Allied Banks

The case study focused on one of the biggest losses the financial world has ever seen. It surfaced on February, 2002, when Allied Irish and Allfirst suffered a (670) million dollar foreign exchange trading loss at the hands of a thirty-seven year old foreign exchange trader by the name of John Rusnak who was employed by Allfirst for (7) years. During 2001, Rusnak made bad trading decisions with regard to the increase in the value of the Japanese Yen and instead of confessing his problem to management, he tried to cover it up by fraudent means, which consitsed of falsified option trades & fake confirmations and acting as a proprietary trader. He took advantage of weak and inexperienced employees in the Treasury groups and when his losses became to high, he tried to make up for them by selling deep currency options to raise quick cash. But this did not work out because the company had to pay the client when the options matured. In the end, it was confirmed that the losses may have bee...