Leeson thriving during Credit Crunch

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Nick Leeson: how the original rogue trader at Barings Bank is thriving in the credit crunch
Nick Leeson, the man who broke Barings Bank and whose name became a byword for financial crisis, is now lecturing others on the current recession.

By Peter Culshaw
Last Updated: 7:46PM GMT 08 Jan 2009

The original rogue trader: Nick Leeson at the Galway United ground Photo: Bloomberg News
As the financial crisis rolls on, at least one person is doing well – the original rogue trader, Nick Leeson. Not only has he launched a successful career as an after-dinner speaker, lecturing others on where he went wrong, but his name has become almost a shorthand for financial miscalculation, invoked to cover everything from Bernard Madoff's suspected $50 billion scam to Gordon Brown's Leeson-like strategy of "throwing someone else's money at the problem rather than facing up to his original mistakes".
Although he has been eclipsed by Madoff, and Jerome Kerviel of Société Général, in the league table of financial rogues, Leeson is aware that his notoriety will not be going away any time soon. "A couple of friends rang up to tell me I wasn't number one any more – but the thing is, what I did was the most embarrassing thing I've ever done. I'm not going to go around with a paper bag over my head, but it's not something I'm proud of."
In hindsight, Leeson sees the failure of Barings Bank, thanks to his failed bets on the market, as the canary in the coal mine. "I completely recognise my fault in what happened, but it was clear Barings were incompetent, and their lack of oversight was appalling – all the glamour and brains and power were going into inventing new, complicated ways of making money." As with Madoff – and the banking system in general – no one wanted to look too closely. "The head office and the Singapore office wanted to believe everything was fine – that way they kept their bonuses."
The full extent of Leeson's crimes is still hard to take in. Barings let him be chief trader while settling his own accounts, enabling him to bury his mounting losses in an error account numbered 88888 (eight being a lucky number in China), trying to clear the debt with ever more risky investments. It was, he says "a deception an eight-year-old could have spotted". The wild expat lifestyle of Singapore also helped: "They might send a couple of guys from London, and we'd often take them out drinking and set them up with some female company – they would stagger into the trading floor late in the session, and didn't get around to asking the questions they should have asked."
Leeson hasn't lost his working-class Watford accent, and is still the bright, energetic and personable character whom Barings headhunted in 1990. He's calmed down, he says: he isn't the brash kid who drank like a fish and was arrested in Singapore for baring his buttocks at a group of air hostesses. After being locked up for four and a half years in Singapore's infamously tough Tanah Merah prison, and surviving cancer and divorce, he has a new day job: as CEO of an Irish football team, Galway United.
When I meet him in Ireland, he's fuming about the team, who have lost – again. "Those bastards should be fired – especially the goalkeeper".
Life in tranquil Galway doesn't seem to be so relaxing, I suggest. He waves me off: "This is just everyday aggravation. It's nothing I can't handle. I'm the living embodiment of the saying that what doesn't kill you can only make you stronger."
The 40-year-old has been in Galway for five years now, after marrying his second wife, Leona, in 2004. They met when Leeson was studying for a psychology degree after leaving jail, and he now lives with her, his stepchildren Kersty and Alex, and his son Mackensey. The latter was something of a miracle. When he almost died from colon cancer in Singapore, "they accidentally overdosed me on the chemotherapy, so there was a doubt it would be possible [to have a child]".
He has been given the all clear from cancer – "It could come back at any time, but so far, so good" – and has recently celebrated Mackensey's fourth birthday. "I just hope he does what he wants to do, I'm not going to interfere. I might try to talk him out of being a banker, though." Leeson laughs. "I accept that people are going to call me a rogue trader, or disgraced banker, or whatever – I'm not going to escape that for as long as I live."
Especially not because it helps him make a living. His main income these days comes from after-dinner speaking, or talks to economic forums: "Often it's in places that have seen recent success, like Estonia or Iceland or Dubai, but where they have little experience in developing systems of oversight."
He has recently spoken in Prague, and also addressed options traders in Moscow – "a glaring example of capitalism gone wrong". His favourite joke on these occasions is one told to him by a friend: "I've heard of people writing a cheque that bounced, but you were the first to write a cheque and the bank bounced."
There is a limit to how much he's willing to play up to his image – for example, he has declined the invitation to appear in I'm A Celebrity, Get Me Out Of Here! Theoretically, he is still subject to an injunction for £100 million (which, in a sign of the "ludicrous" excesses of recent times, did not stop him receiving five or six credit card applications as soon as he returned to Britain after being released from jail).
The profits from Rogue Trader, the autobiography that was turned into a film starring Ewan McGregor, went on his seven-figure legal bill. "I wrote 80 per cent of the book, and a ghostwriter wrote 20 per cent. He told me that if I upped the class-warfare aspect, and made the Barings bosses seem like upper-class twits, it would sell more copies. They were incompetent, but not as dumb as the book and film made them out to be."
There were also some changes to the story. "The section where I was confidently dealing with life after arrest wasn't right. For the first weeks in jail in Germany I spent most of the time crying and feeling very sorry for myself, bewildered and frightened." The most important thing being in jail taught him, he says, was not to worry about things he couldn't change, such as being strip searched, or having no water to wash with. The only time he did get aggressive was over his demands for prompt medical attention when he was diagnosed with colon cancer.
One thing that got him through the experience was his notoriety. "Most of the other guys were Triad gangsters, but I had status through my notoriety – they were impressed by the fact that I'd got through more than £800 million."
He agrees that he probably has an addictive personality. "When I was released from jail, I went to Bali and went fairly crazy. One night I was with some friends who dabbled in ecstasy and ended up taking eight tabs in one night. I was lucky to still be alive. So it's a tendency I have to watch. Certainly traders have some of the same addictive qualities as gamblers."
In a small way, he is still playing the markets: as well as his talks, he still trades from his laptop, betting "between 2,500 and 5,000 euros a week" – and he has made money in the past year trading on the dollar and on oil prices. "You have to have an opinion. You study a few charts and see where the support levels are and put a stop to limit the losses."
Looking back, he thinks it was his desire to retain status with his colleagues and his wife that stopped him coming clean earlier, when Barings – and his job – might have been saved.
"I had an inflated idea of what I would achieve," he says. "I thought I would end up at the top, very wealthy and making key decisions." Now he claims that "success is putting food on the table for my family. I do meet some status-obsessed people who think if you haven't got a great car or house you aren't worth talking to. But I've found that some of the most amazing individuals are those for whom possessions mean little. I don't feel any desire at all to be at the top of the tree."