ALLFIRST: The lawyer for Mr David Cronin, the former head of treasury at Allfirst Bank in Baltimore, Maryland, has accused the bank of doing a "great disservice" to his client by dismissing him over massive losses in Allfirst's treasury operation.

Mr Michael Colglazier of Baltimore firm Hogan & Hartson also alleged that concerns that "political and institutional objectives" had influenced the outcome of the Ludwig inquiry appear to have been warranted.

The president and chief executive of Allfirst, Ms Susan Keating, was back in her office at Allfirst's Baltimore headquarters yesterday after the joint AIB-Allfirst board meeting in Dublin, which confirmed her in her job. She declined to give any interviews to the media. A bank spokesman said she was spending the day talking to employees and bank clients.

The Ludwig report is far from the end of the affair for Allfirst.

Officials from the US Federal Reserve are still on the premises conducting a joint investigation with the Maryland state bank regulators.

The FBI investigation into Mr John Rusnak's trading activities is also continuing.

Mr Cronin was told overnight of his dismissal as executive vice-president and treasurer of Allfirst, an Allfirst official said. Five other bank officials were also told overnight they had lost their jobs, following the completion of the board meetings in Dublin, which considered the Ludwig report into losses of $691 million (€783 million) through Mr Rusnak's trading.

"If one takes the position that any time fraud is committed, those in the chain of command must bear responsibility, David Cronin was in such chain of command, as were others whose employment was not terminated," Mr Colglazier said in a statement issued by his office that indicated a deep sense of betrayal felt by Mr Cronin over his treatment after a career serving AIB and Allfirst.

"If one does not embrace the illogic of such a perspective, then the bank has done a great disservice to a highly principled man whose business acumen and sense of integrity and loyalty has served the bank's interests for many years," the lawyer said.

Further comment must await study of the report and AIB's comments, Mr Colglazier added.

"At first blush, however, it appears that concerns about the lack of independence of the investigatory team and the overriding political and institutional objectives influencing the outcome of the investigation were warranted."

Asked to respond, an AIB spokeswoman said last night: "The culpability, responsibilities, and treatment of Mr Cronin have been fully dealt with in the Ludwig report and by the AIB board and doesn't warrant further comment."

Mr Rusnak refused to discuss the report or the dismissals at his home in a Baltimore suburb. His lawyer, Mr David Irwin, said: "I have no comment on Mr Ludwig's report or on the bank's actions. Our focus is necessarily on the continuing and deliberate investigation of the FBI and the US attorney's office."

Mr Rusnak has been interviewed several times by FBI agents whose report to the US attorney's office in Baltimore will form the basis of any criminal charge against him over fraudulent trades he entered in the Allfirst system. The US attorney's office does not expect charges to be filed anytime soon.

There was considerable surprise in Baltimore over the fact that Ms Keating, a high-profile banker from Los Angeles, survived as president and CEO of Allfirst. The Baltimore Sun and local analysts had predicted that she could not survive the inquiry into lack of controls that led to such massive losses at the bank that she runs.

In a written statement yesterday from Allfirst, Ms Keating said: "The report by Mr Ludwig was very thorough, and we're very glad to have the facts established and available to the public. We've learned some painful and important lessons, but none of our customers were affected, and Allfirst remains strong."

She said the bank was gratified by "the commitment of AIB to Allfirst and our management, and are confident about the value we have to offer to our customers.

"Allfirst employees have shown tremendous spirit, dedication and professionalism, and we are all squarely focused on moving forward to implement Mr Ludwig's recommendations and to build on the strengths of the Allfirst franchise."