AIB has dismissed six Allfirst employees following this morning's announcement of the findings and recommendations of its internal report into the Allfirst trading scandal, which lost the bank $691m.
Allfirst chairman Frank Bramble, whose retirement was agreed in January, will retire on June 1, while chief executive Susan Keating continues as CEO. AIB group treasurer Pat Ryan, whose retirement was also announced in January, will also retire in June.
The six dismissed include Allfirst's head of treasury David Cronin and Lawrence Smith, John Rusnak's immediate superior. Also fired are Bob Ray and Ian Palmer of Allfirst's treasury operations and Michael Husich and Lou Slifker of the internal audit team in Baltimore.
After two days of deliberations at the bank's headquarters in Dublin, the bank issued a statement to the stock exchange which said trader John Rusnak's activities 'did not receive the careful scrutiny they deserved'.
It was also revealed that AIB chairman Lochlann Quinn and chief executive Michael Buckley offered their resignations to the board during the meetings, but the board decided 'to reaffirm its full confidence in both men'.
Eugene Ludwig's report found that John Rusnak was involved in the falsification of bank records and documents but that nobody inside or outside AIB had any knowledge that fraudulent trading was occurring at Allfirst. The report also found that supervision at Allfirst was weak and failed to monitor Rusnak's trading over an extended period.
Mr Ludwig also found that at AIB Group level there was a lack of appreciation of the risks associated with hedge fund foreign exchange trading.
AIB has appointed Eugene Sheehy, formerly managing director AIB Republic of Ireland, as CEO of AIB USA and executive chairman designate of Allfirst. AIB has also said the positions of Chief Risk Officer and Head of Group Internal Audit will filled by external appointees. All proprietary, or speculative, trading at Allfirst and AIB's Polish divisions will cease.
AIB shares closed six cent higher to €13.11 in Dublin this evening. They had earlier fallen by over 20 cent.
