TORONTO -- The rogue trader who caused the collapse of British merchant bank Barings PLC in 1995 says none of it might have happened if he had done one thing differently the first time he made a mistake and lost money on a trade.
Nick Leeson, 41, says he should have asked someone for help figuring out what to do. But at 25, and desperate to be a big success, he instead hid his mistake and launched into a series of escalating bets to try to dig himself out of a huge hole.
"At that age, you see asking for help and advice as a sign of weakness. But it's not, it's a sign of wanting to do things correctly and learn," he told reporters yesterday.
The message was part of the advice Mr. Leeson gave yesterday to a class of business graduates when he spoke at the Richard Ivey School of Business at the University of Western Ontario in London. His speech came hours before the students took part in the business school's Ring Tradition Ceremony, where they pledged to act ethically and honestly in their careers.
Mr. Leeson was in charge of futures and options trading in Baring's Singapore operation when he lost $1.3-billion (U.S.) in bad derivatives trades, leading to the collapse of a 233-year-old British institution. He served 4½ years in a Singapore prison for his role in the scandal.
At a news conference in Toronto later yesterday, Mr. Leeson told reporters he could have benefited from hearing a story like his when he was beginning his ill-fated financial career.
"If an episode like mine had been highlighted or explained to me, I might have made some different decisions," he said.
Mr. Leeson now lives in Ireland, and has remarried. He coaches a professional soccer team and earns large fees on the speaker's circuit. Ivey would not reveal what it paid Mr. Leeson to come to Canada, but his speaker's bureau website says his standard rate for a speech is between $12,000 and $20,000.
He said he accepts that some people don't find it appropriate that he now earns a living talking about his past mistakes.
"That's fine - everybody's entitled to their own opinion. And at the end of the day, if people don't want to come and listen, they don't have to."
He said he is not surprised that rogue traders continue to emerge at major financial institutions - including the recent case of Jerome Kerviel at Société Générale SA of France. He said the financial industry is filled with aggressive and ambitious people who want to be big successes.
He added risk management practices in the industry fail because the people who run the institutions don't understand the complex products and trading strategies employed by derivatives traders in their operations.
He said Singapore regulators sent a letter of concern to Barings at one point while he was hiding his losses, and his supervisors ultimately passed the letter down the line to him to answer because they didn't understand what the regulator was talking about.
"Obviously, I wasn't going to highlight anything that was going on," he said.
© The Globe and Mail
