Less than 30 months after the world was told that four rogue traders
had racked up $360 million in losses for the National Australia Bank,
we have closure. And what a remarkable series of changes they are.

Firstly and most importantly, the four prime conspirators are doing
porridge. Two of them,
Luke Duffy and Gianni Gray, will enjoy Christmas with their families
after pleading guilty and getting relatively short sentences while the
other two, David
Bullen and Vince Ficarra, received longer sentences yesterday after
fighting the charges. The final roll demonstrates the benefits of plea

Luke Duffy: most responsible but minimum sentence of only 16 months
Gianni Gray: second most responsible but minimum sentence only 8 months
David Bullen: second least responsible but longest minimum sentence of 30 months
Vince Ficarra: least responsible but minimum sentence still 15 months

The 7.30 Report’s Heather Ewart put together an entertaining story last night, complete with background music from Eminem if you get a chance to listen to the audio.

However, she didn’t use my grab congratulating ASIC and everyone
involved on a tremendous outcome in corporate accountability. It’s
worth looking back at the Homeside debacle of 2001 when NAB lost almost
$4 billion.
The only accountability for this episode was the firing of Homeside’s
two top executives with payouts of more than $10 million between them.
Even the auditor KPMG was re-appointed.

Contrast that with this roll call of spilt blood and accountability since January 2004:

13 January:
scandal first publicly announced
2 February: Frank Cicutto sacked and John Stewart appointed new CEO
16 February: Charles Allen resigns and Graham Kraehe appointed new
12 March: NAB releases response to PwC investigation and fires four of its
top 12 executives
26 March: gang of seven directors announce proposal to call EGM to sack
Cathy Walter
2 April: CFO Richard McKinnon announces retirement
7 April: NAB announces KPMG to be replaced as auditor
5 May: directors Ken Moss and Ed Tweddell announce intention to retire
in three months
7 May: Cathy Walter resigns from board so EGM to sack her cancelled
21 June: Wesfarmers CEO Michael Chaney joins board and announced as new
chairman from September 2005
11 August: Ahmed Fahour and Michael Ullmer recruited and announced as
John Stewart’s two new heir apparents

If anything, all of this was too big a reaction and the way APRA closed
down NAB’s forex options trading desk was a gross over-reaction. A $60
billion bank losing $360 million is small beer, it’s just that we all
have a fascination with hard-living, big-drinking blokes losing money
in the global forex casino and APRA wanted to “send a message” about
how tough it was after completely missing the HIH collapse.

The 7.30 Report got hold of some taped conversations between the
traders as they were covering up their misdeeds and head trader Luke
Duffy said the following to Gianni Gray in London:

I would suggest a f-cking custodial stay is fairly unlikely. You’ll probably get
a few thousand hours of f-cking community service so you’ll spend the next ten
years painting a f-cking scouts hall. I mean how bad can that be? Keep fit, get
a bit of sun. (Laughs)

He deserves no sympathy.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey