Three collateralized debt obligation bankers at CIBC World Markets--Tom Dial and John Shu, executive directors, and Chris Mowack, a director--were let go two weeks ago, says a senior securitization official at the bank. All reported to Ken Wormser, managing director and head of the New York-based asset securitization team. Wormser declined to comment. Another insider at the bank says the layoffs were based on the view that "the CDO business prospects are relatively weak today compared to two years ago."
Two CDO bankers at rival sell-side firms say that Wormser's group is under pressure because of the poor performance of two market value CDO deals the firm not only underwrote but retained equity in as an investor. Those allegations could not be verified. Erik Morse, a spokesperson at CIBC, declined to comment. The senior official confirmed that the bank lost some money in some market value deals, declining to name them. But he stressed that there is no correlation between the layoffs and the credit performance of those transactions.