NAB 'rogue' currency options trader receives 16-month prison sentence

LOSSES & LAWSUITS

Gray will serve a minimum of eight months, with a further eight months on release on recognisance of good behaviour. He was sentenced at the County Court of Victoria on April 6. Gray pleaded guilty to charges of dishonestly using his position as an employee of NAB to gain advantage for himself and others in February. The charges were brought by local regulatory body, the Australian Securities and Investments Commission (Asic) in December 2004.

Asic alleged that between October 1, 2003 and January 9, 2004, Gray aided, abetted, counselled and procured another foreign currency options trader in dishonestly entering and surrendering three fictitious FX spot trades. The trades totalled approximately A$117 million (US$85.5 million). In doing so, Asic claimed the foreign exchange options desk met its profit target of A$37 million for 2003–2004. Gray received a net performance bonus of £36,000 (approximately $80,000) that year while working in London for the bank, and helped secure bonuses for other members of the team. The true position was a loss of A$5 million.

Asic also alleged that between December 15, 2003 and January 9, 2004, Gray aided, abetted, counseled and procured another foreign currency options trader involved in dishonestly entering a fictitious options trade resulting in a false profit of US$111,457,876. In total, the fictitious profit created through the trading was A$178,561,516.

Gray's sentence was reduced in recognition of his guilty plea and that he had repaid the performance bonus to NAB. Among other things, he was also helped by his agreement to assist the prosecution and to give evidence against co-accused, David Bullen, former chief dealer in FX options and Vincent Ficarra, former options trader. Gray could have faced 26 months' imprisonment with a minimum of 15 months. OR&C

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