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'''Nicholas William Leeson'''<ref name="bio_p2">{{cite web|date=1 March 2011|title=Nick Leeson: biography part II|url=http://www.nickleeson.com/biography/full_biography_02.html|access-date=23 February 2012|archive-date=5 February 2012|archive-url=https://web.archive.org/web/20120205155014/http://www.nickleeson.com/biography/full_biography_02.html|url-status=live}}</ref> (born 25 February 1967) is an English former [[derivative (finance)|derivatives]] [[Trader (finance)|trader]] whose fraudulent, unauthorised and [[speculation|speculative]] trades resulted in the 1995 collapse of [[Barings Bank]], the United Kingdom's second oldest [[merchant bank]]. LeesonHe was convicted of [[financial crime]] in a [[Singapore]] court and served over four years in [[Changi Prison]].
Between 2005 and 2011, Leeson had senior management roles at [[League of Ireland]] club [[Galway United F.C.|Galway United]]. After it suffered financial difficulties, he resigned from his position as chief executive officer. HeLeeson is also active on the keynote and after-dinner speaking circuit, where he advises companies about risk and [[corporate responsibility]]. Leeson is currently a corporate firm [[private investigator]] in charge of dealing with cases of financial misconduct. He resides in [[Galway]] as of 2023.<ref>{{cite news|date=22 March 2023|work=The Guardian|title=Former ‘rogue trader’ Nick Leeson joins corporate private eye firm|url=https://www.theguardian.com/business/2023/mar/22/former-rogue-trader-nick-leeson-joins-corporate-private-eye-firm|access-date=22 March 2023|archive-date=22 March 2023|archive-url=https://web.archive.org/web/20230322150145/https://www.theguardian.com/business/2023/mar/22/former-rogue-trader-nick-leeson-joins-corporate-private-eye-firm|url-status=live}}</ref>
==Early life==
Nick Leeson was born in [[Watford]], [[Hertfordshire]], to working-class parents on a [[council estate]]. His father was a self-employed plasterer, his mother a nurse. He attended [[Parmiter's School]] in nearby [[Garston, Hertfordshire|Garston]]. After finishing sixth form in 1985 with six [[GCE Ordinary Level|O Levels]] and two [[GCE Advanced Level|A level]] passes in English Literature and History with C and D grades respectively, failing his third subject, Mathematics,<ref>{{Cite book|last=Rawnsley|first=Judith H|url=https://archive.org/details/totalrisknicklee00rawn/page/88|title=Total Risk: Nick Leeson and the Fall of Barings Bank|publisher=HarperCollins|year=1996|isbn=9780887307812|location=University of Michigan|pages=[https://archive.org/details/totalrisknicklee00rawn/page/88 88]}}</ref><ref>{{Cite web|last=Powell|first=Robin|date=10 July 2015|title=4 Lessons to Learn From Nick Leeson|url=https://www.evidenceinvestor.com/4-lessons-to-learn-from-nick-leeson/|access-date=13 September 2019|archive-date=31 March 2022|archive-url=https://web.archive.org/web/20220331123852/https://www.evidenceinvestor.com/4-lessons-to-learn-from-nick-leeson/|url-status=live}}</ref> heLeeson was hired as a clerk with the Lombard Street branch of the [[Coutts]] private bank,<ref>{{Cite web|last=Michael|first=Costello|date=6 June 2011|title=The original rogue trader: interview with Nick Leeson|url=https://www.hrmagazine.co.uk/article-details/the-original-rogue-trader-interview-with-nick-leeson|access-date=13 September 2019|archive-date=11 August 2023|archive-url=https://web.archive.org/web/20230811224047/https://www.hrmagazine.co.uk/content/features/the-original-rogue-trader-interview-with-nick-leeson|url-status=live}}</ref> where he settled paper cheques, crediting and debiting client accounts.<ref>{{Cite book|last=Elga|first=Drummond|title=The Dynamics of Organizational Collapse: The Case of Barings Bank|publisher=Routledge|year=2007|isbn=9780415399616|pages=20}}</ref>
In 1987, Leeson moved to [[Morgan Stanley]]'s Futures and Options [[back office]], clearing and settling listed [[derivative (finance)|derivatives]] transactions. With few prospects for a front office role, he joined [[Barings Bank]] two years later, at £12,000 ({{Inflation|UK|12000|1987|fmt=eq|cursign=£}}) a year. With four other settlement specialists, heLeeson was briefly seconded to [[British Hong Kong|Hong Kong]] to troubleshoot Barings' back office in the Indonesian capital of [[Jakarta]]. He was then transferred to Baring's Jakarta office in 1990, handling some of Barings' unpaid share certificates which amounted to £100 million.<ref name="RogueTrader" /> Leeson returned to [[London]] in September 1991 to investigate a case of [[fraud]] in which a Barings employee had used a client's account to trade on a proprietary basis until [[margin call]]s from the clearinghouses unraveled the scheme.<ref>{{Cite book|last=Laurent|first=Jacque|title=Global Derivative Debacles: From Theory To Malpractice|publisher=World Scientific Publishing Company|year=2015|isbn=9789814699891|edition=Second|pages=146}}</ref>
Leeson was then transferred to Baring's Jakarta office in 1990 where he handled some of Barings unpaid share certificates which amounted to £100 million.<ref name="RogueTrader" /> He returned to [[London]] in September 1991 to investigate a case of [[fraud]] in which a Barings employee had used a client's account to trade on a proprietary basis until [[margin call]]s from the clearinghouses unraveled the scheme.<ref>{{Cite book|last=Laurent|first=Jacque|title=Global Derivative Debacles: From Theory To Malpractice|publisher=World Scientific Publishing Company|year=2015|isbn=9789814699891|edition=Second|pages=146}}</ref>
==Career==
===Barings Bank===
In April 1992, Barings decided to open a Futures and Options office in Singapore, executing and clearing transactions on the [[Singapore International Monetary Exchange]] (SIMEX).<ref name="nytimes">{{cite news|author=Floyd Norris|date=31 March 1996|title=Upper-Class Twits Made Me Do It|newspaper=[[New York Times]]|url=https://www.nytimes.com/1996/03/31/books/upper-class-twits-made-me-do-it.html|access-date=23 February 2012|archive-date=28 August 2011|archive-url=https://web.archive.org/web/20110828155742/http://www.nytimes.com/1996/03/31/books/upper-class-twits-made-me-do-it.html|url-status=live}}</ref> Barings had held a seat on SIMEX for some time, but did not activate it until Leeson, appointed general manager, was sent to head both front office and back office operations. Prior to leaving, Leeson was denied a [[broker]]'s licence in the UK because of committing fraud on his application, having failed to report a judgment against him entered by the [[NatWest|National Westminster Bank]].<ref>{{cite book|last=Maeda|first=Martha|url=https://books.google.com/books?id=EuLrXWaOdSIC&pg=PT31|title=The Complete Guide to Spotting Accounting Fraud & Cover-ups|publisher=Atlantic Publishing Company|year=2010|isbn=978-1-60138-212-2|page=31|access-date=18 November 2019|archive-date=11 August 2023|archive-url=https://web.archive.org/web/20230811224041/https://books.google.com/books?id=EuLrXWaOdSIC&pg=PT31|url-status=live}}</ref> He had failed to report a judgment against him entered by the [[NatWest|National Westminster Bank]]. Neither Leeson nor Barings disclosed this denial when he applied for his licence in Singapore.<ref>{{cite book|author=Hal S. Scott|title=International Finance: Transactions, Policy, and Regulation|publisher=[[Foundation Press]]|year=2006|isbn=978-1-59941-263-4}}</ref>
From 1992, Leeson made unauthorised [[speculation|speculative]] trades that at firstinitially made large profits for Barings: £10 million, which accounted for 10% of Barings' annual profit.<ref>{{cite web|date=1 March 2011|title=Nick Leeson: biography part I|url=http://www.nickleeson.com/biography/full_biography.html|access-date=23 February 2012|archive-date=5 February 2012|archive-url=https://web.archive.org/web/20120205154901/http://www.nickleeson.com/biography/full_biography.html|url-status=live}}</ref> He earned a bonus of £130,000 on his salary of £50,000 for that year. Leeson used one of Barings' [[error account]]s (accounts used to correct mistakes made in trading) to hide his losses.<ref>{{cite news|date=22 June 1999|title=How Leeson broke the bank|publisher=BBC News|url=http://news.bbc.co.uk/1/hi/business/375259.stm|access-date=6 September 2018|archive-date=25 August 2017|archive-url=https://web.archive.org/web/20170825213649/http://news.bbc.co.uk/1/hi/business/375259.stm|url-status=live}}</ref><ref>{{cite news|date=16 February 1996|title=How account 88888 sank Britain's oldest bank|newspaper=[[The Independent]]|url=https://www.independent.co.uk/news/business/how-account-88888-sank-britains-oldest-bank-1319275.html |archive-url=https://ghostarchive.org/archive/20220620/https://www.independent.co.uk/news/business/how-account-88888-sank-britains-oldest-bank-1319275.html |archive-date=20 June 2022 |url-access=subscription |url-status=live}}</ref> He sayslater stated that this account was first used to hide an error made by onea of his subordinates.subordinate Shewho had been assigned to buy 20twenty [[futures contract]]s for [[Fuji Bank]], but had sold them instead, costing Barings £20,000.<ref>{{cite news|date=24 February 1996|title=The man who broke the queen's bank|newspaper=[[The Irish Times]]|url=https://www.irishtimes.com/news/the-man-who-broke-the-queen-s-bank-1.31807|access-date=6 September 2018|archive-date=11 December 2022|archive-url=https://web.archive.org/web/20221211233113/https://www.irishtimes.com/news/the-man-who-broke-the-queen-s-bank-1.31807|url-status=live}}</ref><ref>{{cite news|date=19 August 2012|title=Barings rogue trader Nick Leeson: 'Money is not my motivation'|newspaper=[[The Daily Telegraph]]|url=https://www.telegraph.co.uk/finance/personalfinance/fameandfortune/9483379/Barings-rogue-trader-Nick-Leeson-Money-is-not-my-motivation.html|access-date=6 September 2018|archive-date=6 September 2018|archive-url=https://web.archive.org/web/20180906233651/https://www.telegraph.co.uk/finance/personalfinance/fameandfortune/9483379/Barings-rogue-trader-Nick-Leeson-Money-is-not-my-motivation.html|url-status=live}}</ref><ref name="RogueTrader">{{cite book|last1=Leeson|first1=Nick|title=[[Rogue Trader (book)|Rogue Trader]]: How I Brought Down Barings Bank and Shook the Financial World|last2=Whitley|first2=Edward|year=1996|isbn=0-316-51856-5|page=}}{{page?|date=August 2021}}</ref>
Leeson used this error account to cover further bad trades by himself and others. For example, he used it to cover mistakes made by one of his traders who frequently came to work after long nights of partying. Leeson believes that he first crossed into out-and-out criminal conduct when he forgot to reconcile a discrepancy of 500 contracts, costing Barings US$1.7 million. He concluded that the only way to hide such a massive error and keep his job was to hide it in the error account.<ref name=RogueTrader/> Leeson insists that he never used the account for his own gain, but in 1996 investigators had located approximately $35 million in various bank accounts tied to him.<ref name="nytimes" />
===Downfall and imprisonment===
By the end of 1992, the error account's losses exceeded £2 million, increasing to £23 million in late 1993. This amount then ballooned to £208 million by the end of 1994.<ref name="NF">{{cite web|last=Monthe|first=Paul|date=February 2007|title=How Nick Leeson caused the collapse of Barings Bank|url=https://www.next-finance.net/How-Nick-Leeson-caused-the|access-date=4 December 2018|publisher=Next Finance|archive-date=4 December 2018|archive-url=https://web.archive.org/web/20181204195138/https://www.next-finance.net/How-Nick-Leeson-caused-the|url-status=live}}</ref> Leeson had followed a [[Martingale (betting system)|"doubling" strategy]]: every time he lost money, he would bet double the amount that was lost to recoup the amount. This had been successful for him in the past, including once in 1993 where he was able to cover a £6 million negative balance in the error account and after which he vowed not to use the account again. Leeson had to maintain his reputation as a trading genius and soon found himself hiding his losses there again. As the losses grew higher, Leeson fabricated cover stories to explain why he needed more cash from London; his sterling reputation protected him from close scrutiny.<ref>{{cite book|last=Marthinsen|first=John E.|title=Risk Takers|date=2018|publisher=De Gruyter|isbn=9781547400058|pages=200–204|chapter=Barings Bank PLC: Leeson's Lessons}}</ref>
The beginning of the end occurred on 16 January 1995, when Leeson placed a [[short straddle]] in the [[Stock Exchange of Singapore|Singapore]] and [[Tokyo stock exchange|Tokyo]] [[stock exchange]]s, essentially betting that the Japanese stock market would not move significantly overnight. The [[Great Hanshin earthquake]] hit early in the morning on 17 January, sending Asian markets, and Leeson's trading positions, downward. Leeson attempted to recoup his losses by making a series of increasingly risky new trades (using a long-long future [[arbitrage]]), this time betting that the [[Nikkei Stock Average]] would make a rapid recovery. The recovery failed to materialise.<ref name="NF"/>
In 2003, four years after his release from Changi Prison, Leeson married Leona Tormay, an Irish [[Cosmetology#Esthetician|beautician]].<ref>{{cite news |last=McDonald |first=Brian |date=14 June 2003 |title=Rogue trader Leeson ties knot with Irish love |newspaper=[[Irish Independent]] |url=http://www.independent.ie/national-news/rogue-trader-leeson-ties-knot-with-irish-love-217095.html |url-status=live |access-date=23 February 2012 |archive-url=https://web.archive.org/web/20120124105634/http://www.independent.ie/national-news/rogue-trader-leeson-ties-knot-with-irish-love-217095.html |archive-date=24 January 2012}}</ref>
He lives in [[Galway]] as of 2023.<ref>{{cite news|date=22 March 2023|work=The Guardian|title=Former ‘rogue trader’ Nick Leeson joins corporate private eye firm|url=https://www.theguardian.com/business/2023/mar/22/former-rogue-trader-nick-leeson-joins-corporate-private-eye-firm|access-date=22 March 2023|archive-date=22 March 2023|archive-url=https://web.archive.org/web/20230322150145/https://www.theguardian.com/business/2023/mar/22/former-rogue-trader-nick-leeson-joins-corporate-private-eye-firm|url-status=live}}</ref>
==Works==
* [[Chia Teck Leng]]
* [[Clarence Hatry]]
* [[Bill Hwang]]
* [[Speculation]] in financial markets
* [[List of trading losses]]
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