Nick Leeson was the trader whose unauthorized and concealed derivatives positions brought down Barings Bank in 1995.
Working at Barings Futures Singapore, Leeson was supposed to conduct relatively low-risk arbitrage between Nikkei 225 futures markets. Instead, he used the bank’s money to make increasingly speculative trades and hid mounting losses in an internal account numbered 88888, known as the “five-eights account.”
The crisis worsened after the January 17, 1995, Kobe earthquake disrupted Japanese markets. Leeson continued betting on a rapid recovery, but the Nikkei fell further. By the time he fled Singapore on February 23, losses had reached about £827 million—roughly twice Barings’ available trading capital. Barings was declared insolvent on February 26.
Leeson was arrested in Germany, extradited to Singapore, and sentenced to six and a half years in prison. His autobiography inspired the 1999 film Rogue Trader. The case is also a classic lesson in failed internal controls because Leeson handled both trading and settlement functions.