Former NAB forex traders to face charges

[mark_nelson]

Former NAB forex traders to face charges
07 January 2005

MELBOURNE: Four foreign exchange traders sacked by National Australia Bank Ltd. last March after a currency trading scandal cost it $A252 million face charges in a case that goes to court on January 25.


The Australian Securities and Investments Commission (ASIC) has charged two of the traders, Luke Duffy and Gianni Gray, with three charges each of using their positions dishonestly to gain advantage, the Melbourne Magistrates Court said yesterday.

The other two traders, David Bullen and Vince Ficarra, each face one charge of obtaining financial advantage by deception, the court said.

Using a position dishonestly to gain financial advantage is an offence under federal law which carries a maximum five year jail term. Obtaining financial advantage by deception is a crime in Victoria state with a maximum 10-year jail term.

NAB dismissed the four traders after an independent report into the trading scandal by accountants PricewaterhouseCoopers. ASIC began a probe into the matter shortly after the trading losses became public in mid-January.

http://www.stuff.co.nz/stuff/0,2106,3149740a6026,00.html

 

[clylbw]

...has charged two of the traders...with three charges each of using their positions dishonestly to gain advantage...The other two traders...each face one charge of obtaining financial advantage by deception...

Hmm...I wonder what exactly they have done?

 

[mark_nelson]

Hmm...I wonder what exactly they have done?

Well.. I found more information :

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Bank chief attacks 'arrogant and aggressive' staff
By James Moore (Filed: 13/03/2004)


National Australia Bank chief executive John Stewart yesterday slammed the "arrogant" and "aggressive" culture at the bank that led to A$360m (£147m) in foreign exchange trading losses.


John Stewart
The bank also fired the four traders at the centre of the scandal and their supervisor. Another four senior executives are leaving and the company said it would appoint two new directors with banking experience, one from the UK and one from Australia.

Mr Stewart was speaking after publication of a highly critical report by Price Waterhouse Coopers, the accountancy firm.

It revealed cover-ups and compliance failures that enabled the four, Gianni Gray in London and Luke Duffy, David Bullen and Vince Ficarra in Syndey, to exploit loopholes and hide losses to boost their annual bonuses.

The report detailed a culture where management abrogated responsibility and sought to suppress bad news while staff behaved in an aggressive and arrogant manner.

Mr Stewart said: "It is totally unacceptable that employees of the National breach policies and control limits. From now on, there will be a zero tolerance policy towards unauthorised limit breaches.

"Weaknesses in control procedures identified by PWC have been or will be rectified without delay. We will continue cultural change programmes that promote positive and transparent behaviour."

Mr Stewart, a former deputy chief executive of Barclays, was appointed chief executive after the scandal forced the resignation of Frank Cicutto. He was previously the bank's head of Europe, where NAB's businesses include the Yorkshire and Clydesdale banks.

The affair also resulted in the resignation of former chairman Charles Allen. The report found the traders concealed losses by shifting profits from one day to another. Later they processed false foreign exchange and currency option trades.

The report found they pocketed bonuses from A$120,000 (£49,000) to A$265,000 in 2003 as a result of their activities, with some also taking bonuses for 2001 and 2002.

"They did not behave honestly and we can only assume that they believed they would earn enough profit in the future to recover the concealed losses," the report said.

Rigorous daily checks will now be carried out on transactions with compliance staff on the lookout for large and unusual trades.

Mr Stewart also said the bank's remuneration structure would be altered and praised the whistleblowers who uncovered the scandal.

The trading losses remain under investigation by the Australian Prudential Regulation Authority, Securities & Investment Commission and the Australian Federal Police.

http://advertising.telegraph.co.uk/money/main.jhtml?xml=/money/2004/03/13/cnnab13.xml

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[mark_nelson]

Hmm...I wonder what exactly they have done?

and more:

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Bank chairman quits in Australia scandal
By Andrew Cave, Associate City Editor (Filed: 17/02/2004)


The foreign currency trading scandal at National Australia Bank claimed another high-profile victim yesterday when chairman Charles Allen announced his resignation.



Mr Allen, 67, who leaves with A$1m (£440,000) in director's fees and pension payments, said in a resignation letter "the chairman of a board is ultimately responsible for the reputation of that organisation".

He said his departure after 2.5 years as chairman was "in the best interests of the bank and its shareholders".

He stressed that the currency options issue was "a small part of a very large and successful international organisation".

Mr Allen's departure comes two weeks after Frank Cicutto quit as National's chief executive in the wake of the currency trading affair, which has cost National A$360m.

Mr Cicutto was replaced by former Woolwich building society chief executive John Stewart and National's new chairman will be Graham Kraehe, 61, a former chief executive of Australian wine group Southcorp and a non-executive director of National since 1997.

Mr Kraehe chairs National board's recently-created risk committee, which has been criticised by investors since news of the trading scandal emerged last month.

However, National defended Mr Kraehe's appointment, saying that day-to-day risk management was not the committee's responsibility.

Mr Kraehe said that his immediate focus would be dealing with the foreign currency options issue in "an open and transparent way".

One priority was to appoint two new directors, including one based in London, he said.

National, which owns Clydesdale Bank and Yorkshire Bank in Britain, shocked the stock market last month by saying it had discovered unauthorised trades in foreign-exchange options.

A fortnight ago, National said that the affair would result in A$185m of trading losses and a A$175m downward "revaluation" of the bank's foreign-exchange trading book.

Four currency options traders, including one based in London, have been suspended, pending the outcome of inquiries. No arrests have been made.

A Price Waterhouse Coopers report into the matter is due to be released next month.

http://advertising.telegraph.co.uk/money/main.jhtml?xml=/money/2004/02/17/cnoz17.xml

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[JumpOff]

......currency trading scandal at National Australia Bank claimed another high-profile victim yesterday ......who leaves with A$1m (£440,000) in director's fees and pension payments, ......

Snort!