Bookmark and Share

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.

26 September 2016
Man Charged Over £1.2m Drugs Seizure
A 28-year-old man is to appear in court today, 26 September, after police seized drugs worth £1.2million in Belfast. A large quantity of cocaine, heroin and herbal cannabis were discovered after police stopped a car on the West Bank Road on Friday, 23 September.
14 November 2016
Latest Purchasing Managers' Index 'Mixed Blessing' For Businesses
The latest figures from the Ulster Bank's Purchasing Managers' Index (PMI) have shown a modest rise in private sector business activity. The Index revealed that while growth in NI was weaker than in the rest on the UK, export orders saw a substantial increase.
09 February 2017
Shortage Of Supply Remains A Challenge For Housing Market In NI
A shortage of supply of houses coming onto the market remains a challenge in Northern Ireland, according to a new survey. The supply of new houses coming onto the market is falling, according to a survey carried out by the Royal Institute of Charted Surveyors (RICS) in association with Ulster Bank.
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.
15 February 2017
Trading Standards Issues Warning Over Fake Jewellery
Following the seizure of a large quantity of un-hallmarked jewellery, the Northern Ireland Trading Standards Service (TSS) has urged consumers to check the validity of hallmarks when buying jewellery.
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.
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.
01 August 2001
AIB post strong first half year profits
Allied Irish Bank A (AIB) have posted promising first half profits attributing them to a strong performance from its Ireland and UK operations. The Dublin based bank have apparently shook off the effects of economic slowdown to record a pre-tax profit for the six months to June 30 of £409.8 million which is up from £374.1 million last year.
14 December 2010
NI Hit As Brian Blocks Bank's Bonus Bonanza
The Irish Republic's Finance Minister has blocked the payment of €40 million in bonuses by the State dependant Allied Irish Banks (AIB). It has also emerged that almost 50 First Trust staff in Belfast will miss out on their Christmas bonus after the parent company was prevented from paying any incentives.
12 April 2011
AIB Job Cuts 'Outrageous Blow'
The 1,400 bank workers at First Trust in Northern Ireland are today worried about their future following an announcement that at least 2,000 more jobs are to be axed by its parent business AIB Group by the end of 2012. The move has been called "an outrageous blow" to staff, according to Larry Broderick, General Secretary of IBOA, the Finance Union.
31 March 2011
Irish Bank 'Stress Tests' To Be Published
Trading in the Bank of Ireland and AIB has now been suspended for 24 hours. The move comes ahead of the publication of crucial stress tests today by the government. The full extent of financial trouble within the banks will be detailed late this afternoon.
29 January 2013
First Trust Face £2m Payout
A judge has ruled against First Trust Bank’s appeal over bonuses and pay rises, they now face a payout of £2m. The ruling by senior judges in Belfast on Monday is expected to result in increased wages for hundreds of workers.
27 July 2012
AIB Branches To Close Across Ireland And NI
Nearly 70 branches of Allied Irish Banks are to close in Northern Ireland and the Republic. The bank confirmed that 51 locations will shut up shop by the end of the year, with the remaining 16 closing in 2013.
05 July 2010
Dublin Summit Considers Border Economy
Economic issues are expected to top the agenda when Irish Prime Minister Brian Cowen hosts a meeting with Stormont's First and Deputy First Ministers in Dublin today. Taoiseach Brian Cowen will host Peter Robinson and Martin McGuinness at the summit and is expected to be attended by 26 Ministers from both sides of the border.