Paul McIntyre: Convicted trader looking after next life

Gee, it's tough being a Buddhist fighting charges of rogue currency trading for the National Australia Bank.

But such is the path for David Bullen, one of four Melbourne forex traders who have now been convicted for fabricating currency trades which cost the NAB A$360 million ($430 million) in 2004 and the scalps of its chairman, Charles Allen, and then-chief executive Frank Cicutto.

Cicutto's loss, in a Buddhist sense, became Ahmed Fahour's gain when the 39-year-old Citibank executive landed the gig of running the bank's Australian operations on an A$18 million package.

David Bullen's trajectory, however, is by far the most intriguing.

Before he and NAB colleague Vincent Vicarra were found guilty last week by a Victoria County Court jury on 31 charges of gaining financial advantage for them and others by deception, Bullen - who conducted his own defence - was a fountain of Buddhist wisdom.

During his final address to the jury, Bullen lobbed this pearler in trying to convince them that claims he acted dishonestly were incongruent aspersions on his character and actions: "I am only interested in avoiding rebirth as an animal or something worse in the next life," he said. "It would clear away bad karma going to jail so, for me, it will be even more beneficial."

At least Bullen's happy enough about his minimum 16-month prison term. NAB, however, is only just starting to crank up its revenge.

It is now preparing legal action to recoup A$500 million from two global broking houses for their alleged involvement in the scandal.

NAB claims Cantor Fitzgerald spin-off BGC International and ICAP were key players in helping the jailed options traders to hide false trades worth hundreds of millions of dollars.

The court case produced allegations that BGC and ICAP supplied NAB's market-risk operations with wrong revaluation quotes on real transactions, helping the convicted currency traders to falsely inflate profits and receive performance incentives.

Witnesses said the practice was so entrenched that NAB's traders would create a spreadsheet with the currency values they wanted to use, email it to the brokers where the spreadsheet would be attached to a new email and sent again to appear as though it was independently verified.

Bullen told the court that rates provided to brokers "were definitely manufactured to suit whatever the result that was required at the time".

And a former junior NAB currency options trader, Dennis Gentilin, widely considered to be the whistleblower on the dodgy trading and who still works for NAB, said the forex desk "had an arrangement" with external brokers who contributed in the process of incorrect pricing.

Bullen also speared NAB's market risk area for not uncovering the rigged rates. "They [the rates] were so far out it wasn't real," he told the court.

"A lot of them weren't realistic of where the market was. One call to another bank by market risk and they would know exactly what was going on."

The interesting bit in the relationship between currency brokers and the bank's currency traders, documented in Bullen's book Fake: My Life As A Rogue Trader, published shortly after the scandal became public, is just how much NAB's currency desk was schmoozed by the brokers to retain their fat trading fees.

Bullen never named the companies in his book but documents examples where brokers from Tokyo organised helicopters to transport his colleagues from Melbourne's CBD to a marquee at the Melbourne Cup in the suburbs, funded trips to international Grand Prix races and lobbed the not-so-infrequent bottle of prized Penfolds Grange wine their way.

Unsurprisingly, ICAP and BGC, which are both based in London, strongly deny any wrongdoing.

"BGC does not accept that it is responsible for the alleged losses caused by the conduct of the NAB traders and documented failings of NAB," a spokesman said this week.

NAB, of course has a very different view and is about to unleash a serious number of big-hitting lawyers on the case. More dirty trading to come, one suspects.

* Paul McIntyre is a Sydney journalist