John Rusnack

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John Rusnak was in the center of the huge fraud that rocked the Allied Irish Bank and was the fourth largest banking disaster ever with losses close to$700 million. Although Nick Leeson did a better job andlost more and took down Barings, AIB is still trading. John Rusnac worked in Allfirst in Boston, a regional bank owned by Allied Irish Bank, he was 37 years old with 2 daughters and was described as a "pillar of the community". Basically Rusnak thought the Yen would strengthen against the dollar but this didn't happen. Traders commonly take out options as well to provide some insurance against the market not going the way they estimated. Although the bank thought these options were purchased, as their internal systems showed, they weren’t actually bought. Therefore, there was no insurance against the loss. So why did the banks internal controls not stop this? As banks often use a dealing system such as Bloomberg to trade and seperately put the trades into the internal system, ficticious trades can be enetered. However its common practice to require two people to enter deals in a good deal capture system, one to enter it and another user, preferably a manager to authorise it. This would mean that two people would have to be involved to create a ficticious deal. Its clear that this may not have been done, or the controls were undermined. Whatever happened to Rusnak. Well I don't know, but I reckon he's not working for AIB anymore.

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