Rogue trader pleads guilty to $700m fraud
John Rusnak, the former currency trader, has pleaded guilty to bank fraud, which cost Allied Irish Bank $692m in trading losses.
Rusnak ran up the losses over a five-year period while working at Allfirst Financial, a US subsidiary of AIB.
His crime, for which he has received a seven-and-a-half year prison sentence. ranks alongside the losses generated by fellow rogue trader Nick Leeson, whose illicit dealings brought down Britain’s oldest merchant bank, Barings, in 1995.
The scandal broke in February this year when AIB called in the FBI to investigate a multi-million dollar fraud in one of its US subsidiaries. Investigations revealed the suspected fraud at Allfirst in Baltimore had cost its treasury division $750m.
A decision on whether Rusnak will have to pay back any of the money he gained to Allfirst will be decided by a court hearing in January.
Last month AIB agreed to sell Allfirst to the regional US bank M&T Corporation in a deal worth $3.1bn.