A team from a major US bank flew from London to Dublin early last year to raise a disputed transaction made by Allfirst trader, John Rusnak, with senior AIB officials. This is according to a report in today's Irish Times.
The trade was described as an unusual one, and the visit to AIB was arranged after Mr Rusnak became belligerent and threatened not to do any more business with the American bank, the paper said.
The visit to Dublin by senior officials from an American bank was itself highly unusual and was undertaken only because it found the response from Mr Rusnak to their queries about the trade 'confusing and confounding', and felt that it needed to be discussed at a high level, the newspaper said.
The incident raises questions about why a red flag was not raised at AIB headquarters at that time about the activities of Mr Rusnak, who by this stage was hiding massive losses through counterfeit trades, and why AIB officials did not seek daily reports of Mr Rusnak's volumes.
The trade is understood to be one of four big option contracts taken out with four banks, Citibank, Deutsche Bank, Bank of America and Bank of New York to generate some $200 million to hide accumulating losses of $211 million in the previous year alone.
AIB last night declined an invitation to comment, saying it was premature to speculate on the contents of the investigation into Allfirst. It said the bank would refrain from further comment until the report was considered by the AIB board next week.
