NICK LEESON

Nick Leeson

Nick Leeson

Nick Lesson was the only person responsible for the collapse of Barrings PLC bank.. In 1992, Leeson moved to Singapore, where in a short period of time, he worked as a clerk in the Simex (Singapore International Monetary exchange). In the same year, after he received a license to trade Simex, he began working for the PLC Barings in Singapore as a trader again. One of his job description, then, was to use the arbitrage trading strategies (switching) in Singapore and Osaka market, which meant he had to make a profit from different prices for the same securities. His duties were other performers customer orders. (Baldwin, 1998)

In London, he is perceived as a miracle worker, adding up to 50% of the Singapore branch office of profit in 1993, and increasing its contribution to 50% of global revenue. As a reward, London Branch bonuses offered him 130,000 pounds sterling in 1993 and £ 450,000 next year. (Baldwin, 1998)

They did not know that it concealed trading activities, which he holds from the very first day, in fact, most companies have lost 23 million pounds in 1993 and £ 208 million in 1994. In order to keep him in this, and futures markets secret, Leeson opened account the mystery (Error Account 88888), which he uses for these purposes for quite a long time. Significant cross-trades were executed between this account and the account 92000 (Barings Securities Japan - Nikkei JPG and arbitration), the account 98007 (Barings London - JPG arbitration) and accounts 98,008 (Barings London - Euroyen arbitration). Leeson told the profit from trade prices to be charged during the last three 'switching'-accounts and the losses that would be levied, taking into account 88888. (Baldwin, 1998)

Moreover, in account 88888 permanently damaged futures Barings, Leeson's own losses from unauthorized trading position was also recorded in the same account. On the first day of Barings in Singapore, he started to take proprietary positions on Simex futures and options contracts. (Beck, 1992)

Baring Brothers and Co. -- the bank's full name -- continued to have an esteemed position over the course of the following century being owned by a charitable company dominated by members of the aristocratic Ashburton, Revelstocke and Baring families. In 1970, Sir John Baring (Eton and Trinity College, Oxford), later Lord Ashburton, was appointed chairman: he valued above all else discretion, loyalty and conservatism, and was one of the last grandees of the City of London (Fay, 1996). This conservatism was reflected in the bank's profits, which were usually a modest 2-3% per year. Despite the dramatic changes that were to face Barings during and after his chairmanship, senior executive positions in Baring Brothers were always occupied by those in the mould of Sir John. For example, Cambridge educated Peter Baring -- who took over on the retirement of Sir John in 1989 -- was said to be aloof and austere (Gapper and Denton, 1996), and 'truly conservative' (Fay, 1996, ...