AIB SETTLED CITIGROUP DISPUTE OVER RUSNAK AT FRACTION OF $872m CLAIM - AIB received only a fraction of the $872 million (€781.7 million) it had sought from Citigroup when it agreed last year to settle a 12½-year case against the US bank in relation to the John Rusnak trading scandal.
The Irish Times has established that the amount received by AIB under a settlement struck in January 2016 came to less than 5% of its original claim. The figure was accounted for in AIB's 2015 financial accounts under the section of "income on settlement of claims", which came to €38 million. It was not possible to ascertain the exact settlement amount. A spokesman for AIB declined to comment and a spokeswoman for Citigroup also declined to comment. Both parties had agreed as part of the settlement not to disclose the terms of the accord. AIB filed the original lawsuit in 2003 in Manhattan federal court in New York, claiming that units of Bank of America and Citigroup had joined Mr Rusnak's scheme in 2000 by opening accounts for him and that brokers at the US firms had helped conceal his losses, which ran to almost $700m. The losses were revealed in February 2002. Mr Rusnak pleaded guilty in 2002 to defrauding AIB's former US unit where he had worked, Allfirst Financial. He was sentenced to 7½ years in prison. AIB had accused Citigroup's Citibank unit, which was Allfirst's prime broker, of enabling Mr Rusnak's sham transactions, including disguised cash advances and fake trades.
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REVENUE HIRES 100 STAFF IN TAX EVASION CRACKDOWN - The Revenue Commissioners has boosted the number of staff focused on audit investigations and tax evasion by 100 since the start of the year.
However, almost two-thirds of them will first have to go through a two-year training programme, says the Irish Independent. Budget 2017 set out plans by the Government to target tax cheats who stash their money overseas. An extra €5m was set aside for the taxman to take on extra staff for audit and investigation activities, including tackling off-shore tax evasions, as well as enhancing ICT systems. More than 100 executive officers have been recruited into Revenue's ranks since the start of 2017 - 65 of whom were moved into a comprehensive two-year training programme. The balance went into a fast-track programme as they were already suitably qualified. "It is anticipated that these staff will commence full time audit and compliance activities from mid-2017," the now former Finance Minister Michael Noonan said recently, in response to a parliamentary question from Fianna Fáil's Michael McGrath. It was estimated that the extra cash brought into the State's coffers through this clampdown would be around €80m.
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DCC INCREASES EXECUTIVE BONUS LEVELS BY 71% TO OVER €3m - Support services group DCC paid out over €3m in performance-related bonuses to its top three executives last year, driving combined executive pay levels up from €8.54m to just under €11.5m.
The bonus move amounted to a 71.3% jump and followed a strong year of acquisition-led growth for the Dublin-headquartered business, says the Irish Examiner. Since the turn of the year DCC has made three large acquisitions including the recent agreement to buy Shell's commercial fuel business in Hong Kong and Macau; the €140m deal marking DCC’s first expansion in the energy services market outside of Europe. Last month, the London-listed and sterling-denominated DCC reported a 17.4% increase in annual revenues, for the year to the end of March, to £12.3 billion (€14 billion), with operating profit increasing by 21% to £345m, adjusted earnings per share up 18% at 286.59p and pre-tax profits up by 22.5% at £248.5m. It also recently announced that Tommy Breen will be stepping down as chief executive after nine years, in July, to be replaced by Donal Murphy, current head of DCC's energy division. The group's newly-published annual report shows that Mr Breen’s remuneration package jumped from €4.3m to €5.32m, driven by a 54.5% bonus increase to €1.36m. Mr Murphy's package jumped from €1.95m to just under €2.78m. His bonus payment went from €440,000 to €839,000.
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BARCLAYS HIRINGS UNDER US SCRUTINY - The US Department of Justice is scrutinising whether Barclays breached antitrust laws by promising to stop poaching JPMorgan Chase bankers, in another blow for the British lender’s chief executive, Jes Staley.
The DoJ asked Barclays for more information on discussions between its top brass and senior JPMorgan executives following a string of high-level departures from the US bank to its British rival. The hiring spree followed the appointment of Mr Staley, himself an alumnus of the Wall Street bank, as Barclays’ chief executive in December 2015. The Financial Times reported last year that Jamie Dimon, the head of JPMorgan, called John McFarlane, Barclays' chairman, to complain about the defections. The FT also said Mr Staley then spoke to Daniel Pinto, the head of JPMorgan's investment bank. The DoJ is examining whether Barclays entered into a so-called "no poach" agreement by promising not to hire more JPMorgan bankers, people familiar with the situation told the FT. Such agreements are illegal under US antitrust laws. JPMorgan said: "There have been no improper agreements and we continue to hire from each other." But the US bank declined to comment on whether it had been contacted by the authorities.
