Two Professionals Leave JPMorgan’s Muni Capital Markets Group

Two high-profile professionals in the municipal capital markets group at JPMorgan left their jobs at the end of last year. Market participants across Wall Street have worried recently that money lost at the end of 2007 might begin costing other people their jobs, too. Among the new Wall Street vacancies are the positions of Doug MacFaddin, who ran cash and derivatives sales and marketing at JPMorgan, and James Hertz, a vice president in the firm’s municipal derivatives group. The bank confirmed Friday that both have left their jobs. MacFaddin had become a point of controversy at JPMorgan, according to several sources. Formerly the head of tax-exempt derivatives, he was promoted to lead a combined cash and derivatives group last fall. One source linked MacFaddin’s promotion with several subsequent departures, saying there had been an “over my dead body” response. An internal memo circulated on Nov. 19 said MacFaddin would be “taking some time off to evaluate other opportunities.” Tom Ryan was asked to assume MacFaddin’s duties, according to the memo, which was signed by tax-exempt capital markets chief Bill Johnson. Hertz resigned from JPMorgan, effective Dec. 12, said spokesman Brian Marchiony. Munis’ underperformance, relative to taxable products, has left many of the market’s largest leveraged accounts with stinging losses this year. Even during a year that saw a record $427 billion of bonds sold in the primary market, proprietary accounts have lost money at many of the market’s largest broker-dealers. With some firms set to dole out bonuses in the next few weeks, sources said they think many people will keep their jobs only by taking little or no bonus this year.