An interview with Nick Leeson, the derivatives trader notorious for bankrupting Barings Bank

Nick Leeson was born in Watford, Hertfordshire and attended Parmiter’s School in nearby Garston. Born to working-class parents on a council estate, his father was a self-employed plasterer, his mother a nurse. In this interview, Nick speaks with Doc and talks about his introduction to city life, before going east to Singapore where his final demise took place.


 

 
Exclusive interview by @DDS_DocHoliday

In the mid-1980s, Nick Leeson landed a job as a clerk with royal bank Coutts, followed by a string of positions with other banks, ending up at Barings, where he quickly made an impression and was promoted to the trading floor.

Before long, Nick was appointed the manager of a new operation in futures markets on the Singapore Monetary Exchange (SIMEX) and was soon making millions for Barings by betting on the future direction of the Nikkei Index. His bosses back in London, who viewed his large profits with glee, trusted the whizzkid. Leeson and his wife Lisa seemed to have everything: a salary of £50,000 with bonuses of up to £150,000, weekends in exotic places, a smart apartment, frequent parties and to top it all they seemed to be very much in love.

Barings wasn’t aware that it was exposed to any losses because Leeson claimed that he was executing purchase orders on behalf of a client. What the company did not realise, is that it was responsible for the 88888 error account where Leeson hid all of his losses. This account had been set up to cover up a mistake made by an inexperienced team member, which led to a loss of £20,000. Leeson now used this account to cover his own mounting losses.

As the losses grew, Leeson requested extra funds to continue trading, hoping to extricate himself from the mess by more deals. Over three months he bought more than 20,000 futures contracts worth about $180,000 each in a vain attempt to move the market. Some three quarters of the $1.3 billion he lost Barings resulted from these trades. When Barings executives discovered what had happened, they informed the Bank of England that Barings was effectively bust. In his wake Nick Leeson had wiped out the 233 year old Baring investment Bank, who proudly counted HM The Queen as a client. The $1.3 billion dollars of liabilities he had run up was more than the entire capital and reserves of the bank.

Eventually arrested in Frankfurt, Germany, Nick spent a few fraught months trying to escape extradition to Singapore. He failed and in December 1995 a court in Singapore sentenced him to six and a half years in prison. Lisa his wife got a job as an air hostess to be able to visit him regularly. At first, their marriage survived the strain of being apart, but she eventually divorced him. Within months, Leeson was diagnosed as suffering from cancer of the colon. His weight plummeted and most of his hair fell out from chemotherapy.

Finally released in 1999, and despite his return to the UK bringing a realisation that the high life had been swept away — he was effectively homeless and without a job — Nick enjoyed a fairly hedonistic first year seeing friends and family but also continuing his cancer treatment.

Nick Leeson has proved his resilience and has been able to capitalise on his experiences. He was paid a substantial fee for the newspaper serialisation of his book in The Mail. The story was then turned into a film, Rogue Trader, starring Ewan McGregor. During 2001 he undertook a Psychology degree and Nick now spends his time delivering conference and keynote talks to companies and undertaking after-dinner speaking based on his life experiences.

https://www.nickleeson.com/biography/

Exclusive interview by @DDS_DocHoliday

Main image copyright Daily Mirror


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