Nick Leeson is a former futures trader, best known for his part in bringing down Barings Bank in 1995 through a series of fraudulent trades that lost the bank £830 million. He was sentenced to six-and-a-half years in a Singapore prison, before being released in 1999 having been diagnosed with cancer. In prison he wrote his autobiography, Rogue Trader, which was subsequently made into a Hollywood film starring Ewan McGregor.
Following a stint as CEO of Galway United FC in Ireland, Leeson is now a successful after-dinner and keynote speaker.
Read our exclusive interview below and see our timeline of events for a history of Nick Leeson.
You’re famous for part in the collapse of Barings Bank in 1995, which at the time was Britain’s oldest merchant bank. What was the point at which you knew the situation that you had created had gone past the point of no return?
It’s quite difficult to say because when you’re embroiled in the moment you become very blinkered to what’s going on around you. I wasn’t really taking too much notice of anything else – I was totally focussed. Even when the situation was getting very serious, in 1994, it was all about simple self-preservation, just trying to survive day-by-day. There were always little glimmers of hope that I’d be able to turn it around, but by the end of 1994 volatility was starting to pick up again, lots of rumours were swirling around in the market and the prices were being skewed against me; there was a growing group of people who were suspicious about what was going on, and there were ways that they could adjust the prices of the options in order to cause me more pain.
Towards the end of 1994 was probably the first time that it dawned on me that I wasn’t going to be able to get out of the situation. But I still couldn’t tell anyone about what was going on.
The stress must have been unimaginable.
I was literally the only person who knew. There’s always this idea that someone else might’ve been complicit, but that’s completely wrong. There’s no reason for me to try to cover up for someone 20-odd years later. They should’ve known what was going on, but they didn’t. The stress was extreme, and the coping measures ended up causing as much pain as the stress itself – like using alcohol to block things out. There’d be many a time that I’d go out for drinks in Singapore and I wouldn’t remember where I ended up. Sometimes a taxi driver would take me home, often via a police station. It was probably a combination of the stress and these coping mechanisms that eventually led to the cancer diagnosis when I was in prison.
Did you feel like you’d never get caught?
If you look at it, the reason why it all unfolded in the end was because Barings basically ran out of money. It wasn’t necessarily a case of someone finding all this out, it was the fact that I had the entirety of Barings Bank’s capital out with me in Singapore. If they’d wanted to do a trade or finance something in another part of the world, they simply couldn’t do it. Barclays wouldn’t lend to them anymore. Citibank wouldn’t. They’d issued a bond on the stock market and that had all been used up. Their avenues to cash were gone, but I had £650 million with me in Singapore. The fact is that the situation couldn’t have gone on much longer anyway. The capital base of the bank was £250m and, like I said, I had £650 million with me in Singapore. You only have to do some fairly simple maths to understand that’s not going to work.
What drove you to do what you did?
I think there were a couple of things. At the end of the day, putting a trade in an error account is wrong and everybody knows it’s wrong, but I used to see it happen every day during my time in London, Tokyo and Singapore. That kind of anaesthetises you to the fact that it’s wrong, so when you’re in that situation it doesn’t seem like a big deal. You do it in the belief that you’re going to be able to right the wrong within a couple of days and you’ll at least break even. It didn’t cross my mind that I’d be holding these positions for a much longer period of time.
The big driving force for me was always to be successful, and that was exacerbated by a huge fear of failure. The fear of failure stopped me telling everybody and the need to be successful kept me going. There’s not too much rationalisation when you’re in the moment – you’re just looking for these little moments of victory to turn it around. Every minute of the day I was expecting the game to be up. If there was a knock on the door or the phone went I was literally sh*tting myself that someone was going to ask me a simple question that would expose me. Slowly, over a period of time, you kind of think ‘people aren’t asking the questions they should be – I’ve got more time to turn it around’. Eventually, I was sitting there thinking I could do whatever I wanted without anyone asking any questions.
The typical image of a city trader is of someone who’s very flashy, extrovert and arrogant. Is that how you would describe yourself at the time?
I was completely the opposite, actually – very quiet and introverted. Not a great communicator. The newspapers at the time loved putting pictures on their front pages of city boys going out, getting beered up, snorting coke and creating mayhem, but it’s like everything… not all footballers have massively lavish lifestyles. Some of them are quite sensible. I was just a normal working class kid who grew up in Watford, had a bit of a brain and prospered for a while on the city. I was always very socially adept – one day I’d be out with my mates in Watford, the next I’d be at a polo match with the upper echelons of society, and I could switch between the two very easily. I had lots of people at Barings and Morgan Stanley who thought they were my mate, but they weren’t really my type of people. At the same time, I didn’t want to be a mechanic working on cars like some of my friends. That didn’t really interest me.
You’ll always be notorious for what happened at Barings. Does that bother you?
No. Perhaps you could say I wasn’t too rational at the time in Singapore, but all things being equal I’m a very rational and realistic person. I try to place myself in other people’s positions. I’d be sat in a room with liquidators and you just have to understand that they’ve got a job to do. That’s the way I look at things. The notoriety has afforded me a good lifestyle since I left prison, and I get opportunities that most people leaving prison probably don’t get – barring Jeffrey Archer. You can be as notorious as you want to be but if you don’t work with the media, they’ll ruin you. So if someone wants an interview with me, I’ll do it. I think that in doing that, people get a better idea of who I really am rather than the image of that stereotypical trader.
Do you still feel guilt for your actions? A lot of people lost their jobs because of you – does that still weigh on your mind?
The job losses are often over-reported – I think the number of people who lost their jobs at Barings at the time was about six, and they were the people who worked for me in Singapore. You see all these stories about people losing their life savings from banks but no one ever had an account at Barings, it wasn’t that kind of bank. I read stuff about the Queen losing money from Barings – how on earth could the Queen have lost money from what happened? But the media loves that sort of thing. Obviously I’m guilty and therefore there’s guilt, but we’re 23 years after the event now. I’ve been truly remorseful, but there comes a point where you have to draw a line under it. If that affects people, so be it. I’ve been given a second opportunity and I’m going to take advantage of it.
You were sentenced to six-and-a-half years in prison for your crimes. Can you paint a picture of what it was like in Tanah Merah Prison in Singapore?
It was obviously very frightening. Singapore was very strictly controlled by the guards, but it was quite different to prison when I was on remand in Germany – there you were talking about murderers, drug traffickers and people who were serving very long sentences. In Singapore, because the guards had so much control, you tended to find that if things kicked off you just had to survive for about a minute before the guards came in and broke things up very quickly and aggressively.
Part of why I was able to survive in prison was because my crime had elevated me to the status of a sort of ‘über criminal’. In the minds of the other inmates I’d stolen two billion Singapore dollars and gotten away with it. It meant I was accepted by the Triad gang structure, and was allowed to speak to senior people within the organisations.
The thing about prison is that it’s boring – you’re locked up for 22 hours a day, there’s nothing in the cell, and you just have to get into a structure where you get through each day as best you can.
Did you ever fear for your life?
Not in Singapore. The surveillance is too strong. I mean, I saw some pretty extreme violence, but it wasn’t directed at me. It tended to be gang-on-gang, and I was the only person in the prison who wasn’t affiliated to any organisation.
It was while you were in Singapore prison that your health seriously deteriorated, wasn’t it?
They always used to change my cell mates in Singapore, so I’d routinely get people associated to a variety of the different Triad gangs in with me. Eventually they’d have a disagreement with someone, throw a few punches and get moved somewhere else. On one occasion I had two Malay inmates who, despite being in different gangs, were both Muslim; they prayed together. When prison officials tried to move them, I refused to go back in – I was saying, ‘What’s the point of moving them on?’ I was marched down to the maximum security unit. You got your food through a cat flap, they’d turn the lights on at night and out during the day… it was dreadful. When I came out of there I’d lost a lot of weight and had a pain in my stomach. Eventually I went to see a doctor: he diagnosed me with anaemia and gave me iron tablets.
Can you remember where you were when you found out about your cancer diagnosis?
By that stage I was in a medical unit where the guards all had guns, so I was in a fairly negative environment anyway. I woke up in a blur, there were all these colourful images on screens and then someone told me I had a tumour. It all happened so quickly. I had an emergency operation to remove it, so I didn’t have time to go through much ‘woe is me’. The prognosis wasn’t good; it was all about pure self-preservation. But because everyone was expecting me to die, I’d get up every morning and exercise rather than sit back and wallow. I was imagining the chemotherapy passing through me when I was sweating.
Can you describe the elation when you were released from prison?
There’s elation because one chapter is closed, but there was also a lot of worry in terms of what was going to happen next. Going back and facing the media was a big thing, because that was all new to me. The joy of being released was definitely tempered with fear.
Do you care what people think of you?
When you’re in the public eye there’s always a perception about who or what you are, and in prison you go through a lot of self-reflection about what you stand for. What my family and true friends think of me is important, but as for what ‘Billy down the road’ thinks… I don’t really care. It has absolutely no impact on me. I think everybody would prefer to be liked, but when you’re in the public domain the perception can outweigh reality. If you have high self-esteem you can bat that stuff away.
When you’ve been in prison and beaten cancer, someone calling you a name on Twitter is hardly a big deal is it?
That’s one way of looking at it. Someone the other day on Instagram said to me: “My wife says you’re a thief.” To be a thief you have to steal something, and I never stole anything. I just don’t respond to it.
I don’t think there are too many struggles that I couldn’t face after what I’ve been through. You have some positive experiences in life and some negative ones – you just have to learn from them. Prison certainly taught me a few things. Being diagnosed with cancer is simply one of those things you can’t do anything about – you just have to deal with it.
Turning to more current matters, what do you think of the current state of the global economy?
I think it has all the hallmarks of more problems looming. At the moment Ireland is overheating again, and property prices in Dublin are back to where they were previously. The lending isn’t quite as reckless as it was before and there are more controls in place, but there are certain locations around the world that are a worry in terms of things going wrong – there are definitely similarities with what happened in the lead-up to the global financial crisis of 2008. Whenever financial markets are going well then complacency sets in, and that’s normally when you start to see problems unfold.
Is it conceivable that another large financial institution could go under like Lehmann Brothers did and precipitate another global collapse?
I don’t think so, but then you look at regulation and control, which has improved ten-fold over the last decade or so, so the environment is different. But there are others issues – look at the current situation with the Turkish lira collapsing. Could Turkey be the next Lehmann Brothers? If you look at Lehmann, they were tied in to lots of deals around the world so when they under pressure it reverberated back through the system. It might not be a bank – it might be a country.
How well do you think the British economy is currently being run?
Brexit is a disaster. The British economy doesn’t really need running too much, other than a few rate increases from time to time and some monetary supply, but the government is a shambles. They’re verging on embarrassing. If I voted I’d probably vote Conservative, but I just think the things that have happened over the past few years haven’t been well thought-out. Parliament and government to me are a bit like financial regulators – the best people don’t become politicians, do they?
It’s hard to say what effect Brexit is going to have on the British economy, because we’re so far away from whether or not there’s actually going to be a Brexit. I think there could quite easily not be a Brexit at this stage. Theresa May’s hold on power is very tenuous, and I think there’ll be a few more twists and turns to go on that yet…