More heads roll in NAB scandal

THREE senior executives and five traders at National Australia Bank were sacked today after a report into the foreign exchange trading scandal which cost the bank A$360m (£150m) and has already claimed the scalps of its chief executive and chairman.

It follows a hard-hitting report by PricewaterhouseCoopers, which found a culture of arrogance among traders and a catalogue of weaknesses in controls. PwC said that, as far as it could determine, losses would not climb any higher.

Senior casualties today included Ian Scholes, a former high-flyer with Merrill Lynch and Citibank who headed NAB's corporate and institutional division; head of markets Ron Erdos, and risk management chief Chris Lewis.

Four traders, including London-based Gianni Gray, were summarily dismissed. They had been suspended since January. Their supervisor, Gary Dillon, was also fired.

The report is a further embarrassment to the bank which, when the scandal broke, tried to pin the blame on rogue actions by the traders acting alone - accusations the men have always denied.

PwC found the four 'exploited loopholes and weaknesses in systems and processes to hide trading losses and protect bonuses.'

In the markets division it found inadequate management supervision, significant gaps in back-office monitoring, weaknesses in control procedures, failure of risk management systems and an absence of appropriate financial controls. Former chief executive Frank Cicutto and chairman Charles Allen had already fallen on their swords.

Briton John Stewart, the former Barclays director who replaced Cicutto, announced a 'zero-tolerance policy' towards traders who breached limits in future. He was concerned about 'arrogant or aggressive attitudes towards others' exhibited by some staff.