A financial whiz-kid whose losses on global markets toppled one of Britain’s oldest merchant banks was jailed on December 2, 1995.
While working at the Singapore office of Barings Bank, UK-born trader Nick Leeson, 28, made fraudulent, unauthorised and increasingly reckless trades.
His high-risk strategy culminated in a $US1.3 billion ($2 billion) investment on bond derivatives that sent Barings broke.
Nick Leeson, 28, made fraudulent, unauthorised and increasingly reckless trades, culminating in a market bet that led to the bank’s collapse. (AP)
Leeson had bet the Japanese stock market would rise.
But it slumped after the devastating Kobe earthquake in January 1995, and he doubled his bets, hoping to recoup his losses.
Every loss was hidden in a secret “error account” so his office would always appear in profit.
Leeson’s losses mounted so he turned to other sources of money to continue trading.
This resulted in some of Singapore’s major financial companies releasing funds to Barings.
Nick Leeson’s huge punt on the Japanese stockmarket was undone by the 1995 Kyoto earthquake. (AP Photo/Kyodo) (AP)
But his bosses at Barings began to investigate the staggering losses as its cash reserves quickly shrank.
Their actions came too late to save the bank, founded in 1762, and whose clients included the British royal family.
Realising his giant financial scam was over, Leeson fled Singapore with his then-wife to Kuala Lumpur, triggering a global manhunt.
He resurfaced days later and was arrested in the German city of Frankfurt before being deported to Singapore.
Leeson, known as the “Rogue Trader”, was given a jail term of six-and-a-half years in Singapore for illegally concealing trading losses and served four years of his sentence.
British actor Ewan McGregor in the film Rogue Trader, based on Nick Leeson’s financial crimes. (Pathe)
On his release, he breakfasted on champagne and smoke salmon while flying back to London in the company of British reporters.
Leeson later signed a lucrative book deal.
The film Rogue Trader, starring Ewan McGregor, was based on his exploits, from which he received a share of the $14 million profits.
Speaking with CNN in 2013, Leeson said he never got to spend any of the money.
Barings’ liquidators had served Leeson with an injunction of £100 million ($200 million) and took 50 per cent of the proceeds from his story.
“I asked them ‘if I got a job flipping burgers, how much would you want?’ and they told me “half’,” he said.