The AlphaMind Podcast is sponsored by The Society of Technical Analysts
Feb. 24, 2020

#34 Nick Leeson - Rogue Trader: In His Own Words

#34 Nick Leeson - Rogue Trader: In His Own Words

25 years ago this week, Barings Bank, founded in 1763, was brought down by the calamitous and illegal trading activities of one of its futures traders, Nick Leeson. Working from their Singapore office, Lesson’s accumulated trading losses amounted to over £800 billion or close to $1.4 billion at the time. 

Leeson had been hiding trading losses for the previous 2 1/2 years in a false account he had created, the now infamous 88888 account. For a while these losses were of a size that was concealable, however in January 1995, the losses started to spiral out of control. Leeson had been placing a series of huge bets which relied on the Japanese Stock Market remaining relatively stable. However, the market was rocked when a huge earthquake struck the Japanese city of Kobe. 

As the losses started to mount, Leeson upped the ante, placing even larger bets, effectively doubling up, but the recovery never came, and the losses started to increase exponentially. Eventually, with no hope of recovering the losses, Leeson left a note which simply said, "I'm sorry" and he fled Singapore. An international manhunt followed, gripping the world’s media.

After a few days, Leeson handed himself in to the German authorities, and was later extradited to Singapore where he was jailed for over 6 years alongside some of Asia’s most notorious triad gang members. 

Leeson was released a couple of years early in 1999 on health grounds after being found with colon cancer with a prognosis which was not favourable. 

In this frank and honest interview Leeson talks with AlphaMind podcast co-hosts Mark and Steve about his trading activities. He talks about his failings and those of the system around him. He tells of living with the stigma of being the world’s most infamous rogue trader. He talks about his time in prison, the mental challenges he faced, and how he rebuilt his life following his recovery from cancer and release from prison. Leeson also shares some lighter moments, including how he was hounded by tabloid journalists convinced he had hidden the lost money somewhere.

Listeners may gain a new and somewhat surprising respect for Leeson after listening to this fascinating interview.