A "fairly sophisticated fraud" in its US subsidiary has cost the Republic of Ireland's largest bank $750 million in losses, its chief executive said. The situation was blamed on an unidentified trader with Allfirst Financial, the Baltimore-based division of Allied Irish Banks Ltd. (AIB), through phony options deals dating back as recently as last Christmas. The trader is described only as a Pennsylvania father of two with an annual salary of $85,000. He failed to report for work Monday and was not at home when FBI agents visited there. Analysts were assessing the likely fallout for AIB as its shares tumbled in value on the London and Dublin stock exchanges.
Deloitte Touche Tohmatsu said it will separate its consulting and auditing businesses. The New York-based firm is the last of the accounting industry's so-called Big Five to do so amid fierce debate over auditor independence that was sharpened by Arthur Andersen LLP's multiple ties to bankrupt Enron Corp. Deloitte Touche previously insisted that keeping the practices together provided better service to clients.
Berkshire Hathaway, investing guru Warren Buffet's holding company, announced it will post a fourth-quarter underwriting loss of $1 billion. General Re, a reinsurance subsidiary whose practices Buffet often has criticized, reportedly racked up the losses in coverage related to Enron's bankruptcy and the Sept. 11 terrorist attacks.
Fashion retailer Kasper A.S.L. filed for Chapter 11 bankruptcy protection in federal court in New York. The Secaucus, N.J., company, which sells women's business and evening wear under the Kasper, Anne Klein, and Albert Nippon labels in 3,200 department and specialty stores across the US, reported a loss of $40 million through last September on sales of $301 million.