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To: c.hinton who wrote (82976)	3/7/2002 6:52:11 AM
From: long-gone	Respond to of 116815

Tuesday March 5, 7:55 am Eastern Time AIB to keep market waiting on fraud report By Kevin Smith DUBLIN, March 5 (Reuters) - Allied Irish Banks (quote from Yahoo! UK & Ireland: ALBK.L) is expected to keep the market on tenterhooks next week while it digests one of the year's most keenly-anticipated documents -- a report into the trading scandal that cost it $691 million. A spokesman told Reuters on Tuesday the bank would not make any comment before it had digested the report, due this weekend, on a suspected fraud by a rogue trader at its U.S. subsidiary Allfirst Financial Inc. AIB last month appointed senior U.S. banker Eugene Ludwig to head an investigation into the affair -- one of the biggest trading scandals since Nick Leeson brought down Barings Bank. Ludwig, a former comptroller of the U.S. currency, is due to deliver the report on his findings to AIB on Saturday. ``The board will hold sessions over a few days to digest and discuss the report and make decisions based upon it,'' an AIB spokesman told Reuters. The bank expects to hold a news conference in Dublin by the middle of the week, he added. AIB stunned investors and shocked the world financial community earlier this month when it revealed that John Rusnak, a trader at its Allfirst unit in Baltimore, had lost a fortune through unauthorised currency deals. The bank, which later acknowledged that some of the losses dated back five years, said Rusnak had forged documents to make it appear as though he had hedged the risk on his transactions. The scandal, which more than halved AIB's 2001 attributable profit and hammered its share price, raised further worrying questions about financial controls in the wake of the bankruptcy and subsequent investigation of U.S. energy trading group Enron. MARKET NEEDS Ludwig's report will focus on gaps in the bank's security which allowed Rusnak to carry out currency deals -- largely in dollar/yen -- up to 400 times in excess of his notional risk limit and on how he was able to bypass supervision for so long. AIB management has faced mounting criticism over the affair, with media reports speculating that heads will roll -- at the very least those of the two top executives at Allfirst, Chairman Frank Bramble and Chief Executive Susan Keating. Banking analyst Scott Rankin at Davy Stockbrokers in Dublin said the market was awaiting the report with interest. ``We want a clear explanation as to what went on and how it happened. Hopefully it will present the bank in as positive a light as possible, reinforcing their contention that it was a deliberate and complicated fraud that happened despite adequate security,'' he said. ``Presumably blame will have to be attached and the bank will have to deal with that as it sees fit,'' he added. AIB will be hoping the report is able to indicate whether Rusnak or an accomplice benefited from his dealing -- a key factor in whether it could claim insurance on the losses. Through his lawyers Rusnak has denied stealing money, and he has not so far been charged with any crime. However, the offence of falsifying documents -- which AIB says he did to cover his tracks -- carries a potential 30-year jail sentence and a $1 million fine. The report may also deal with AIB concerns that Rusnak may have been assisted in the fraud by others, both inside and outside the bank. A London-based newspaper reported recently that investigators had found electronic mails appearing to show collusion with a currency dealer at Citibank (NYSE:C - news). biz.yahoo.com