US bank accused of defrauding taxpayers

The head of the National Treasury Management Agency has accused US investment bank State Street of defrauding Irish taxpayers of €3.2m when it divested a €4.7bn fund.

In 2011, the NTMA commissioned State Street Bank Europe in the UK to liquidate a €4.7bn fund. The proceeds were to be invested in Irish pillar banks. The NTMA agreed to pay a one-off fee of €698,000.

At the end of last year, a staff member of the National Pension Reserve Fund, which is part of the NTMA, contacted State Street following media reports there were problems at the bank.

It emerged three members of the team liquidating the fund siphoned off 0.7% of the proceeds, amounting to €2.6m. A further €600,000 was booked on the sale of an exchange-traded fund.

The claims surfaced when NTMA appeared before the Oireachtas Public Accounts Committee yesterday.