Allfirst Vice President among six to get the chop
Six executives of the AIB subsidiary Allfirst, including its Vice President and Treasurer David Cronin, have been sacked following the publication of the Ludwig Report.
A statement released this morning has also revealed that Allfirst directors Jerry Casey and Tom Mulcahy have stepped down. It further reveals that AIB’s Irish chiefs Michael Buckley and Lochlann Quinn offered to resign, but the Board agreed to unanimously endorse the positions of both men.
The report is highly critical that the Allfirst treasurer and his treasury funds management failed for extended periods to monitor Rusnak’s trading. As a result six senior executives in this area were dismissed.
In addition to Cronin, they included Jan Palmer, Senior Vice President, Treasury Operations Administration, Allfirst, Robert Ray, Senior Vice President, Treasury Funds Management, Allfirst, Lawrence Smith, Assistant Vice President, Operations and Financial Analysis, Allfirst Treasury, Michael Husich, Head of Internal Audit, Allfirst, and Lou Slifker, Team Leader, Internal Audit, Allfirst.
The Ludwig Report found that the fraud was carefully and meticulously planned by John Rusnak over a lengthy period of time. He circumvented the controls intended to prevent such frauds. However, Mr Ludwig insists that nothing has come to light to suggest that anyone outside the Allfirst Treasury Group was involved in the scam.
The report’s author, Eugene Ludwig says he believes they understand the fraud and where it led. "Our report is critical of certain internal controls at Allfirst and a number of individuals in these structures, particularly at Allfirst Treasury," he said.
"We have made some strong recommendations in that regard. I am cheered that the AIB and Allfirst Boards and management are adopting those recommendations. It is also important to recognise that Allfirst and AIB are financially healthy, solid organisations and they are fully capable of dealing with the loss and implementing our recommendations to strengthen their respective control structures while maintaining strong capital levels."
AIB Group Chief Executive, Michael Buckley said: "The management team is fully committed to implementing the decisions of the Board in a timely and comprehensive fashion. Our task is to build shareholder value and protect the integrity of our franchise for customers and staff. This is my absolute and urgent priority."
AIB Group Chairman, Lochlann Quinn said: "AIB has already begun the task of undoing the damage caused by the fraud perpetrated at Allfirst. We have learned lessons from the serious breakdown in our controls, which has enabled these losses to occur."
