PwC Investigation Into NAB Rogue Traders Concluded

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

15 March 2004

Following the conclusion of a two month review conducted by PricewaterhouseCoopers, in the wake of revelations that four of its traders had been responsible for unauthorised foreign currency options trading losses of A$360 million, National Australia Bank announced that it has dismissed three more senior executives.

In its report, PwC revealed that warnings about the activities of the rogue traders had gone unheeded, and that their manager knew that the four had breached their trading limits, but failed to take action.

It also suggested that a culture of "arrogance" was prevalent at the bank, and revealed that bad news was deliberately concealed from the board and senior management.

Although false transactions were discovered to have taken place in 2001, the situation took a turn for the worse late last year.

The four NAB staff in question had reportedly been trading heavily on the assumption that the Australian and New Zealand dollars would fall against the US dollar. As the US currency continued to slide, they tried to cover their errors with unauthorised extra trading.

Speaking to the international media, NAB's new chairman, Graham Kraehe announced that:

"No stone has been left unturned. From this day on National will need to be a new organisation. This has been a very unpleasant and unhappy phase in the bank's history."

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