US police reopen inquiry on copper trader's death

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The Independent Online
The Sumitomo copper scandal took on a potentially more gruesome turn yesterday after US police confirmed they were reopening their investigation into the death of a "whistleblower" in the case. The news came as the giant Japanese trading house denied that eventual losses from unauthorised copper dealing could reach $4bn (pounds 2.6bn), but said it would would appoint independent accounting and legal experts to assist in internal investigations into the $1.8bn loss.

Police in Vermont announced they would look again at the death of Paul Scully, a copper trader, shortly after he had voiced concerns about Yasuo Hamanaka, the Sumitomo trader at the centre of the scandal.

Mr Scully was killed when fire swept through his Vermont home five years ago. A police inquiry at the time failed to determine the exact cause of the fire, which burned Mr Scully beyond recognition. A final report suggested only that a burning cigarette may have been to blame.

Mr Scully had worked for the trading firm DLT Inc, whose chairman, David Threlkeld, has emerged as a putative hero in the Sumitomo scandal. Mr Threlkeld has claimed that he warned the London Metal Exchange in 1991 of his suspicions that Mr Hamanaka was conducting phoney copper trades. The first hint of trouble came after he received memos from Mr Scully pointing out several problems with trades executed by Mr Hamanaka.

Separately, Sumitomo said that, as well as appointing outside experts to assist enquiries into losses, it would start rotating traders every few years to prevent them acquiring too much influence in a particular section.