Allfirst probe: Trader 'may still be in area'
AIB chief executive Michael Buckley said the American trader at the centre of a fraud investigation into one of the bank's US subsidiaries - may still be in the area.
The man was based in the Allfirst trading room in Baltimore and had worked for the company for seven years. He failed to report for work on Monday, when details of the suspected €866m fraud began to emerge.
‘‘We have indications that he is still in the Baltimore area, but he has not been located yet and the FBI are helping in this,’’ said Mr Buckley.
The AIB chief said there were some indications that there may have been some collusion with the individual involved ‘‘by either somebody else within the organisation, or with some external parties.
‘‘The investigation into how this happened is still going on. We have concentrated so far on discovering how much money is involved. That is our first responsibility - then to notify our shareholders and the markets as soon as possible, which is what we have done.’’
He admitted that it was ‘‘alarming’’ that the suspect trader’s superiors had not known what he had been doing.
‘‘The nature of this fraud was very complex. We have a very adequate series of checks and balances, in the same way that a house has a very good alarm system.
‘‘But someone who is determined and very expert and in a position to overcome that system can do it.’’
He said the trader had been ‘‘using artificially created trades to offset losses he had been making on real trades’’.
One of the suspended personnel was Irish - the rest were American.
Mr Buckley added: ‘‘This has been a blow, but AIB is still very strong capitalised. The basis under which it is doing business has not been undermined.
‘‘My job now is to try to rebuild the damage that has been done. We have no fears about our controls situation in any other part of our treasury operation.
‘‘Where it hurts is in the profits we would be reporting for 2001. It’s a once-off hit which is very painful, which we will deal with and which we will learn lessons from.
‘‘But it does not impair our ability to generate profit from our core business.’’
Mr Buckley said the bank’s investigation began a few weeks ago and came to a head last weekend.
‘‘I was informed on Monday night. We sent out a team from our treasury on the first plane yesterday.
‘‘The extent and size of this only crystalised in the last few days.’’
