Wall Street legend Blythe Masters set for courtroom battle over FNZ workers declare

A courtroom in Wellington, New Zealand, thousands of miles from the City, is an unlikely venue for one of the biggest cases to explode in the financial world. But this week it will be the stage for one of the most complex and colourful legal dramas in years.

The cast of characters includes Blythe Masters, 57, a British-born Cambridge University graduate who was one of the most prominent female figures on Wall Street in the financial crisis of 2008.

Masters became a founding partner of the US-based private equity firm Motive, which invested in the financial technology firm FNZ in 2022.

Two years later, she went on to become chief executive of FNZ, whose software platforms are used to house investments for millions of British savers.

Now she is one of the defendants in a lawsuit launched by former and current employees of FNZ, who claim they were unfairly treated in fundraising deals.

More than 1,500 pages of affidavits have been submitted in the £3.3 billion case, which names a string of directors along with Masters, including FNZ’s charismatic founder, entrepreneur Adrian Durham.

The employees in the class action say they worked night and day to build FNZ’s business in its early days. They claim that despite this, the value of their shareholdings has been heavily diluted in a series of capital-raising exercises, which they say favoured big investors. Under certain circumstances, they argue their hard-earned holdings could be worthless.

Big British companies, including insurer Aviva, Aberdeen Investments, Barclays Bank and financial platform AJ Bell, which use FNZ services, will be watching with interest. The UK accounts for half of the £1.7 trillion of assets FNZ holds globally.

In other words, there is a good chance that if you have pension or stock market savings, they are managed with the help of FNZ technology.

The employee shareholders argue they have been short-changed and treated as an afterthought in the capital-raising deals, despite the blood, sweat and tears they gave the business.

They claim they were elbowed aside in deals tailored for large institutional investors.

These include Blythe Masters’ firm Motive, along with Generation, chaired by former US vice president Al Gore, Singaporean wealth fund Temasek and Canadian pension fund manager La Caisse, where former John Lewis boss Dame Sharon White is head of global affairs.

FNZ is deeply embedded in the UK financial establishment. It was chaired for many years by Scottish insurance grandee Lord Leitch who died in 2024.

Dame Alison Rose, the well-respected former NatWest boss who left after a row over ‘debanking’ with Reform UK leader Nigel Farage, was appointed to chair its UK operations.

She arrived after the events that led to the court battle and is not involved in the case.

The employee shareholders are aggrieved that their loyalty and devotion, inspired by Durham, who founded the firm in 2003, has as they see it been disregarded.

They are angry that despite contributing so much ‘sweat equity’ they were not given the opportunity to participate in the capital-raising at the same time as the institutions. They say they were only invited to subscribe in a ‘catch-up’ offer.

‘We have been treated as a total afterthought. We are furious after all we put into this business,’ said a class action group member.

FNZ argues that the case should not be heard in a New Zealand court at all, because the disgruntled employee shareholders signed an agreement that any dispute of this nature would be resolved through arbitration in London.

The class action group member said: ‘This is a tactic to undermine the claimants because it would increase the costs up to ten-fold.’

The row turns a spotlight on to Blythe Masters, who at 28 became the youngest managing director of Wall Street giant JP Morgan.

A £734 million capital-raising was announced at the same time as her appointment at FNZ and a further £367 million the following year. The company had been running up big losses that rose from £233 million in 2022 to £417 million in 2023 and hit £505 million in 2024 – the latest figures available.

The FNZ bosses say that without the capital-raising exercises, FNZ would have been in serious difficulty. One source said: ‘If the big investors didn’t put money in, then everyone loses everything.’

The prospect of shareholders being left with worthless holdings is, the FNZ directors say, ‘very unlikely’ as it would involve the company’s worth being written down from a £15 billion valuation.

The source said FNZ had ‘maintained all along that the capital-raisings reflect a strong commitment by the company’s institutional shareholders to its long-term growth and success’, adding: ‘Regarding jurisdiction, the legal agreement governing the relationship between FNZ and its shareholders is very clear – any dispute relating to shareholder equity must be resolved in London.

‘FNZ continues to believe the claim is without merit and looks forward to this being resolved.’

Whoever emerges as the winner, what unfolds in Wellington will resonate far beyond that courtroom – the outcome will be felt in the heart of Britain’s financial system.