National Australia Bank’s management had the wool pulled over their eyes by two former traders involved in the $326 million unauthorised trading scandal that rocked the bank in 2004, a court has been told.

The Victorian County Court heard that Vince Ficarra told his boss on the foreign exchange options desk, Luke Duffy, that he was not impartial to telling lies as the traders continued to hide losses by entering one-sided false trades.

Ficarra, 27, of North Fitzroy, and David Bullen, 34, of Eversley near Ballarat, have pleaded not guilty to charges of gaining financial advantage by deception.

In his summing up, crown prosecutor Dr Greg Lyon SC told the jury that Ficarra would have continued to try to trade his way out of trouble rather than crystallise the $12 million loss he had made by January 2004.

“He was putting planks over the abyss,” Dr Lyon said.

“(Ficarra and Bullen) had pulled the wool over management’s eyes.”

He said the defence had argued that if the bank had been gutsy and held on to the positions, things would have turned in their favour.

“It is contrary to evidence and just plain fanciful,” Dr Lyon said.

He said two junior traders on the desk, Vanessa McCallum and David Gentilin, were not a party to the manipulation of trades that were undertaken to take out volatility in the profit and loss account.

Duffy, 36, and another trader Gianni Gray, 35, had pleaded guilty in other courts and had been dealt with.

“Ms McCallum and Mr Gentilin were not comfortable and at least Ms McCallum had the courage and moral integrity to stay out,” Dr Lyon told Judge Geoff Chettle.

He said Ficarra could not hide behind the claim that he was only carrying out Duffy’s instructions.

“If Duffy was the mentor, if he was the leader, he was not one Ms McCallum slavishly followed,” Dr Lyon said.

“It’s treating us all as fools to suggest others on the trading desk could only learn from Duffy and that all sense of right and wrong is left at the door when you start your first job.”

He said Mr Gentilin blew the whistle on the phoney trades on January 9, 2004, by reporting to the global manager of the trading desk.

He said the trade value report for that day showed a loss of $160 million.

“That report is the smoking gun, a stark demonstration of what this was all about,” Dr Lyon said.

“Ficarra put through trade entries of $US9.7 million or a loss of $12 million.

“You can’t suggest that he didn’t fear for his own position, it is ridiculous to suggest that he thought he was acting honestly.”

Bullen, who is defending himself, said management was partly to blame for the way the desk behaved and this was shown by the departures of his immediate superiors, along with chief executive Frank Cicutto and chairman Charles Allen.

“You can’t say they lost their jobs because they were not responsible,” Bullen said.

He told the jury that he could see where the situation was heading as trading worsened but he did not attempt to leave the bank.

He said allegations that he acted dishonestly were incorrect assertions on his character and his actions.

“I consider it a better outcome to go to jail than to keep my job,” he said.

“Seemingly unfair things happen to undeserving people and I am only interested in avoiding rebirth as an animal or something worse in the next life.

“It would clear away bad karma going to jail so for me it will be even more beneficial.”

SOURCE: AAP

JON’S COMMENTS
This scandal has been discussed in Australia for a while now and honestly, I just can’t believe that it had gone unotice by management for that long! I could have traded better with my own strategy, Forex Fighter, than these 2. But I am surely not there to help banks make more profits!