AIB sacks six executives over trading losses at Allfirst

Irish bank AIB, which has been at the centre of one the biggest banking fiascos since Barings, has sacked six executives at their American subsidiary Allfirst.

The job losses were announced following the publication of US banking expert Eugene Ludwig's 30-day examination of the $691 million trading losses incurred at Allfirst.

AIB blames the alleged fraud at its Allfirst division on the actions of currency trader John Rusnak, who has already been dismissed. The bank has accused him of forging documents in order to conceal trading losses incurred between 1997 and 2001.

Six staff at Allfirst have been fired, including the head of treasury, David Cronin, and Lawrence Smith, John Rusnak's immediate superior. The retirements of both Frank Bramble, head of AIB's US operations and Pat Ryan, AIB's Group Treasurer, were announced in January and will take effect from June. Susan Keating will keep her job as Chief Executive Officer of Allfirst.

Eugene Ludwig's report found that John Rusnak was involved in the falsification of bank records and documents but that nobody inside or outside AIB had any knowledge that fraudulent trading was occurring at Allfirst. The report also found that supervision at Allfirst was weak and failed to monitor Mr Rusnak's trading over an extended period.

Mr Ludwig also found that there was a lack of appreciation at AIB Group level of the risks associated with hedge-fund foreign exchange trading.

Both AIB Chairman, Lochlann Quinn and Chief Executive Michael Buckley, offered their resignations to the board of AIB on Tuesday 12 March, but were asked to stay on, with full approval from the board.

AIB has appointed Eugene Sheehy - formerly managing director AIB Republic of Ireland - as CEO of AIB USA and Executive Chairman Designate of Allfirst. AIB has also said the positions of Chief Risk Officer and Head of Group Internal Audit will be filled by external appointees. All proprietary trading at Allfirst and AIB's Polish divisions will cease.

The FBI is conducting a criminal investigation into the losses at Allfirst.


Related Northern Ireland News Stories
Click here for the latest headlines.

30 September 2015
NIPSA Members Hold Protests Over Job Losses In The Public Sector
Members of trade union NIPSA have held protests over jobs that have been "wiped out" from the public sector by voluntary redundancies.
20 November 2015
Job Losses Following Xtra-vision Closures
Eighteen full-time and a number of part-time jobs are to be lost with the closure of of eight Xtra-vision stores across Northern Ireland. The DVD and video rental chain has said that the "continued decline in rentals" has led to the store closures. The chain was bought by Hilco Capital Ireland for an undisclosed sum in 2014.
30 July 2015
Ulster Bank Records Operating Profit Of £131m
Ulster Bank has recorded an operating profit of £131 million for the first half of this year. The bank reported a £55 million profit in the same period last year. The firm also said that new lending to business increased by 57%.
25 September 2008
Bank Robbery Trial Hears Of Panic As Mobile Signal Lost
Evidence continued yesterday in the Northern Bank trial, where a bank employee, Chris Ward continues to deny being part of the plot that ultimately robbed the city centre bank of £26.5 million.
08 October 2015
Other News In Brief
Plans To Establish Specialist Eating Disorders Unit To Be Discussed Plans to set up a specialist eating disorders unit in Northern Ireland are to be discussed. Health Minister Simon Hamilton confirmed between 18,000 and 20,000 individuals will be living with an eating disorder in Northern Ireland at any one time.
22 July 2015
Danske Bank Reports £65m Profit
Danske Bank in Northern Ireland has recorded a pre-tax profit of £65m in the first half of 2015. The result is a significant improvement on the £37.4m profit recorded the same time last year. Danske Bank UK CEO, Gerry Mallon, said: "I am very pleased to report a £65 million profit for the first half of 2015.
10 July 2015
Road Users Urged To Take Care Over Bank Holiday Weekend
Drivers and the public are being urged to take care on the roads over the Bank Holiday weekend. Environment Minister Mark H Durkan said: "We cannot afford to be complacent." He added: "More children will be walking and cycling and many families will be out and about enjoying the break.
23 July 2015
Belfast Festival To Go-Ahead Despite Funding Cuts
The Belfast Festival is to go-ahead despite loss of funding from its main sponsor Queen's University. The festival has been renamed the 'Ulster Bank Belfast International Arts Festival' and will run from Friday 9 October to Sunday 1 November.
25 September 2008
Estate Agents Face Fine For Failing To Oblige Redress Law
All Northern Ireland estate agents who fail to sign-up to a redress scheme by the end of this month will be fined, the government has warned. The new law will require every estate agent, who engages in residential estate agency work, to belong to an approved redress scheme.
27 March 2013
AIB Records €2.8bn Loss In 2012
Allied Irish Banks, the parent company of Northern Irish bank First Trust, has announced an operating loss of €2.8bn for 2012. There was a €2.9bn (5%) growth in customer accounts in 2012, despite the announcement to close certain offshore businesses.
25 October 2002
AIB fraudster jailed for seven years
A former currency trader has been jailed for seven years for his part in one of the largest bank frauds in history. John Rusnak pleaded guilty to bank fraud over the trading scam that cost Allied Irish Banks (AIB) nearly $700 million in trading losses.
13 November 2015
Other News In Brief
Farmer Fined For Pollution Offence A Co Tyrone farmer has been fined for a pollution offence at Omagh Magistrates' Court. Mervyn David from Dromore was fined £350 plus an offenders levy of £15.
02 March 2010
Bank 'Blames NAMA' For Huge Losses
A bank that trades across the whole of Ireland has revealed shocking losses. Troubled AIB's Northern Ireland business, First Trust, lost £86m alone - compared to a £33m profit in 2008. However, the bank's performance in the Irish Republic was disastrous with total losses there reaching 3.5bn euros.
05 August 2009
Irish Bank Losses Rising
Northern Ireland's First Trust Bank has lost £41m, according to the latest financial statement. The report also detailed how this led to a £28m loss at the parent company Allied Irish Bank group's UK operation. AIB in The Republic has also reported a pre-tax loss of €872m for the first six months of its financial year.
13 August 2015
Concern Over Possible Redundancies At L'Derry Engineering Firm
Unite the union is concerned over possible redundancies at Maydown Precision Engineering in L'Derry. Members of the firm received letters last week over the possibility of 133 job losses. Philip Oakes, Regional Officer, has called on the new management to "come clean" on their plans for the workforce.