Corked Boots's picture

You mean, she won't get jail time?

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