Nick Leeson
Nick Leeson
IIA
Nick Leeson the rogue trader in 1992 single handedly destroyed Britain's oldest merchant bank, Barrings Bank founded in 1762.
Barings believed that it wasn't exposed to any losses because Leeson claimed that he was executing purchase orders on behalf of a client. What the company did not realise is that it was responsible for error account 88888 where Leeson hid his losses.
As the losses grew, Leeson requested extra funds to continue trading, hoping to extricate himself from the mess by more deals. Over three months he bought more than 20,000 futures contracts worth about $180,000 each in a vain attempt to move the market. Some three quarters of the $1.3 billion he lost Barrings resulted from these trades. When Barings executives discovered what had happened, they informed the Bank of England that Barings was effectively bust. In his wake Nick Leeson had wiped out the 233 year old Baring investment Bank, who proudly counted HM The Queen as a client. The $1.3 billion dollars of liabilities he had run up was more than the entire capital and reserves of the bank.