The trader at the centre of an €860 million loss at AIB's main US subsidiary, Allfirst, was involved in fraud, the bank has said.
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Mr John Rusnak, who is suspected of
stealing $750mn from Allfirst bank |
Group chief executive Mr Michael Buckley said last night he had no doubt that Mr John Rusnak was involved in fraudulent activities. "Whether or not he personally benefited remains to be seen," said Mr Buckley.
However, the lawyer representing Mr Rusnak protested his client's innocence. Mr Rusnak was earlier interviewed by the FBI at his home in Baltimore where the AIB-owned Allfirst Finance is headquartered.
It is claimed he ran up the huge €860 million loss in a series of suspected bogus trading deals over a period of as much as a year. Bank officials only realised the scale of the operation last weekend.
His lawyer has denied any offence has taken place or that his client was at any time on the run after failing to turn up for work earlier this week.
AIB is to appoint an independent expert to investigate the alleged fraud at Allfirst. The move was agreed at a lengthy session of the company's board last night, called to assess the implications of the fraud at their associate in Baltimore, Maryland.
In a statement after the meeting in Dublin, directors stressed their "extreme disquiet" that controls and supervision at the US bank had led to the huge loss.
The statement said that in future control of all treasury activities within the AIB group would be centralised in Dublin, and that "effective remedies" would be implemented as a matter of urgency.
The expert who will investigate the fraud has still to be named, but the bank said he would be "eminent and experienced persons" with a brief to report back to the board within 30 days.
Since confirming the extent of the alleged fraud early yesterday morning, AIB executives have repeatedly stressed that the incident poses no risk to the viability of the bank and have sought to reassure customers.
But the development has left huge credibility questions hovering over the bank's management.
Additional reporting by PA
