Nick Leeson Scam Story The Rouge Trader

Nick Leeson Scam Story | The story of a 28-year-old young man who ruined the 233 year old bank of England in one stroke. The bank where Queen Elizabeth II herself used to have an account.

Born on 25 February 1967 in Watford, England, Nick Leeson’s dream was to become a successful stock trader. When he turned 23, he started working in a company called Morgan Stanley. Nick meanwhile demanded promotion from the company. But his manager did not give promotion. Because of this, Nick left this company. Then in 1990 he started working in the oldest Barings Bank of England. But Berings Bank did not know how heavy it was going to be to hire Nick.

Nick came here and saw a new environment. Most of the computers here were old. People did not work properly and the bank had given many such loans, which people had never repaid. Nick quickly started investigating them. He also traveled to many countries for this investigation. Finally Nick exposed the loan of about 100 million pounds . The bank benefited a lot due to this investigation of Nick. That’s why the bank also gave promotion to Nick. In this way Nick’s dream of becoming a stock trader was fulfilled.

Nick Leeson Promoted as head in Singapore

The bank made him head of Singapore’s futures division. Then from here all the mess started. While in Singapore, the bank was working on the Stock Exchange of Japan. Nick’s job was to bet on stocks. If the market went according to Nick’s prediction, he would have made a profit. Otherwise there would have been a loss. Nick had a bad first year here and many of his bets proved to be loss-making. Nick was now afraid that the bank might take away his job. That’s why Nick made a secret account to hide these losses, in which these stocks were kept. Nick needed a lot of money to hide these losses. So he started lying to the bank.

nick leeson in bank

Over Trust by the bank

Nick wanted more points for new clients. Because now the losses were not coming to the fore, then the bank also had no problem in giving these points. Even no one has checked these claims from Nick even once. Nick’s idea was that when the stocks lying in this account become profitable, he will bring them out later. Such a bank will never even know that they ever had a loss. Nick told in an interview that he was very scared for two days in doing this that he might not be caught. But when nothing happened, his courage increased further.

Nick's Plan Successful

By 1992, Nick had caused a loss of about 40 million pounds to the bank. But the bank did not know all this. The bank felt that Nick was generating profit for them. But in July 1993, Nick’s plan worked and all the losses were covered. But after that his courage increased and he started placing more risky bets. Nick’s image had become that of a successful trader at that time and in any case he wanted to maintain this image.

Internal Audit

This was followed by the entry of Ron Baker in Berings Bank. He was entrusted with the responsibility of handling the operations by the bank. During the work, Ron’s eyes fell on the Singapore department, from where the bank was getting more profit. This is where he suspected Nick. He found that the clients to whom Nick got the funds were not making their payments. Therefore, in July 1993, the internal audit of the bank was called. The auditors went to Singapore. Nick got scared knowing this, because his truth was going to come out. Let us tell you, at that time he had hidden a loss of 94 million pounds. Which was 23 times more than the previous loss.

nick leeson handing business

Nick Leeson selling stock at loss

Nick knew that if the auditors found a single document related to the secret account, then its truth would be revealed to everyone. But the people of Barings Bank took the job very lightly. Therefore, the auditors did not check a single document related to the accounts properly. In this way Nick escaped from being caught. By September 1994, this deficit had increased to 160 million pounds. As a result, Nick had to sell some of his personal stocks to the bank at discounted prices. So that the bank feels that it is making profit. On the other hand, the bank was continuously giving money to Nick for the clients. Sometimes Nick used to demand 10 to 50 million pounds in a single day. The bank also kept approving them without checking.

Nick Leeson Contributing max in banking business

Now Nick had become like a celebrity. He was introduced by the bank as the poster boy of the bank in the traders meeting of December 1994. Because according to the records, Nick had earned 28 million pounds to the bank that year. But in that meeting, many traders found something wrong with it. He also talked to the bank in this regard. But the bank ignored him. The situation had become such that now Nick was handling 75% of the money with the bank alone. Whereas, Nick had made the bank a loss of more than 330 million pounds so far. It had become very difficult for Nick to handle this pressure now.

Nick's Fraud detected

But Nick made one last attempt. Nick now bet that the Japanese market will be stable for the next 6 months. And that was Nick’s biggest bet. If this had happened, then all the losses of Nick would have been covered. For a few weeks everything went well. But on January 17, 1995, a major earthquake occurred in Japan, which had a big impact on the economy there. The stock market started falling. But funds were still being received from the bank side. Nick was generating losses for the bank day by day. Meanwhile, Nick forgot to hide a huge loss of 5 million pounds. When the auditors noticed this loss, they were asked questions. But Nick made it disappear from his sight by creating a fake bank loan document. Whereas, it was clear from these documents that they were not sent from the bank, but from Nick’s personal fax machine.

nick leeson in police custody

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Nick Leeson caught by Clerk

On 17 February 1995, in Singapore itself, a bank clerk noticed a discrepancy in Nick’s documents. He started asking Nick about this. One day when the clerk went to Nick’s house to talk about this, he made an excuse that his wife was ill. He has to go out for an hour. After that Nick never returned. It turned out that he had left the country. When Nick disappeared, the bank found Nick’s secret account. In which now the loss had increased to 83 million pounds. The bank knew that nothing could be done now. He sought help from the Central Bank of England before opening the market. But nothing happened, and after a long history of 233 years, the Berings Bank collapsed. At the same time, after the loss, a Dutch bank bought it by paying only one pound.

Nick Leeson was arrested

Then on 30 November 1995, Nick was arrested from Germany. After this he was brought to Singapore. Two sections were imposed on Nick for defrauding the auditors of the bank and the Singapore Exchange. According to the Daily Mail, for this he was sentenced to only 6 and a half years. But after 3.5 years, he was released due to good behavior. Nick was punished so little because the court believed that the bank was also at fault for this. He gave so many funds to Nick without checking and despite being audited, the auditors could not get hold of Nick’s secret account.

nick leeson with police

Where is he Today?

Nick told that he had also got stomach cancer there. He was released from prison in 1999 when he was 32 years old. Now he didn’t even have a job, so he went back to England. Here he got cancer treatment. Nick sold his autobiography to Daily Mail for millions. He also wrote a book. A film named ‘Rogue Trader’ has also been made on it, in which Ewan McGregor has worked. Nick is living a good life today. Nick was also invited as a participant in the Big Brother show in Singapore in 2018.

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