John Rusnak, the currency trader under investigation for losing USD750 million in foreign exchange trades at Allfirst, Allied Irish Bank's U.S. subsidiary, wanted to buy a new risk management system for the firm more than a year ago, but was turned down because of budget contraints. David Aaron, director of sales and marketing at DerivaTech, a risk management software vendor in New York, said Rusnak approached DerivaTech more than a year ago because he wanted to replace Allfirst's risk management software.
"John felt the risk management tools within the bank's existing systems at the time were not sufficient," Aaron noted. Purhasing new software may have prevented the trading losses Aaron said. Installing the DerivaTech software would have cost Allfirst less than 1% of the USD750 million it lost. Aaron said he did not know what software the bank had in place at the time or if the firm had bought software after backing out of the DerivaTech offer.
"John wasn't like a maverick that wanted to do his own thing. He understood he had reporting procedures and he was very concerned about the bank's risk tools," Aaron added.
Philip Hosmer, a spokesman at Allfirst, declined all comment. David Irwin and Bruce Lamdin, Rusnak's lawyers, did not return calls.
