Blythe Masters, a former top executive at JPMorgan Chase, is quitting the board of Phunware, a company thatfor Donald Trump’s 2020 re-election campaign.
Masters, who is chair of Phunware’s board, plans to exit the company on May 1. She informed the company of her resignation on March 24, Phunware disclosed in a filing this week.
In a separate filing, Phunware revealed that it was paid $3.2 million in 2020 by its largest customer, which the Associated Press has identified as American Made Media Consultants, the limited liability company controlled by Trump family members that directed the campaign’s spending.
A phone message left for Masters at Motive Partners, a private equity firm where she is now a partner, was not returned.
Phunware Chief Operating Officer Randall Crowder told CBS MoneyWatch that Masters’ recent nomination to the board of Swiss banking giant Credit Suisse required her to give up other board positions.
“She will remain with Phunware as a strategic advisor and is very much still a supporter of the company and an asset to our efforts,” Crowder said.
PPP loan leads to lawsuit
In April, Phunware received emergency federal assistance under the Paycheck Protection Program (PPP), a government-backed effort meant to help small businesses impacted by the pandemic. CBS MoneyWatchhad received a $2.85 million PPP loan that had been arranged by Masters’ former employer, JPMorgan.
Phunware and JPMorgan were later named as defendants in a class-action suit filed on behalf of Sha-Poppin Gourmet Popcorn and other small businesses that had failed to secure a Paycheck Protection loan through JPMorgan. In the suit, Sha-Poppin claimed that Phunware and other large companies benefited from a “two-tiered” system that gave JPMorgan’s well-connected clients preferential access to the program.
The suit also said that Phunware “currently works for the President’s re-election campaign” and noted that Masters was appointed chair of the company’s board on March 30, 2020, a day after Congress approved the Paycheck program.
In a press release at the time,the timing of Masters’ appointment had nothing to do with the PPP and that she played no role in helping the company get access to the government-backed funds from her former employer. A judge has since dismissed Phunware from the suit, saying Sha-Poppin lacked standing to sue Phunware. JPMorgan is fighting the lawsuit and has sought to get it moved to arbitration.
JPMorgan declined to comment to CBS MoneyWatch on the litigation at the time, but a section of its website devoted to PPP loans disputes that the bank gave priority to larger clients.
Masters’ link to the housing bust
Masters has had a long and storied history on Wall Street. The former trader, considered one of the most powerful women in finance, is widely credited with helping to create credit default swaps, a popular derivative on Wall Street that played a major role in the 2008 financial meltdown.
Vanity Fair named Masters one of the top 100 people to blame for the financial crisis. She left JPMorgan in 2014 after a 27-year career at the bank. A year later, she became head of a company that was developing blockchain — the technology that is the foundation for bitcoin and other cryptocurrencies.
Masters joined the board of Phunware in 2019 after the company had already established ties with Trump campaign officials in the 2016 election. She said at the time that she was drawn to the company because of its possible applications in the health care business.
CBS News reported in July that Phunware’s Trump campaign app was tapping aof data on Americans, including collecting the locations and cell phone contacts of millions of users. A September profile of the company in the New Yorker said that the company was collecting “huge amounts” of voter data for the Trump campaign.
A recent filing shows that Masters owns nearly 280,000 shares of Phunware, though many of those shares are in restricted units and may have to be forfeited when she leaves the company. Phunware shares, which had risen to a price of $308 in early 2019, recently traded for just $1.60.
With reporting from CBS News investigative reporter Graham Kates.