The Nick Leeson Visit (25-10-00)
No one knew quite what to expect from Nick Leeson's question and answer session. He had asked the EARS committee to prepare questions 'to start the ball rolling', in case the audience froze up and didn't know what to ask. As it happened, the flow of questions never once stopped in two hours.
"How do you feel about being an anarchist icon" came the first, and they didn't get any easier! At least no one asked where he'd hidden the money.... Nick appeared well - very normal, but he stood there and answered questions on his own painful experiences without flinching, in a way that had to command a certain respect. He said he'd found the fact that he had brought down the UK's oldest banking institution "highly embarrassing", rather than getting a kick out of it. The money lost seemed "different to the money in your pocket" (perhaps because you've never had over 700 million pounds in your pocket).
Very briefly, Nick was seconded to Singapore by Barings as a young and relatively unproved accounts clerk. Due to the rapid expansion of Barings Settlements, he quickly found himself in charge of setting up the shares trading office there. He traded on the Nikkei index, dealing in yen. He would work in the Singapore Money Exchange (SIMEX) until trading closed at 2pm, and then would go to the office (or 'back room') where all the records of the day's trades were recorded. This was Baring's big mistake, as there was no one to check if the records matched the actual sales. Usually the back room accounting would have been done by a different person, to detect any dodgy deals, but unsupervised, it was too easy for Nick to cover his tracks. The negligence of Barings, Simex and Cooper's and Lybrands, (Baring's auditors) in not detecting him earlier is now the subject of a huge court case (see below).
When his first loss was recorded (according to the movie, when a bumbling trader on the floor sold instead of bought and Nick tried to help her cover it up), Nick started up his '88888'account, into which he filed all the losses. He then traded in that account's name, trying to recoup the losses. He had to gamble to try and get that figure above zero, by using money that wasn't there. Relying on funds from London to buy more shares, he seemed to be riding the crest of a wave until an earthquake in Japan plunged the Nikkei index into chaos. Confidence in the yen fell, the shares Nick was effectively gambling with lost their value, and his fraud was revealed.
Given the complexity of the situation, and it would have helped if Nick had given us a potted guide to what actually happened. One of the problems was that the audience was very mixed - with accountancy students and bankers asking technical questions, and the vast majority of us still rather in the dark, beyond knowing that he lost an awful lot of money....
Still, Nick said that he preferred people to ask questions that they found interesting, and the most gripping parts of his talk had the hall in silence. His descriptions of solitary confinement, where they turned the light on at night, but plunged the cell into blackness during the day, and gave you food through a cat-flap, were horrific. He said he just walked up and down, pacing away the time. He said the thing that kept him going in prison were the books and that people sent him (often random strangers, students telling him their dissertation topics!)
Then came the desertion of his wife, and the discovery that he had cancer. No subject seemed too personal to touch on - he emphasised how we should be more willing to talk about cancer. He is in the five year waiting period now before he can be told whether he is in the clear or not.
How you stay 'normal' through all of that is anyone's guess. But Nick is taking a degree (Psychology at Middlesex) and waiting for the litigation against the auditors to start. He helps with the preparation for the court case, and is taking things day by day. To my mind, he seemed like a normal guy who got himself in a very abnormal situation. He has been through a lot these last few years and if you were to ask the question "has he paid off his debt to society?", I think my answer would be, probably not, but perhaps that debt is too large and should simply be cancelled.
summary Kate Mulrenan (Nov 00)