It emerged this week that Allied Irish Banks (AIB) is suing Citigroup and Bank of America over allegations that the two financial institutions assisted rogue trader, John Rusnak in covering up his spiralling foreign currency trading losses.
According to reports in the national and international media, the complaint, filed by AIB at Manhattan's federal court, claims that the banks 'carefully tailored their reporting to Allfirst (the AIB subsidiary for which Rusnak worked) to omit information concerning Allfirst's profits and losses'.
The lawsuit further alleges that Allfirst's compliance officers were tricked by Citigroup and Bank of America, which gave the foreign exchange trader $200 million in funds, disguised as profits from his trading activity.
Citigroup has responded by announcing that AIB's lawsuit is 'without merit'.
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