The “rogue trader” Nick Leeson who brought down Barings Bank has for the first time made a heartfelt apology to his former boss.
He told Peter Norris, now Chairman of Virgin Group Holdings, of his remorse after the two were brought together for a BBC radio programme.
Mr Leeson brought down Barings Bank with losses of £827 million in 1995.
He served more than three years in a Singapore prison for forging documents and deceiving the bank’s auditors.
After hearing his apology, Mr Norris told him: “I think I wanted to punch your lights out.”
Mr Leeson replied: “I wouldn’t have blamed you if you had.”
The former trader was reunited with his boss and former colleagues at Barings for Radio 4’s The Reunion which looks back at the bank’s collapse.
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Mr Leeson was Barings’ star derivatives trader on the Singapore International Monetary Exchange and regularly reported huge profits. But he was losing Barings and their customers hundreds of millions of pounds.
He was able to disguise the losses by keeping control over his own “back office” where trading accounts were reconciled.
He set up a secret account with the number 88888, the so-called “five-eights” account, to hide the extent of his losses from his employers.
Barings was Britain’s oldest merchant bank founded in 1762. It was famed for its “word is my bond” approach to banking. Its crash was a massive shock to the financial establishment.
Mr Norris recalled the moment of realisation that things had gone badly wrong in Singapore: “There was a discrepancy of $140 million (£85 million) on the accounts. No-one could find Nick, so I hit the panic button and said ‘crack the desk open’.
“Five or six hours later, we discovered the secret account details and I found out what had been happening.”
Greed and fear
Another former colleague Nicholas Edwards, then an investment banker with Barings, described Mr Leeson as “struck by a mixture of greed and fear over a number of years”.
Responding to the apology, Mr Edwards said: “I’m sure he’s full of remorse, but am I sympathetic? No I’m not. He’s lost a lot of people their livelihoods, their pensions and their family fortunes.”
Having been extradited from Germany, Leeson was convicted by a Singapore court in 1996, pleading guilty to two counts of deceiving the bank’s auditors and of cheating the Singapore exchange by forging documents.
He served three years and seven months of a six-and-a-half-year sentence in Singapore’s Tanah Merah Prison.
“I was 25 years old. I should have turned round and asked for advice, but I didn’t,” he said. “It was the most embarrassing period of my life and the only person who did anything criminal was me.”
Reiterating his apology to his former boss he said: “I offer an apology to Peter – but whether it will make any difference to him I don’t know”.
Since his release from prison, Mr Leeson has written a couple of books and gained a psychology degree.
Most recently, he resigned from Galway United FC in February 2011, having risen to chief executive officer since joining the company in 2005. He is an after-dinner speaker and attends conferences.