Nick Leeson – 1995

By | November 12, 2016

Rogue Trader

nick-leeson

Nick Leeson arrives in Singapore after being extradited from Germany

THE CRIME:

Anonymous traders trade millions each day on stock markets around the world. Their actions are, for the most part, unknown. That changed in 1995 when a derivatives trader by the name of Nick Leeson caused the collapse of Barings Bank, the oldest of the United Kingdom’s investment banks.

Leeson was born in Watford, Hertfordshire on 25 February 1967 and joined Coutts & Co bank on leaving school. In 1992 he became general manager of a new operation in futures markets on the Singapore International Monetary Exchange for Barings Bank. At first all went well and Leeson made £10 million for his employer, earning a bonus of £130,000. Then things went disastrously wrong and Leeson tried to cover his tracks by using an error account (an account specifically set up to correct mistakes made in trading). At the end of 1992 the error account had lost £2 million. By the end of 1994 the figure stood at £208 million.

On 16 January 1995 Leeson gambled on the Nikkei Japanese stock market remaining relatively static. An earthquake hit Kobe the next day and the value of shares on the Japanese stock market plummeted. Leeson then bet on a recovery but the shares went lower still. On 23 February Leeson scribbled, “I’m sorry” on a piece of paper and fled the country. Three days later, the bank’s losses stood at £827 million and it was declared insolvent. On 2 March 1995 Leeson was extradited from Germany and charged with fraud. On 2 December he was sentenced to six and a half years in Tanah Merah prison in Singapore.

WHERE:

Singapore

WHEN:

Thursday 23 February 1995

THE AFTERMATH:

In prison in 1996 Leeson wrote his autobiography Rogue Trader, later made into a film starring Ewan McGregor and Anna Friel. One reviewer described it as “a dreary book, written by a young man very taken with himself.” Leeson was released from prison on 3 July 1999, suffering from colon cancer. On 26 April 2001 he was banned from driving for 30 months for being almost three times over the legal alcohol limit. He is presently CEO of Irish football club, Galway United.

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