Latest financial fraudster joins long and infamous list

IF previous rogue traders are anything to go by, notoriety and possibly even a Hollywood film await the person behind the €1.66 billion UBS fallout.

Nick Leeson hit the headlines in 1995 when he single-handedly destroyed 233-year-old Barings Bank, which proudly counted the Queen as a client.

Leeson’s early career was a success, quickly making an impression with Barings and being promoted to the trading floor.

He was appointed manager of a new operation in futures markets on the Singapore Monetary Exchange and was making millions for Barings by betting on the Nikkei Index.

But things began to unravel when he started making losses and set up a secret account to hide them.

The trader began taking more risks to recoup his losses but problems spiralled out of control and he fled, leaving behind a devastating financial hole and a note on his desk saying: “I’m sorry.”

He was eventually arrested in Frankfurt, Germany, where he tried to escape extradition to Singapore.

He failed and was sentenced to six and a half years by a Singapore court.

Leeson wrote a book which became a Hollywood film starring Ewan McGregor and Anna Friel. In 2006, he was appointed chief executive of Galway United Football Club, stepping down last January.

Last year, Societe Generale trader Jerome Kerviel was convicted of being responsible for losing the bank around €4.9bn.

Kerviel, 34, also wrote a book, Trapped In A Spiral: Memoirs Of A Trader.

At trial, he claimed the bank knew about the risk-taking. The bank, in turn, said Kerviel made bets of up to €50bn — more than SocGen’s total market value — on futures contracts on three European equity indices, and falsified offsetting transactions to mask the size of his bets.

Kerviel was sentenced last year to three years in prison although he remains free because he has lodged an appeal. He is reportedly working as an IT technician in the Parisian suburbs.

His moody Gallic good looks and story won sympathy across France, with women wearing T-shirts with the slogan “Jerome Kerviel’s girlfriend”.

Another read: “Jerome Kerviel, 4,900,000,000 euros. Respect.”

Other episodes included:

- In 2002, John Rusnak, a currency trader at US bank Allfirst, based in Baltimore, Maryland, then a subsidy of AIB, pleaded guilty to fraud amounting to $691 million (€500m). He was sentenced to seven-and-a-half years in prison after doing a deal with prosecutors;

- Toshihide Iguchi, a former car dealer, lost more than $1bn at Japanese bank Daiwa, in fraudulent trading over 11 years from 1984 onwards.

- In 1991, the Bank of Credit and Commerce International (BCCI) was seized by regulators, after auditors reported huge losses from illegal loans to corporate insiders and trades.

The bank collapsed with debts of more than £8bn (€9.1bn) and about 250,000 savers lost money.

- Yasuo Hamanaka, a trader at Sumitomo Corporation, one of Japan’s largest banks, lost the company $2.6bn in unrecorded copper market trades.

Known as “Mr Five Percent” for the share of the global copper market he controlled, he was jailed for eight years in 1996.

- In Britain, 90,000 investors were left out of pocket after Morgan Grenfell fund manager, Peter Young, who controlled £1.5bn of funds, broke City rules by investing in high-risk unlisted European securities.

More in this section

Select your favourite newsletters and get the best of Irish Examiner delivered to your inbox