Leeson, Nick (1967–)

NICK LEESON, the financial trader whose trading losses led to the collapse of Barings Bank, was born in Watford, Essex, England, the son of a plasterer. After leaving Parmiter's School, aged 18 in 1985, Leeson got a job working as an accounts clerk for the bank Coutts & Company settling checks. In June 1987, Leeson moved to the London branch of the American investment bank Morgan Stanley where he worked in the Settlements Division for Futures and Options. In June 1989, Leeson left Morgan Stanley, taking a job in the Settlements Division for Futures and Options of Barings Securities, the trading arm of Barings Bank, Great Britain's oldest merchant bank, founded more than 240 years ago in 1762.

Leeson created a reputation as a settlements expert after clearing a £100 million backlog of share certificates at the bank's Jakarta, Indonesia, office during 1990 and 1991. In the spring of 1992, Barings sent Leeson to work at the Singapore International Monetary Exchange (SIMEX). A year after arriving in Singapore, Leeson had made more than £10 million, approximately 10 percent of Baring's total profit for 1993, and earned a bonus of £130,000 in addition to his salary of £50,000. In reality, Leeson had taken huge losses, which he hid in a dormant error account. Leeson attempted to trade his way out of the situation.

However, his gamble failed spectacularly due to a downturn in the Asian financial markets that was exacerbated by the Kobe, Japan, earthquake; Leeson was left with losses of £208 million. He went on the run, fleeing to Malaysia and Borneo before attempting to return to the United Kingdom. On March 2, 1995, German police arrested Leeson at Frankfurt airport; he spent the next nine months in a Frankfurt jail resisting extradition to Singapore. An audit of Barings Singaporean operations revealed that Leeson had run up losses of £827 million, a sum nearly equal to the value of Baring's entire assets. Barings Bank collapsed on February 26, 1995, and was bought for £1 by the Dutch banking and insurance group ING.

A Bank of England investigation of the Barings collapse attributed the debacle to a failure of control. The report implicated numerous bank executives who chose to resign or were fired. On December 1, 1995, Leeson pleaded guilty to fraud and was sentenced to six-and-a-half years in Torah Merah prison, Changi, Singapore. While serving his prison sentence, Leeson published his autobiography, Rogue Trader, in which he condemned Barings for its failure to supervise his illicit trading activities.

In 1999, Leeson was diagnosed with cancer of the colon and released from prison on July 3having served three-and-a-half years of his sentence. On his arrival at London's Heathrow airport, the liquidators of Barings Bank served Leeson with an injunction for £100 million. In 2004, Leeson was making a living as an after-dinner speaker after completing an undergraduate degree in psychology at Middlesex University.