Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point

In Depth

On Air

Low Graphics

Tuesday, June 22, 1999 Published at 15:58 GMT 16:58 UK

Business: The Economy

How Leeson broke the bank

Nick Leeson guessed he faced jail when he was extradited to Singapore

It was the 1980s. Traders were young and greed was good.

Nick Leeson, a working class lad from Watford, the son of a plasterer, was chuffed to land a job in the purportedly-glamorous world of the City of London in 1982.

It was a relatively low-grade job, but he quickly made a name for himself. He worked his way up, becoming a whiz-kid in the hardworking atmosphere of the far eastern currency markets.

[ image: The Barings trader - when he was a schoolboy]
The Barings trader - when he was a schoolboy
Soon, he was Barings Bank's star Singapore trader, bringing substantial profits from the Singapore International Monetary Exchange.

By 1993, a year after his arrival in Asia, Leeson had made more than £10m - about 10% of Barings's total profit for that year.

In his autobiography Rogue Trader, Leeson said the ethos at Barings was simple: "We were all driven to make profits, profits, and more profits ... I was the rising star."

He and his wife Lisa enjoyed a life of luxury that the money brought.

He earned a bonus of £130,000 on his salary of £50,000.

Deeper and deeper

But in 1994, his luck began to run out when the markets turned against him, the downturn accelerated by the economic impact of the earthquake in Kobe, Japan.

By autumn that year, the losses stood at £208m. Leeson requested and obtained extra funds to continue his trading activities, as he attempted to extricate himself from the financial mess by more and more frenetic deals.

[ image: Lisa Leeson remarried after the relationship ended]
Lisa Leeson remarried after the relationship ended
Alerted by the requests, his bosses carried out a spot audit in February 1995. They discovered that losses amounted to more than £800m, almost the entire assets of the bank.

Barings faced collapse.

Leeson had hidden the losses in an obscure account called Error Account 88888, which went to different managers from the house accounts.

When he was discovered, Leeson and his wife went on the run, first to Borneo, then to Frankfurt, but he was arrested and then extradited from Germany back to Singapore.

Disaster for life and bank

Barings, the UK's oldest merchant bank, finally crashed and was bought for £1, by the Dutch banking and insurance group ING.

Dozens of executives who were implicated in the failure to control Leeson resigned or were sacked.

Leeson pleaded guilty to fraud and was sentenced to six and a half years in prison.

During his detention, he was diagnosed as suffering from colon cancer and had surgery last autumn.

His marriage broke down and Lisa remarried.

After his conviction, Leeson wrote Rogue Trader, in which he condemned the practices that allowed him to gamble with such large amounts of money unchecked.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Economy Contents

Relevant Stories

22 Jun 99 | The Economy
Leeson scandal 'could happen again'

22 Jun 99 | Entertainment
Stars back the Rogue Trader

21 Jun 99 | Asia-Pacific
Leeson sells prison story

Internet Links

ING group

ING Barings

The BBC is not responsible for the content of external internet sites.

In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree