AIB Bank is suing two American banks in connection with the John Rusnak fraud loss which cost the bank hundreds of millions of euros.
The bank is claiming €430 million as well as punitive damages from Citibank and Bank of America for allegedly assisting their former employee Rusnak to defraud them.
The suit has been filed in the Manhattan Federal Court, with AIB claiming that the two American banks allowed the rogue trader Rusnak to carry out the fraud by allowing him to pass massive trades through brokerage accounts they opened for him.
Between 1997 and 2001 Rusnak, a foreign exchange trader at AIB's then United States subsidiary Allfirst Bank, embroiled himself in a fraudulent scheme which cost the bank more than €740 million.
The fraud came to light early last year when officials at the bank realised that Rusnak had hidden his losses by forging a paper trail that made them appear to have been balanced by other trading.
Rusnak is now serving a seven-and-a-half year jail term after admitting his part in the fraud.
AIB goes on to allege that the two banks assisted Rusnak in his efforts to conceal his losses by tailoring their reporting to Allfirst, and omitting information concerning Allfirst's profits and losses.
A spokeswoman for Citigroup, Citibank's parent company, said the suit was without merit.
PA