Some of the team here at Bridge Classic Cars recently had the opportunity to hear the story of Rogue Trader, Nick Leeson from the man himself.
For those who don’t know, Nick Leeson is a former trader who ended up in prison after he single-handedly bankrupted Barings Bank in 1995. Although he was ultimately convicted of fraud, Nick actually started his trading career as something of a future star. After making massive profits for Barings, Nick was moved to Singapore where he made his first unauthorised trades.
Nick’s role should have been cash-neutral for his employer, meaning that any profits and losses belonged to the client’s portfolios that he was managing. Barings Bank would get a commission for any successes but they wouldn’t lose any money in the trades. However, what was actually happening is that Nick was using the bank’s money to try and recoup trading losses.
Nick used the extremely risky strategy of betting double the amount of money lost to try and get the losses back while making a profit too. This ended up with Barings Bank losing a total of £827 million in 1995. This huge amount of money was double the bank’s trading capital and proved to be the beginning of the end for the 230-year-old bank.
While in prison, Nick wrote a book called Rogue Trader which subsequently was adapted into a film starring Ewan McGregor and Anna Friel in 1999.
Obviously, the actions of Nick Leeson impacted a huge number of people and there is still a strong element of controversy and emotion that surrounds him. That being said, hearing his story and his explanation of what was going on at the time was certainly very interesting and something that the team will remember.
