'Rogue' trader pleads not guilty to fraud

John Rusnak has pleaded not guilty to seven charges of fraud relating to his time as a currency trader at the US subsidiary of Allied Irish Banks (AIB).

Mr Rusnak made a brief appearance at the US federal court in Baltimore.

"We are pleading not guilty to all counts," his attorney David Irwin said.

Mr Rusnak was charged in February with covering up $691m (£474m) of trading losses at Allfirst Financial, a Baltimore-based unit of AIB.

It is the biggest case of alleged fraudulent bank trading since Nick Leeson, a British trader who worked in Singapore for Barings Bank, made unauthorised trades that lost more than $1bn (£830m), and led to the bank's 1995 collapse.

Jail threat

Mr Rusnak was indicted by a federal grand jury in February charges of bank fraud, false entry in bank records and aiding and abetting.

If found guilty, Mr Rusnak faces up to 30 years in prison, a $1m fine, and five years of probation for each of the seven counts.

The indictment followed a four month investigation into trading at Allfirst Financial from 1997 to 2001.

Prosecutors said then they did not believe the trader actually profited from the trading losses unearthed by the inquiry.

Big bonuses

But, they said, he entered fictitious options trades into Allfirst's computerised record keeping system to make it appear that the bank was making money.

That meant that he could keep earning bonuses that were tied directly to his trading, they said.

Mr Rusnak earned more than $850,000 in five years - $550,000 of that amount was in bonuses.

The hearing set a trial date of 10 February next year.

"We're hoping to resolve matters before then," Mr Irwin told journalists after the hearing.