THE HIGH Court has ordered the examination here of an Irishman and former employee of Bank of America described as a "crucial witness" in US court proceedings by Allied Irish Banks plc against Bank of America and Citibank over $691 million (€507 million) losses incurred as a result of the activities of rogue trader John Rusnak.

Mr Justice Peter Kelly made an order yesterday that Kieran White, Prospect Hill, Donabate, Co Dublin, should attend before a barrister, on a date to be fixed, for the purpose of being asked questions about issues raised in AIB's lawsuit against the banks. The examination will be video-recorded and sent, together with any documents which may be produced, to the US courts.

Denis McDonald SC, for Bank of America, told the judge the application arose from the "very notorious dealings" of Mr Rusnak.

Counsel sought the examination order on the basis of an affidavit by solicitor Greg Glynn, of Arthur Cox solicitors, acting as agent for Bank of America. Mr Glynn exhibited a request from a New York judge, issued on the application of BOA, for the High Court to assist in obtaining Mr White's testimony.

Mr Glynn said there is a pending civil law suit arising from the discovery in February 2002 of some $691 million in alleged foreign exchange trading losses incurred by Allfirst Bank, then a wholly owned subsidiary of AIB.

Mr Glynn said AIB's complaint alleges that Rusnak, a former Allfirst trader, incurred these alleged losses from 1997 through 2002 and fraudulently concealed them from his superiors at Allfirst and AIB.

AIB was also alleging that, by no later than September 2000, BOA had "joined Mr Rusnak's scheme" and facilitated Mr Rusnak's fraud by concealing critical information from Allfirst until the fraud was uncovered in February 2002, Mr Glynn said.

AIB alleged, among other things, that BOA assisted in Mr Rusnak's fraud by "disguising" the funding element of a March 2001 option so that Allfirst was unaware of its true exposure, Mr Glynn said.

AIB alleged, as a result of this and other conduct on BOA's part, and in reasonable reliance on alleged insufficient information provided to Allfirst by BOA, that Alllfirst was unable to discover Mr Rusnak's fraud and was damaged by not stopping his trading sooner.

Mr Glynn said he was instructed by Mayer Brown solicitors, New York, the US counsel to BOA, that Mr White was employed by BOA during much of the relevant time "and was personally involved in some of the events at issue in the lawsuit".

He said BOA was seeking to examine Mr White in connection with some of BOA's defences against AIB's allegations and with BOA's counterclaims against AIB and other third-party defendants.

Mr Glynn said his firm and Mayer Brown had contacted Mr White and his counsel through e-mails, letters and phone calls between March and July last asking that he volunteer to appear for a deposition in the case but, to date, Mr White had not agreed to that request.