NAB rogue FX trader gaoled

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NAB rogue FX trader gaoled

The former head of National Australia Bank's foreign currency options desk has been given a 29-month gaol sentence for his part in last year's A$360 million rogue trading scandal.
Luke Duffy, 35, was convicted and sentenced before Judge Chettle of the County Court of Victoria after pleading guilty to three counts of dishonestly using his job at the bank to gain financial advantages for himself and others.

Duffy is one of the four traders charged by the Australian Securities and Investments Commission (ASIC) after they were fired over the scandal, which resulted in NAB posting A$252 million in unauthorised trading losses and claimed the scalps of former NAB chief executive Frank Cicutto and chairman Charles Allen.

Duffy, along with the three other traders charged, falsely claimed the FX options desk met its profit target of A$37 million for 2003-2004 when the true position was, in fact, a loss of A$5 million. As a result, Duffy dishonestly received a net performance bonus of A$129,338 and helped secure bonuses for members of his team.

ASIC says Duffy has since returned his bonus to the bank.

An investigation by PricewaterhouseCoopers into the unauthorised trading losses, which was published last year, found that traders exploited loopholes in the bank's inhouse currency options trading system, Horizon, to cover up illegal trading activity.

Duffy was sentenced to serve a minimum 16 months, before release on recognisance for a further 13 months. Duffy's lawyer told reporters that he would appeal the sentence as soon as possible. Two of his former colleagues - Gianni Gray and Vincent Ficarra - have reserved their pleas while the third, David Bullen, has pleaded not guilty to the charges. All three are due to appear in court in August.