US reopens copper trader death inquiry
Tuesday 25 June 1996
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.
Managers of commodity trading sections will be prevented from staying in their posts for more than four years, while their subordinates will be able to stay no longer than three years.
The reverberations of the scandal continued to hit copper prices, which yesterday tested lows not seen for more than two years.
In New York, the metal fell to a 28-month low in brisk early trade, after tumbling on the London Metal Exchange. Three months' copper settled at $1,788 in London, down $102 from Friday's close, after touching $1,785 at one stage, a level last reached two and a half years ago.
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