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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.
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.
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.
http://news.bbc.co.uk/2/hi/business/375259.stm