The first of the four National Australia Bank (NAB) currency options traders to face trial in connection with the Aud 360 million (152 million) losses, Luke Duffy, has been sentenced to the full 29 months he faced, rather than the minimum term of 16 months.
The 35-year old trader pleaded guilty to three charges of dishonestly using his position for personal gain; with one of those charges alleging the he lied about the trading desk’s performance in order to heighten bonuses. Duffy admitted falsifying FX records to the tune of Aud 145 million between October 2003 and January 2004 (see Profit & Loss, March 2004/2005).
His sentence follows an 11-month investigation by the Australian Securities and Investments Commission (ASIC) into the alleged unauthorised trading in FX and FX options.
Fellow traders, London-based Gianni Gray and Vincent Ficarra of Melbourne, pleaded not guilty to 19 charges of dishonestly using their positions for gain, one criminal charge for deception. The fourth defendant, David Bullen, is facing the same 20 charges.
The scandal at NAB has cost several senior managers at board and dealing room levels their jobs. The bank’s options desk was closed by the Australian Prudential Regulatory Authority (APRA) immediately after the losses were made public.
Since Q2 2004, the bank has been able to back-to-back customer trades in the market, but for some time was still not allowed to trade for its own account until APRA approved of the restructuring (see Profit & Loss, March 2005).