Investigators believe US$750 million (HK$5.8 billion) in currency trading losses at Allied Irish Bank's US subsidiary may have been racked up by a rogue trader's attempts to cover up his mistakes rather than steal the money. The trader at the centre of the alleged fraud, 37-year-old John Rusnak, surrendered to authorities yesterday. He has not been charged and his lawyer said he was co-operating with the FBI. An FBI official said: 'Nothing is being ruled out but we are looking at avenues beyond straight-forward embezzlement.' AIB, Ireland's largest bank, said the case involved massive losses racked up via US dollar-yen deals conducted through its Allfirst Financial office in Baltimore. The bank said Rusnak tried to disguise losses by creating fictitious contracts to make it appear he was hedging his bets when in fact he was gambling hugely on the yen's rise. When the dollar continued to climb against the yen, the losses were enormous. The alleged fraud went on from early last year until just after Christmas, AIB said. Middle managers had confronted the trader by telephone last weekend when the magnitude of the phoney deals was discovered. AIB's director for finance and risk, Gary Kennedy, said 'alarm bells went off' when the trader did not return calls on Sunday night and failed to arrive for work on Monday morning. Allfirst has suspended several senior officials in addition to Rusnak as it carries out its own probe. AIB was to hold a crisis board meeting yesterday at its Dublin head office to try to determine 'the complexity of what is involved', chairman Lochlann Quinn said.
