Luke Duffy 5-156 NAB currency options trader jailed - Luke Duffy Australian Rogue Trader

5-156 NAB currency options trader jailed

Wednesday 15 June 2005

Mr Jeffrey Lucy, Chairman of the Australian Securities and Investments Commission (ASIC), today announced that Mr Luke Duffy, former head of the National Australia Bank Limited (NAB) foreign currency options desk (FX Options Desk), has been sentenced to 29 months imprisonment to serve a minimum of 16 months before release on a recognisance to be of good behaviour for a further 13 months, in relation to three charges brought by ASIC.

Mr Duffy, 35, of Albert Park, Victoria, was convicted and sentenced before Judge Chettle of the County Court of Victoria after pleading guilty to three charges of dishonestly using his position as an employee of NAB in order to gain advantages for himself and others.

ASIC alleged:
between 1 October 2003 and 9 January 2004, Mr Duffy was involved in dishonestly entering and surrendering a total of 12 fictitious foreign exchange spot trades totalling approximately AUD$117 million;
in the course of these fictitious trades, the FX Options Desk met its profit target of $37 million for the 2003-2004 when the true position was, in fact, a loss of $5 million and, as a result, Mr Duffy dishonestly received a net performance bonus of $129,338 (Mr Duffy repaid this amount to the NAB today) and helped secure bonuses for members of his team; and
between 15 December 2003 and 9 January 2004, Mr Duffy was involved in dishonestly entering seven fictitious options trades resulting in a false profit of US$111,457,876.
The total of the fictitious profit created by this trading was AUD$178,561,516.

In sentencing Mr Duffy, the Court reduced the sentence that would have been imposed otherwise by taking into account the fact he pleaded guilty at the earliest opportunity and that he has agreed to assist the prosecution and to give evidence against three co-accused.

‘This case demonstrates that senior employees who hold positions of trust and responsibility will be held accountable for any dishonest conduct and, especially where both the employer and shareholders are deceived, significant jail sentences will be imposed by the court’, Mr Lucy said.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
Background
The three charges were laid against Mr Duffy in December 2004. At the same time, ASIC also laid charges against Mr Gianni Gray, Mr Vincent Ficarra and Mr David Bullen.
Mr Gray and Mr Ficarra will next appear in the Melbourne Magistrates Court for a contested committal hearing on 1 August 2005. Neither Mr Gray or Mr Ficarra have been required to enter their pleas.

Mr Bullen is due to reappear in the County Court on 15 August 2005 for a trial. Mr Bullen has pleaded not guilty to the charges.