Extensive Analysis of Rusnak Activity
In 1993, a foreign currency trader, John Rusnak, was hired by Allfirst bank
in Maryland. Hiring Mr. Rusnak was the start of an idea that was forming in the
mind of Allfirst’s Treasurer Dan Cronin. The idea was to have a foreign exchange
trading center at Allfirst. John Rusnak was hired to bring profits to Allfirst via
proprietary foreign exchange trading. Prior to Rusnak’s arrival, foreign exchange
trading at the bank was limited to assisting bank customers in hedging against
currency risk. Allfirst performed this service for companies that were dealing with
overseas trades.
This decision would eventually incur a $691 million loss for Allied Irish
Bank, the owner of Allfirst bank. The story of this loss involves foreign exchange
trading, bank organization, organizational politics, human dynamics, work ethic,
inadequate accounting controls and more. This analysis will include a review of
foreign currency trading concepts, the strategies that Rusnak employed to trade and
to cover his losses, the findings of the Ludwig report and analysis of how this
transpired.

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http://www.publications.villanova.edu/Concept/2004/John_Rusnak.pdf
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