Bank firm on $645m forex compo claim

SYDNEY - National Australia Bank (NAB) yesterday stood by its seven-month-old demand for more than A$539 million ($645 million) in compensation from two global currency brokers over a trading scandal that rocked the bank.

The confirmation came after a jury on Saturday found two former NAB foreign exchange options traders guilty of charges relating to a trading debacle that cost Australia's biggest bank by assets $A252 million and led to top-level resignations.

Two other former NAB traders have already been jailed.

A NAB statement in November said it had issued letters of demand for compensation against ICAP Plc, the world's largest interbank broker, and another broker.

ICAP said at the time neither ICAP nor TFS-ICAP, a Singapore subsidiary, accepted any responsibility for the NAB currency trading losses and intended to "vigorously contest any claim".

The spokesman for the other broker, BGC Partners, said yesterday that the company "doesn't accept it was responsible for the alleged losses caused by the conduct of the NAB traders and the documented failures of NAB management".

BGC Partners was spun off from Cantor Fitzgerald, a financial services provider to the institutional equity and fixed income markets, the BGC Web site www.bgcpartners.com said.

NAB had alleged that revaluation data supplied by an individual within TFS-ICAP had helped to hide foreign exchange trading losses built up by traders, ICAP said in November.

"The compensation claim still stands," a NAB spokeswoman said yesterday.

NAB had said in the statement on November 10 that it might sue. "While the National would prefer to resolve its claims against those parties by negotiation, it may be necessary for it to bring legal proceedings against them to enforce its rights," it said.

David Bullen, 34, and Vince Ficarra, 27, were each found guilty in a Victoria state court on Saturday of multiple counts of gaining financial advantage and one count of gaining financial advantage by deception. They will be sentenced at a later date.

The court was told during the five-week trial that Bullen and Ficarra had entered fictitious trades to hide mounting losses. Both said they believed the manipulation had been a common practice and that they were acting under instructions.

In June 2005, the former head of the desk, Luke Duffy, was sentenced to 29 months in prison after pleading guilty to charges related to the scandal. A fourth trader, Gianni Gray, was sentenced to 16 months in jail in April this year.

Australia's banking watchdog, the Australian Prudential Regulatory Authority, ordered NAB in March 2004 to tighten slack risk controls and said management had ignored signs of irregular trading practices on its currency options desk.

- REUTERS