Nick Leeson
Nicholas "Nick" Leeson ( born February 25, 1967 in Watford, Hertfordshire ) is a former derivatives trader British nationality, the collapse of Barings Bank, the oldest investment bank Britain caused by risky speculation.
Life and work
Leeson lost his mother early and was raised by his father, a plasterer, in Watford. After his A-levels, the British counterpart to the High School, where he failed the math exam, he decided to create a bank training. In various institutions, he worked mainly in the settlement, in the back office of the commercial departments, such as Coutts & Company and Morgan Stanley, before joining the prestigious Barings Bank in July 1989. Their newly formed subsidiary, Barings Securities, expanded in these years at a fast pace in East Asia. 1990 Leeson was transferred to Hong Kong, where he was appointed as head of a four- person teams with the solution of special accounting problems.
A little later he was transferred to Jakarta, where he met his future wife, Lisa, who also worked at Barings Securities. In Jakarta succeeded applicable as ambitious and hardworking Leeson to reduce the outstanding securities of the bank quickly and collect outstanding receivables. In 1992 he was promoted to general manager of Barings Securities Singapore office, with responsibility for the recruitment of distributors and the management and control of trades on the Singapore Exchange ( SIMEX ), but not initially for the trade itself After passing merchant exam at the Simex was Leeson, who according to his own admission, had long dreamed of a career as a trader in futures and options, in addition, and contrary to the usual practice in the investment banking industry and chief trader. He was thus at the same dealer and inspector 's own stores.
That this unusual construction permits was that the jurisdiction of Barings Securities in Singapore was limited exclusively to the processing of customer orders and the low-risk arbitrage business, so that management in London held an additional inspector for unnecessary ( "doing too little and too expensive "). In addition, the native of the traditional banking business management was not very familiar with the processes in the exchange trading.
Nick Leeson began to speculate in 1993 without authorization. He celebrated swiftly quick success. Like any other exchange traders under running down his errors were largely due to inexperienced staff. His losses he posted on a secret account of the employer, although a furnished, but so far ungenutzes account with the number 88888, the ( fictional) profits, the Bank received. Occasional false orders were received to this account, which seemed to be predestined to conceal from the supervisor. Due to the permanently high surpluses on the other hand, he soon rose to stardom trader. His position within Barings was unassailable, buyers from the headquarters he satisfied by some quite elaborate forgery and excuses. In return, the accounting errors accumulated on the named account until the year 1993 was accumulating a deficit of six million pounds. On the Account 88888 more deficits were registered. Early 1994 were accumulated losses of £ 50 million, meanwhile, he was hailed as a rising star in the financial skies of London.
From short intermediate phases apart, Leeson lost with his speculations from the outset money. The losses on the hidden account swelled by 2 million pounds sterling in late 1993 to 23 million pounds of end of 1994. Leeson tried to compensate for the losses incurred by ever more daring speculations and fell in his spare time, increasingly through excessive alcohol consumption and rowdiness. He spent one night in a drunk tank after he had several stewardesses of Singapore Airlines shown in a bar his naked rump. Leeson was sentenced to pay a fine for " immoral self-revelation ."
After the earthquake in Kobe in 1995, the net loss increased to about 400 million British pounds. Alone on this day he lost more than 55 million pounds. Leeson finally put it all on one card and tried by extremely risky speculations turn things around. In vain, the losses increased dramatically within a few weeks, finally reached 825 million pounds sterling and had little later the collapse of the traditional Barings Bank result. On February 23, 1995, Leeson took off with his wife to Kota Kinabalu. To avoid being arrested in Singapore, he fled and escaped in Brunei on an odyssey through Brunei, Bangkok, Abu Dhabi to Frankfurt am Main.
On March 2, 1995 Leeson was arrested in Frankfurt am Main Airport, delivered on November 23 at Singapore and sentenced there a little later to six and a half years in prison for forgery, embezzlement and fraud that he had to serve in the notorious Changi Prison in Singapore. After a cancer diagnosis Leeson was released early in 1999 and now lives in Ireland. During his detention, he brought an autobiography entitled Rogue Trader, under the title Billionaire appeared in Germany, out. The book was also made into a film in 1999, which participated as his wife Lisa in the lead roles Ewan McGregor as Nick Leeson and Anna Friel. In Germany the film went under the name Rogue Trader ( later German title for the Money - The Nick Leeson Story). At the premiere of Nick Leeson was even a guest. The Australian band Rogue Traders named after the film.
Today, Leeson increasingly involved in cancer research. He himself claims to be cured of the disease. From April 2005 to February 2011 he was manager of Irish football club Galway United. In June 2005, his new book Back from the Brink: Coping with Stress published.
Nick Leeson was divorced during his detention by his wife Lisa. In 1999 he married the Irish Leona Tormay, with whom he has three children.
Leeson's approach
His first experience on the trading floor, he collected in arbitrage trading, the price differences of the Nikkei 225 were exploited between different exchanges. Depending on the direction of the price difference sold a distributor in Singapore Call or put options, and his colleague in Tokyo secured the business with an offsetting trade from. A small but steady income stream was guaranteed.
Leeson was these small gains soon enough. He believed he could foresee the movement of the market and renounced the protection of their business through Tokyo. Since he sold options, he first took money, the option premium. Because, however, developed the Nikkei 225 down permanently, he had at maturity the underlying cause excessive price to buy to close out its positions. Exactly the opposite was his speculation on the Japanese Government Bond Futures. Here Leeson had bet on falling prices, but the market rose inexorably. Thanks to a computer manipulation, he managed the account 88888, on which he recorded the losses, to hide from the supervisory bodies of the Bank. As head of the operations department, he had little difficulty, to cover his tracks. By forged letters and faxes he pretended business to a third party on whose behalf he carried out the speculation.
The rampant loss he finally tried to compensate for the fact that he invested in high-risk short straddles, which would have then thrown high profits when the Nikkei would stabilize at 19,000 points. This speculation also failed. He alone could not reverse the downward trend.
Follow
Leeson's bad speculations led to a global currency crisis, since the pound came under enormous pressure. It took almost a year until the financial markets had again halfway recovered. Singapore has imposed a travel ban Leeson. Almost all banks in the world fit after the momentous collapse of their control mechanisms.