The main trade association for the securitization industry is in turmoil after most of the board resigned in a dispute with the group's executive director over governance and bonuses, according to six people with knowledge of the matter.
The exodus at the American Securitization Forum puts the future of the group in question, said the sources, who spoke on condition of anonymity because the dispute isn't public.
The resignations came after the board attempted to remove the forum's executive director, Tom Deutsch, but was unable to fire him because of the way that the association's governing documents are written, the sources said.
Part of the dispute concerns bonuses that Mr. Deutsch was paid, the people added.
Mr. Deutsch, who joined the group's staff in 2004 after working as a lawyer at Cadwalader, issued a statement saying: “We remain focused on the advocacy and educational needs of all of the interests in the structured-finance industry.”
Although the statement didn't directly address the mass resignations, he said that negotiations over the association's separation several years ago from the Securities Industry and Financial Markets Association have been “messier and more difficult than expected.”
Other firms that have left the group or pulled their employees off the board include Amherst Securities Group LP, Fitch Ratings Ltd., Moody's Investors Service and Natixis SA, the sources said.
Ralph Daloisio of Natixis was the chairman of the ASF board. He didn't return calls seeking comment.
Zia Ahmed, a spokesman for BofA, confirmed that the bank quit the forum, declining to comment further.
Sean Dobson, head of Amherst Securities, left the board “due to concerns around transparency and governance,” said Tom Johnson, a spokesman for the bond broker.
Spokesmen for other board members either declined to comment, didn't respond to messages or couldn't be reached.
The ASF lobbies and holds conferences for the industry, which packages loans and leases into securities. Last year, securitization produced more than $500 billion in new bonds globally.
In testimony to Congress last year, Mr. Deutsch said that the forum had 330 members.
According to the group's website, members include issuers, investors, financial intermediaries, ratings companies, legal and accounting firms, trustees and servicers.
The group is known for hosting a lavish annual meeting that has returned to Las Vegas after moving to less glitzy locations after the 2008 financial crisis. It took place in January at the Aria Hotel and Convention Center, home to Cirque du Soleil's show “Zarkana.”
Attendance totaled more than 5,300, Mr. Deutsch said at the time.
The association was founded in 2002 as part of SIFMA, Wall Street's biggest lobbying group.
In 2010, it split off in a contentious divorce, during which Mr. Deutsch was allowed to set up the ASF as a separate entity with himself as the sole member and director, the sources said.
That governing structure was supposed to be temporary, though it persists, and a committee established to negotiate with Mr. Deutsch has made little headway on a new arrangement, a source said.
Mr. Deutsch faced an earlier round of defections last year over governance complaints highlighted in a letter of resignation to the board from Vernon Wright, its first chairman.
Directors weren't permitted to review some financial information, including staff pay, and had no legal control over the group, wrote Mr. Wright, an ASF founder who was chief financial officer of credit card issuer MBNA Corp.
The “corporate-governance concerns lead me to the conclusion that the executive director is not being properly supervised,” he wrote.