Word: nicked
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Listen, let me tell you something: I knew Nick Leeson. Oh, OK, not personally. But as a reporter, I covered Leeson, the young trader who single-handedly broke the bank at Barings in 1995. And you know what? This kid Jérôme Kerviel, the 31-year-old who managed to lose $7.2 billion (that's with a B) at Paris investment bank Société Générale in just a few weeks, he's ... he's ... so much like Leeson that it's scary...
...interest on the Nikkei futures, along with 85% of the Japanese bond contract that he traded. Those were staggeringly large positions. But those to whom he reported, who made more money and had more responsibility at the bank - his "superiors," in other words - had nary a clue, because young Nick had for a time devised a way to hide his trades from them. More than $1 billion in the hole, and with no hope of digging his way out, he skipped off to a Malaysia beach resort with his wife to sip umbrella drinks for a few days before their...
Maybe so, but the basics of grand, bone-jarring deceit cut across cultures - and decades. Like young Nick, Kerviel also devised a way to hide his trades from asleep-at-the-switch "superiors." And like Leeson, he disappeared for a few days, apparently holed up in a Paris apartment, just before the roof fell in. The comparisons are more than cursory. One of the lessons of Leeson (supposedly burned into the brain of trading desks everywhere) was to separate what banks call "the back office," where trades are processed and recorded, from the trading desks. Leeson had run the back...
Three days was all it took in 1995, after the bank-busting deals of rogue trader Nick Leeson had come to light, for the venerable Barings Bank to file for bankruptcy and forever vanish. Managers at France's Société Générale may well be wondering why their agony endures, a week and counting after a far bigger scandal that cost it $7.13 billion to unwind - and that subjected its risk control procedures to public mockery. Yet the end is still not in sight. The SocGen's board of directors, meeting in emergency session, left...
...rale executives had discovered Kerviel's massive illicit operation, after the trader had gambled positions worth about $73 billion. That's actually more than the bank's entire worth by around $25 billion. Instantly, this evoked comparisons in the media with another lone rogue, Nick Leeson, whose fictitious trades in Singapore lost $1.4 billion for Barings Bank in 1995, wiping out the bank's cash reserves. Leeson was arrested after an international manhunt, and spent more than three years in a Singapore jail. By contrast, Société Générale executives simply suspended Kerviel - perhaps...