The American Securitization Forum recently experienced an upheaval when most of its board resigned over a dispute with its executive director on the topics of bonuses and governance. The group is the primary trade association for the securitization industry, which generated over $500 billion of new bonds around the world.
Among those that resigned are JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup (C), and Deutsche Bank (DB). Sources that spoke on the grounds of anonymity said that the departures now place the future of the forum in peril. Also no longer on the ASF board are Fitch Ratings Ltd., Amherst Securities Group LP, Natixis SA, and Moody’s Investors Service.
The different board members stepped down after they were unable to remove the ASF board’s executive director Tom Deutsch. Even though they disagreed with the bonuses he received, they couldn’t displace him because of existing documents regarding governance.
The ASF website reports that its members are comprised of investors, issuers, rating companies, financial intermediaries, trustees, legal accounting firms, and servicers. Founded as part of the Securities Industry and Financial Markets Association in 2002, the association was involved in a contentious break from the latter in 2010. Deutsche was granted to set up ASF as its own entity and at first he was not just its director but also its only member. The governing structure set up then was supposed to be short-term.
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