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Encyclopedia > Nick Leeson

Nicholas Leeson (English, born February 25, 1967) is a former derivatives trader whose unsupervised speculative trading caused the collapse of Barings Bank, the United Kingdom's oldest investment bank. February 25 is the 56th day of the year in the Gregorian Calendar. ... 1967 (MCMLXVII) was a common year starting on Sunday of the Gregorian calendar (the link is to a full 1967 calendar). ... Derivatives traders at the Chicago Board of Trade. ... Barings Bank, previously known as Baring Brothers & Co. ... To meet Wikipedias quality standards, this article or section may require cleanup. ...

Leeson was born in Watford, north-west of London. He attended Parmiter's School, where teachers found him to be a poor mathematician. After leaving school, Leeson found a job at Barings in the early 1990s, with almost no financial experience; in a matter of a few years, he was appointed manager of a new operation in futures markets on the Singapore International Monetary Exchange (SIMEX).[1] From 1992, Leeson made unauthorized speculative trades that at first made large profits for his employer, accounting for 10% of Barings' annual income. His luck quickly went sour, and he used a secret account (numbered 88888 -- a number considered very lucky in Chinese numerology) to hide his losses. Leeson claims that this account was initially opened to hide a £20,000 trade of one of his subordinates that had been recorded incorrectly; however, Leeson used this account to cover future bad trades. He insists that he never used the account for his own gain, but lawyers for Barings located approximately 35 million dollars in various bank accounts tied to him.[1] Management at Barings Bank also allowed Leeson to remain Chief Trader while being responsible for settling his trades, a job that is usually done by two different people. This made it much simpler for him to hide his losses from the Bank. Watford is a town and district in Hertfordshire, UK, situated 34 km (21 miles) northwest of London and within the bounds of the M25 motorway. ... Parmiters School is a co-educational mixed ability school in Garston near Watford, Hertfordshire, England with a long an interesting history. ... A futures exchange, is a corporation or organization which provides a marketplace in which to trade derivatives such as futures contracts and options. ... SIMEX is the Singapore Monetary Exchange, a stock trading institution in Singapore. ... This article or section does not cite its references or sources. ...



By the end of 1992 the account's losses exceeded £2 million, which ballooned to £208 million by the end of 1994. The beginning of the end occurred on January 16, 1995, when Leeson placed a short straddle (an options trading strategy) in the Singapore and Tokyo stock exchanges, essentially betting that the Japanese stock market would not move significantly overnight. However, the Kobe earthquake hit early in the morning on January 17, sending Asian markets, and Leeson's investments, into a tailspin. Leeson attempted to recoup his losses by making a series of increasingly risky new investments, this time betting that the Nikkei Stock Average would make a rapid recovery. But the recovery failed to materialize, and he succeeded only in digging a deeper hole. Realizing the gravity of the situation, Leeson left a note reading "I'm Sorry" and fled. Losses eventually reached £827 million ($1.4 billion at then-prevailing exchange rates), twice the bank's available trading capital. This led to the bank's collapse. January 16 is the 16th day of the year in the Gregorian calendar. ... 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ... To straddle is to sit, stand or walk with the legs spread wide. ... Categories: Japan-related stubs | 1995 | Earthquakes | Japanese history ... Nikkei 225 (日経平均株価, 日経225) is a stock market index for the Tokyo Stock Exchange (TSE). ...

After fleeing to Malaysia, Brunei and finally Germany, Leeson was arrested and extradited back to Singapore on March 2, 1995. While he had authorization for the January 16 short straddle, he was charged with fraud for deceiving his superiors about the riskiness of his activities and the scale of his losses, although some observers (and Leeson himself) have placed much of the blame on the bank's own deficient internal auditing and risk management practices. Sentenced to six and a half years in jail in Singapore, he was released from prison in 1999, having been diagnosed with colon cancer, which he has survived despite grim forecasts at the time. While in prison, in 1996, Leeson published an autobiography, Rogue Trader, detailing his acts. A review in the financial columns of the New York Times stated that "This is a dreary book, written by a young man very taken with himself, but it ought to be read by banking managers and auditors everywhere."[1] The book was later made into a film of the same name starring Ewan McGregor and Anna Friel. A financial audit, or more accurately, an audit of financial statements, is the examination by an independent third party of the financial statements of a company or other organisation, resulting in the publication of an independent opinion on whether or not those financial statements are relevant, accurate and complete. ... Risk management is the process of measuring, or assessing, risk and developing strategies to manage it. ... Diagram of the stomach, colon, and rectum Colorectal cancer includes cancerous growths in the colon, rectum and appendix. ... Rogue Trader: How I Brought Down Barings Bank and Shook the Financial World is a book by Nick Leeson, who served four years in prison for fraud after bankrupting the London-based Barings Bank in 1995 by hiding $1. ... The New York Times is an internationally known daily newspaper published in New York City and distributed in the United States and many other nations worldwide. ... Rogue Trader is a 1999 drama film directed by James Dearden. ... Ewan Gordon McGregor (born March 31, 1971) is a Scottish actor who has had significant success in mainstream, indie and art house films. ... Anna Friel (born 12 July 1976) is an English actress born in Rochdale, Greater Manchester. ...


Nick Leeson now lives in Barna, County Galway in the west of Ireland. Having divorced while in prison, he has now re-married and is a regular guest on the after-dinner speaking circuit, having described himself as one of Great Britain's most sought-after speakers [1]. He was appointed Commercial Manager of Galway United Football Club in April 2005, rising to the position of General Manager in late November 2005. Barna (Bearna in Irish) is a suburban village in County Galway, Ireland. ... Statistics Province: Connacht County Town: Galway Code: G (GY proposed) Area: 6,148 km² Population (2006) 231,035 (including Galway City); 159,052 (without Galway City) Website: www. ... For the record label, see Divorce Records. ... Galway United FC was founded as Galway Rovers in 1937. ...

On June 23, 2005, Leeson released a new book Back from the Brink: Coping with Stress. It picks up his story where Rogue Trader left off, including in-depth conversations with psychologist Ivan Tyrrell asserting how the prolonged periods of severe stress that affected Leeson's mental and physical health can be related to most people. June 23 is the 174th day of the year (175th in leap years) in the Gregorian Calendar, with 191 days remaining. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ...


  • Rogue Trader (1996, hardcover) ISBN 0-316-51856-5; (1997, softcover) ISBN 0-7515-1708-9
  • Back from the Brink: Coping with Stress (2005) - ISBN 0-7535-1075-8


  1. ^ a b c Norris, Floyd. "Upper-Class Twits Made Me Do It." New York Times, 31 March 1996. Available here.

See Also

Speculation involves the buying, holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. ...

External links

  Results from FactBites:
Nick Leeson and Barings Bank (1779 words)
As general manager, Leeson's job was not trading, but he soon took the necessary exam so that he could trade on SIMEX along with his small team of traders.
On February 23, 1995, Nick Leeson hopped on a plane to Kuala Lumpur leaving behind a GBP 827MM hole in the Barings balance sheet.
Leeson was involved with two "products"—futures arbitrage and trade execution for clients or other companies within the Barings organization.
Nick Leeson (143 words)
Nick Leeson was an investment officer of Barings Bank London England.
After capture, Nick was held in confinement for nine months in a Frankfort Germany prison and was eventually extradited to Singapore where the alleged crimes were committed.
Nick was sentenced to 6 1/2 years by the Singapore court for forgery and cheating.
  More results at FactBites »



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