Nick Leeson’s unauthorized deals caused Barings Bank to collapse into bankruptcy in 1995.
Leeson worked as a derivatives trader for Barings’ Singapore operation. He accumulated enormous losses while trading futures and concealed them in an error account. His losses grew after he made increasingly risky bets on the direction of Japanese markets.
Barings Bank, founded in 1762, could not absorb the losses and was declared insolvent in February 1995. Dutch financial group ING bought the bank for the symbolic price of one pound, taking over its assets and liabilities.
The collapse is a classic example of how weak internal controls and inadequate separation between trading and settlement functions can allow losses to remain hidden. Leeson fled Singapore but was arrested in Germany, extradited, and sentenced to prison. His memoir later inspired the film Rogue Trader.