Twenty years ago, the collapse of Barings Bank sent shockwaves through the financial world. The City's oldest merchant bank, and banker to the Queen, was brought down by the actions of a single rogue trader: Nick Leeson.
Leeson, born in Watford, was a rising star at Barings. In 1993, he made £10 million, accounting for 10% of the bank's annual profits. However, in 1995, the discovery of a secret file—Error Account 88888—revealed that Leeson had gambled away £827 million in the bank's name. He fled the firm's Singapore office, leaving a note saying 'I'm sorry', and went on the run.
After a global manhunt, Leeson was arrested in Frankfurt and eventually extradited to Singapore. He was charged with forgery and fraud in relation to the collapse of Barings. At his trial, he admitted the charges and was sentenced to six and a half years in prison. During his sentence, he was diagnosed with colon cancer and received treatment. He was released in 1999 after serving four years.
Following his release, Leeson profited from his notoriety, reportedly earning £200,000 from a book deal and newspaper serialisation, as well as a share of the £7 million profit from the film 'Rogue Trader', which starred Ewan McGregor and Anna Friel.
Barings Bank was sold to Dutch bank ING for £1.00 in 1995. Many of Leeson's former colleagues lost their jobs, and investors lost out, compounded by the news that bank directors would still receive large bonuses. A Bank of England report concluded that the bank's fall 'came from unauthorised and concealed trading positions' and 'serious problems of controls and management failings'.
