The collapse of Barings, Britain’s oldest merchant bank, was announced on this day in 1995, after one of its traders had run up trading losses of well over £800 million.
It transpired that Nick Leeson had been making unwise speculative investments in futures contracts basically betting on market movements around the world while taking advantage of a lack of oversight to hide growing losses.
As well as being the chief trader in the Singapore office, Leeson was also responsible for settling trades jobs usually done by different people. Trusted for his earlier successes and effectively unsupervised by London, he began making bigger and bigger gambles to offset losses.
The 28-year-old found he was able to hide debts, and fun…
Read the full article at: http://home.bt.com/news/on-this-day/february-26-1995-rogue-trader-nick-leeson-breaks-barings-bank-11363964040560