:max_bytes(150000):strip_icc()/GettyImages-1017811160-24a27175ea454fc390baee631090a6f3.jpg "Historic Bank Crumbles Under Rogue Trader’s Losses—He’s Now Investigating Similar Cases")
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It takes one to know one, as they say. So explains Nick Leeson’s journey from single-handedly crashing one of the world’s oldest banks to investigating financial misconduct three decades later.
After sinking the 233-year-old Barings Bank, Leeson, who was portrayed by Ewan McGregor in the film Rogue Trader, served time in prison and beat cancer. He has also built and maintained a lucrative speaking career on subjects like financial misconduct, risk, and regulatory failure, hosts a podcast, and teaches people how to trade. He’s also a member of the Red Mist Enforcement Unit, helping to sniff out the kind of behavior that landed him in prison.
Key Takeaways
- Barings Bank, which helped fund the Napoleonic wars and the U.S.’s geographical expansion, was 233 years old when Nick Leeson bankrupted it in 1995.
- Leeson had racked up over $1 billion in trading losses by continuing to make massive, risky bets in an attempt to recoup previous losses. He spent time in prison for his acts.
- Leeson is now an author, well-paid speaker, podcast host, trading coach, and an investigator of financial misconduct.
How Leeson Brought Down Barings Bank
Barings Bank was one of the first major international investment banks. Founded in the U.K. in 1762, it’s perhaps best known for helping to finance the Napoleonic wars, managing the finances of the British Royal family, and funding the Louisiana Purchase, which nearly doubled the size of the U.S. Without Barings’ economic support, the U.S. likely wouldn’t be as big geographically or economically as it is today.
Leeson moved straight into finance after school, despite failing mathematics. He got his break in the mid-1980s as a clerk with Coutts, then moved to other banks, including Morgan Stanley, before landing a job at Barings as a derivatives trader.
His ambition, aggression, and success trading Japan’s Nikkei 225 Stock Average impressed his bosses. He quickly moved up the ranks and was eventually placed in charge of the trading floor and transaction-settlement operations at the company’s Singapore office. This position gave him the autonomy to make trades as he pleased.
Leeson’s trades initially made his employer millions. Then he started to lose. He hid his losses and attempted to recoup them by making risky trades with customers’ money. By the end of 1994, Leeson was down £208 million ($255 million). Rather than come clean, he continued to secretly try to recoup his losses by betting heavily on Nikkei futures. Then an earthquake in Kobe, Japan in January 1995 sent the Nikkei tumbling, pushing Leeson’s losses to more than £800 million, a figure that exceeded his employer’s available capital and reserve funds.
Barings was declared insolvent less than a week after Leeson’s trading losses were discovered. A few years later the bank was sold for just £1.
Fast Fact
In his autobiography, Leeson blamed his reckless behavior on his employer’s high expectations.
The Aftermath of Barings’ Downfall
Leeson was sentenced to six and half years in a Singapore prison. During his time there, he wrote an autobiography, “Rogue Trader: How I Brought Down Barings Bank and Shook the Financial World”, which eventually inspired the Hollywood film starring McGregor.
After his release, Leeson published another book, earned a degree in psychology, and held various jobs, including as a speaker advising companies about risk and corporate responsibility, and, later, as head of trading at Bizintra Financial Academy, a company that teaches people how to trade.
What Is Leeson Doing Now?
According to his LinkedIn profile, Leeson still gives speeches, while also hosting the Rogue Trader Podcast, and acting as the CEO of Bull & Bear Capital, where, he says, he divulges how he trades his money and analyzes the markets. In 2023, Leeson confirmed he was also working for Red Mist Market Enforcement Unit. His job there, he said, is to investigate financial misconduct and help investors get compensation in court when regulators are unable to help.
The Bottom Line
Nick Leeson’s stint as a rogue trader lost his employer and investors enormous amounts of money, cost many people their jobs, and destroyed a centuries-old bank credited with helping to put the U.S. on the map. He became the face of financial misconduct and is now using the knowledge he gained to help protect people from similar wrongdoing.
