Former NAB Forex Traders Found Guilty

by Mary Swire, for LawAndTax-News.com, Hong Kong

30 May 2006

Australia's securities regulator, the Australian Securities and Investment Commission, announced this week that two former National Australia Bank (NAB) foreign currency options traders have been found guilty of dishonestly using their positions as employees of NAB in order to gain an advantage for themselves and others.

After a five-week trial, David Matthew Bullen was found guilty by a jury in the County Court of Victoria on all but two of the charges brought against him, and Vincent Adam Ficarra was found guilty on all charges brought against him.

The charges against Mr Bullen and Mr Ficarra relate to the entry of foreign exchange spot trades on the FX Currency Options desk, which had the effect of falsely inflating profits and/or hiding losses between October 2003 and January 2004.

As a result of the fictitious trades, on 1 October 2003, the Currency Options Desk falsely reported to the NAB that it had reached its 2002/2003 profit target of $37 million, when the true position was in fact a loss of $5 million. Mr Bullen and Mr Ficarra subsequently received net performance bonuses of $83,044 and $46,350 respectively, such bonuses being paid substantially upon the purported achievement of the profit target.

By 13 January 2004, when the fictitious trades were discovered by NAB, the loss incurred was approximately $160 million.

The two men have been remanded in custody to reappear in the County Court for sentencing on 26 June 2006.

‘This result shows that senior employees who breach their duties as officers of a company can cause significant damage to the company’s interests and shareholder value. ASIC will not tolerate dishonest conduct by company officers, and as yesterday’s decision by the jury demonstrates, the community will not tolerate dishonest conduct either’, ASIC Chairman, Jeffrey Lucy said.

All of the former traders charged as part of ASIC’s investigation into unauthorised trading on the NAB’s foreign exchange (FX) Currency Options Desk between September 2003 – January 2004 have either now been found guilty, or pleaded guilty.

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