UK/GLOBAL - Alan Rubenstein, chairman of the National Association of Pension Funds' investment council, has said that Susan Keating, Allied Investment Banks' CEO of its US subsidiary Allfirst, should go in the wake of the Rusnak fraud.
Treasurer David Cronin, three senior executives and two middle managers at Allfirst have all been dismissed as a result of the bank's investigation into the unauthorised currency trades by John Rusnak which caused it to suffer losses of £483m. Rusnak was reporting to Cronin.
Allfirst's chairman, Frank Bramble, will retire early in June. AIB said he had no knowledge of the affair. But chief executive Keating will stay.
Rubenstein said: If she [Keating] did know what was going on she should go.
“If she didn't know what was going on, arguably, she shouldn't have been there in the first place ... from a corporate governance point of view, the buck stops with the chief executive.
Rubenstein added that it looked like AIB had let Rusnak trade from home even when on holiday and that continuity in his trading had allowed him to cover up his losses. Nick Leeson had operated in a similar way when he sunk Barings Bank.
By Luke Clancy
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers