In 1989, Nick Leeson started working at the Barings Bank. He slowly rose up the ranks there and was noticed by many. In 1992, he was asked to lead a relatively new operation, futures market, on Singapore International Monetary Exchange.
He was transferred to Singapore for this role. However, Leeson had been denied a broker’s license earlier in the United Kingdom due to application fraud. This crucial fact wasn’t disclosed to relevant authorities when Leeson moved to Singapore. The bank covered up for him too.
Year 1992 onwards, Leeson began trading. These speculative investments earned massive profits for the bank, almost clocking 10% of its profit for that fiscal year. His bonus for the money he made was almost thrice his salary.
Things turned sour when Leeson’s methods came to light. He used one of the bank’s error accounts to cover up his losses. On the pretext of covering up a colleague’s error, he persisted in using this account for other loss-bearing trades.
His position at Barings Bank was that of the chief trader and the settler of trades – two jobs which are usually handled by different people. A powerful position like this made it easier for Leeson to hide his mistakes and subsequent losses from the management.
His trading mistakes continued well into 1995. In 1992, the losses had amounted to more than £2 million and touched £208 million towards the end of 1994, and they only continued to increase by the day.
Things came crumbling down in January 1995 when Leeson made some unprecedented choices in the Singapore and Tokyo stock exchanges. He bet that no drastic changes would occur overnight in Japan, but the Kobe earthquake hit the island country and trading markets collapsed in Asia.
Leeson’s trades plummeted further. He decided to take a long shot and make an attempt towards recovery by using long-term arbitrage. None of his plans materialized and stocks plummeted further.
He decided to run away from the situation and escaped from Singapore on February 23. His note read ‘I’m Sorry’. When losses were assessed, they amounted to £827 million. The amount was twice the available capital that Barings had. Their position, despite a long run in the UK, was precarious.
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Barings attempted a bailout, but the plan did not work. In the end, the oldest merchant bank in the United Kingdom had to declare insolvency on February 26.
Leeson, on the other hand, ran away to many countries, including Malaysia and Thailand, before finally being arrested in Frankfurt, Germany. He was extradited to Singapore in November 1995, and his wife was allowed to return to England.
Upon being arrested, he was charged with fraud as he had deceived his superiors about the losses that he had incurred on the bank. He pleaded guilty to two counts thrust upon him, including deceiving bank auditors, cheating the Singapore exchange and forging documents.
After pleading guilty, he was sentenced to six and a half years in Changi Prison, Singapore. However, he was released early in 1999 when he was diagnosed with colon cancer and wasn’t predicted to survive it.
In 1996, a documentary on Leeson’s life called, ‘Inside Story Special,’ was released by Adam Curtis.
When he was in prison, Leeson penned his autobiography, ‘Rogue Trader’ (1996). It was widely criticized by many. However, a movie starring Ewan McGregor and Anna Friel was released based on his book. The movie was well-received due to its tight script.
Upon his release, he was sent to England where he tried to cope with his cancer. He was approached by many newspapers, and finally sold the rights of his autobiography to one. He also enrolled for a degree in psychology and tried to regain the quality of life.
Leeson survived cancer and decided to make the best use of his life. He started hosting dinners and speaking as the key-note speaker during these dinners. He also worked as a guest lecturer at the University of Ireland.
In 2005, he released another book titled, ‘Back from the Brink: Coping with Stress’. The book sheds light on his life after he was released from prison and includes conversations he had with his psychologist.
Later in 2005, he returned to work and was appointed a manager at Galway United F.C. He rose to the position of general manager and became its CEO in July 2007. However, he resigned in February 2011.
In 2013, he was seen on TV when he appeared on Celebrity Apprentice Ireland. He also participated in Celebrity Big Brother (22nd edition) and came fourth in the competition.
He is currently working as the head educator at Bizintra, a trading academy, and continues to promote himself as a business consultant and public speaker. His clients, with the full knowledge of his past, have mentioned that Leeson’s reformation is positive.
Leeson continues to trade even today, but now he does it with his own money. He believes in his skills and hopes to wipe out his pariah image from the banking industry.