The four traders at the centre of the National Australia Bank (NAB) FX options losses failed to attend a committal hearing at Melbourne Magistrates Court last week. However, a date of March 22 has been set for a further hearing, at which they are expected to enter pleas. The Australian Securities and Investments Commission (ASIC) has brought criminal charges against the four – Luke Duffy, David Bullen, Vincent Ficarra, and Gianni Gray – who were sacked by the bank following an investigation into their dealings that led to losses of Aud360 million.
The charges were brought following an ASIC investigation into the defendants’ alleged unauthorised trading in foreign exchange and foreign exchange options at NAB between September 2003 and January 2004.
In a statement, ASIC alleges that the defendants dishonestly used their positions as NAB employees with the intention of gaining advantages for themselves. It further alleges that the defendants obtained the advantages, which included performance bonuses, by falsely inflating profit figures maintained by NAB.
As the matter is currently before the Courts, ASIC says it will be making no further comment, however The Age newspaper, citing court documents, reports that Bullen, who was chief dealer on the bank’s Melbourne options desk, received a performance bonus of Aud83,044 for 2003. It adds that Gray, who was a senior options dealer on NAB’s London desk, received a bonus of Gbp36,000 and Ficarra, an options dealer in Melbourne, received an Aud46,350 bonus. The Age says that Duffy’s bonus was not revealed in the court papers.
Bullen and Ficarra face 19 charges under Australia’s Corporations Act and one criminal charge. Duffy and Gray face three offences under the Corporation’s Act.
NAB is still recovering from the fallout of the losses, which cost several senior managers at board and dealing room levels their jobs. The options desk was closed by the Australian Prudential Regulatory Authority (APRA) in the immediate aftermath of the losses, pending a series of actions based upon recommendations in its official report. Since Q2 2004, the bank has been able to back-to-back customer trades in the market, but it is still unable to trade for its own account until APRA approves its restructuring. "Out of 81 Actions, we have submitted over 60, and to date have had 24 closed out by APRA," a spokesperson told Profit & Loss recently.