ASIC took 3 years to charge rogue Deutsche Bank trader

ASIC took 3 years to charge rogue Deutsche Bank trader


Donaldson’s conduct was first discovered by the investment bank in June 2014, and he was fired shortly thereafter.

But it wasn’t until 3 1/2 years years later, in December 2017, that he received a court attendance notice notifying him of the criminal charges.

He said it was 8am when the doorbell rang and he thought he was about to receive Christmas gifts he had ordered for his kids.

As he stood in the 40C heat, he felt dumbfounded. He had been previously advised by his own lawyers that there would be no criminal charges.

“I didn’t know what to think, I didn’t tell anybody. I didn’t tell my wife, I just bottled it up,” he said.

From trader to labourer

The court heard Donaldson’s world has collapsed around him. He was forced to sell his family home on Macpherson Street in the beachside suburb of Bronte in Sydney and another investment property, and live on the proceeds until the money ran out.

He pulled his children out of school and relocated to his native New Zealand, where he did general labouring work and drove trucks. He said he made 100 job applications in the meantime but he was unsuccessful because his name appeared in Google search results.

Recently he travelled to Madrid and Paris to do contract work as a data analyst before returning to Sydney to be sentenced.

Donaldson broke down in tears as he told the court it was difficult to be separated from his family in order to take on the overseas assignments.

When asked to describe his financial position right now, Donaldson responded: “Dire”.

Obsessed with economics and markets

The statement of facts filed in August last year said Donaldson was due to receive more than a $1.5 million bonus based on his inflated performance figure and he used the figure to shop around for a job at Japanese investment bank Nomura.

However last week Donaldson’s barrister Buchen tried to paint a different picture, arguing instead Donaldson decided to inflate the figure because he wanted to keep his trading position.

Donaldson said he was “obsessed” with the trading strategy he had developed, namely the era of very low interest rates would end and the value of US dollars would increase.

He told the court that around that time he lost his “moral compass” with the loss of his mother and the heavy drinking. He was also working up to 19 hours a day.

“Did you know the conduct at that time was criminal?” Donaldson’s barrister asked.

“No,” Donaldson replied.

“[You] must have known this was dishonest,” Judge Garry Neilson asked.

“I knew it was dishonest, your honour, I thought it was unethical.”

But he said he didn’t think his conduct was criminal because he believed he would eventually reverse the fictitious transactions.

Unsophisticated

Buchen said nobody actually lost money as a result of Donaldson’s conduct, but Donaldson “lost quite a deal”, he said.

Donaldson was “wiped out financially” as a result of the delay in the court proceedings and he had lost a career he had since he went to university, Buchen said.

When asked what his plans were, Donaldson said he desperately wanted to return to his family in New Zealand.

He never expected to work as a trader again, he said. Donaldson was permanently banned by ASIC from providing financial services in 2016.

Buchen said this case was a “world apart” from the National Australia Bank’s scandal more than 10 years ago and which affected every shareholder at NAB.

In that case one of the four traders, Luke Duffy, wassentenced to a minimum 16 months in jailfor falsely inflating the profits made on the trading desk to receive bigger bonuses.

Donaldson will be sentenced at a later date.

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