Andrew Alexander, 69, taught at Edinburgh’s Fettes College – where parents pay up to £28,000 a year in fees – from 1990 to 2012.
Mr Alexander, who moved to Fettes’ junior school, Inverleith House in 1991, told the Scottish Child Abuse Inquiry that a complaint was raised in 1992 about a teacher named Bill Steen who would get in the water at the end of swimming lessons and lark about.
Mr Alexander said: “At the end of swimming lessons (the teacher) would play as a shark and nibble legs.
“He sought to make swimming fun.
“He was a big avuncular presence, like a teddy bear.
“He had no sexual interest in any child and just wanted to make the time in the pool effective.”
Mr Alexander said the teacher retired in 1998 and the same year the complaint was resurrected by a parent.
A letter was sent in support of the swimming teacher signed by 32 sixth year and younger pupils.
However, the matter was reported to the police as the parent had complained to her MP but after lengthy investigation no further action was taken.
In 2015 a further police investigation began with a wider remit and Mr Alexander confirmed he had given evidence again, but told the inquiry he has heard nothing since.
Moving to another part of Mr Alexander’s experience of the senior school, QC Andrew Brown asked: “Do you remember there being slave auctions?”
Mr Alexander said: “I was not comfortable with it.
“I could see it being misinterpreted but it was based on Roman slaves and raised money for charity.”
Mr Alexander said the practice was for prefects in the sixth form to auction themselves off to be slaves for other pupils.
Later, Saffy Mirghani, 26, a former Fettes sixth form pupil from 2011 to 2013, spoke about the “casual racism” she experienced and the school’s mock “slave auctions”.
Ms Mirghni said: “I endured inhumane treatment from my opening time at the school.
“A white male pupil would not take a pencil from me because I am black. A white female pupil entered Fettes with me and it was easier for her to acclimatise.”
Miss Mirghani said that by the second year she had experienced a huge amount of racism.
Ms Mirghani, who described herself as academically very able and is currently studying for a doctorate in literature, said the racism she experienced in her first weeks at the school caused her work to suffer.
Subsequently, she claimed the teachers formed a poor opinion of her and this persisted till she left Fettes.
Previously the inquiry heard from a woman, who remains anonymous and was referred to as "Ellen", that her teacher at Fettes College made her go to his flat at the school under the guise of tuition, but then touched her knees and legs.
She told inquiry Judge Lady Smith he was "slobbering" on her neck, and added: "It was not unusual for masters to have relationships with girls."
Questioned by Mr Brown, she said she had been attacked by boys at her previous school before moving to Fettes in the 1980s.