How The Original Rogue Trader Rebuilt His Life

like in any news. Yeah, yeah, you're probably right. Um, do you want to go ahead and introduce who it is or say who it is? Yes? I will, And you know, I think one also might characterize I said that he's are going to be our most famous guest ever. Others would probably say he's our most infamous guest ever. But our guests this week is Nick Leeson. He is famous for being probably the biggest quote unquote rogue trader

of all time. In the early nineties, it was his trades and the attempt to hide them that brought down the UK's Bearings Bank, which was a bank that had been around for over two hundred years. He then it was discovered and he went to Singapore where he spent years in a Singapore in prison, there's books about him, there's a movie made about him, and then I think like after all that ended, probably most people never really thought about him again and probably have no idea what

he's been up to since. Right. But Nick Leeson is almost the original rogue trader of modern time. Right. You mentioned there was a movie famously with you and McGregor called Rogue Trader, and it was I'm sure it was the first time that a lot of this stuff entered the public consciousness. And as you mentioned, he wasn't Singapore at Barings Bank when he did his rogue trades, and then he ended up in jail, and then he sort

of mounted a comeback career. Right, Yeah, absolutely, And I do think that point you made is really key that from time to time, and I'm sure we'll have them again in the future, a roague trader emerges someone who went way beyond their risk limits at a financial institution, tried to cover them up, failed to cover them up, and then their behavior or their trades resulted in staggering losses. But as you say, I do think that term probably

originated with Nick. I guess I'm not a pent sure but that's something we can bring up, so without further ado, Nick Leeson, thank you very much for joining our blocks. Um, you're very welcome, looking forward to it. I guess i'll start. Were you the first rogue trader? I? Look, I think there were many before me. There probably weren't as many that hit the headlines as as dramatically as I did. I think, you know, road trader is one of those things that well, roague trading is one of those things

that goes hand in hand with the market. People are would often mismark their positions the the marketer market, or they would trade outside of their positions. I was certainly not the first person to do something like that at Bearings. I was definitely the last one, and I probably took it a little bit further than anybody had prior to that.

And I think obviously one of the reasons that I am so well known for that road trading activity is the catastrophic effects that my actions had in the In the majority of cases, most road trading episodes of courts early early, and whilst they do financial damage to the institution, they don't usually result in the class of the bank. So I I don't think we want to dwell too much on your actual trading at Bearings, because at this

point it's been really really well covered. But for the purposes of this podcast and the conversation that we're about to have, what would you say about what you actually did at Bearings? Was it a road trade? Was it authorized? Was it as insidious as some people made it out to be. I know, look, it was definitely road trading I got myself into. I had an awful lot of autonomy in Singapore. I could pretty much do what I wanted.

It was a remote subsidiary of the bank. There wasn't a great deal of control or expertise that surrounded me in terms of making sure that I was doing what I was supposed to be doing. So when things started go wrong and I found myself in a difficult situation, it was it was a lot easier than you would expect it to be to hide those losses for a period of time. Now, you know, I used to wake up every day thinking that today would be the day that somebody would expose what was going on. It was

only ever supposed to be a short term thing. Like I said at the beginning, putting things into error or putting trades into error accounts overnight was was a regular occurrence appearings at the time. Um, obviously everybody appreciates that the that it's not correct, but people used to do it warehouse the trade overnight, I think it used to be called and then the following day they'd usually closed the trade out with hopefully no loss on the transaction. So I just took it a little bit. Oh, I

took it a lot too far. I mean, my actions were criminal. There were criminal from the beginning. Um, I knew what I was doing, I knew that I shouldn't be doing it. I continued, and you know I was rightly punished for my activities during that period. So Nick, what what would you say is the difference between a good trader versus a rogue trader who's trying to book profits. I don't know if there's if there's an easy differentiation.

I mean, obviously people, as everybody knows what their positions limits are, they know what they're supposed to be doing. People who work in the financial markets are intelligent. I think when you find yourself in a difficult situation, you're surrounded by people that can help you. And I just thought that I could cope with the situation that I was in. I didn't want to fail. That was one of the biggest things for me. It was always about succeeding and being successful, and I had a huge fear

of failure. So I didn't really communicate very well about anything that was going on with me or anything that was going on with me at that particular time. So I mean, being disciplined, being diligent, being accurate in everything that you do will separate those good traders from the bad traders, but or from a rogue trader. But I think one of my biggest sailants throughout that whole period.

And it's not something that you see or when you go back to the nineties nineties, just the lack of communication both from me as an individual, from the organization and creating an environment where people could talk about their failures and problems that they were facing within the organization

just really wasn't there. It was all about being successful, competing against other people and competing against other banks, and you know, only only the strong survive, and it wasn't an environment that was necessarily conducive to to owning up to what was going on. Number one, but also doing a really simple thing, which have changed the pattern of everything that I did and everything that happened to the bank.

And that's just simply asking for help and advice. And you know, I was twenty five years old at the time. I thought that I could cope with everything, and saw asking for help and advice as a sign of weakness. And you know, as you all know, banking back in the nineties wasn't really about showing weakness. I think that's really interesting how you characterize that just sort of the culture of not being able to make mistakes, fail or

ask for any advice or help from anyone. I think when people these days think about some of the risks that trading or proprietary trading takes, that they see a sort of inherent asymmetry in which a trader can capture a bonus if they have big upside gains, but if they don't have that, you know, they might lose their job. But that's the worst. They don't have unlimited downstat in the same way. Now, of course, every one ends up

in prison there it's different. But how much do you think that asymmetry is part of the mentality versus just what you describe sort of just it sounds a little different, not quite that calculating. We're just sort of a very sort of discouraging culture. Well, I mean, I think culture conduct has a huge part to play, and regulators and financial institutions are like spend a lot of time looking

at that these days. I mean, the short term ism of the bonus culture obviously has a is a key component of people's behavior, and I think a lot of banks and financial institutions are changing the way that that happens. But that bonus does create that short term approach to what you're going to get paid in the very near future, and that does cultivate a risk, a risk appetite that

can be quite unhealthy. But you know, I think if people I mean, like I look back over, I'm fifty one years of eight now, so this is you know, half of my lifetime ago as we currently stand, and you know, creating an environment where people can talk and and feel empowered enough to talk about things that they're experiencing within the work environment, I think it's a crucial factor.

And if you can, if you can then reduce some of that short termism that we see with the bonuses that are paid with in the world, of banking that it makes for a safer environment. You know, for me at the time, I come from a very working class background. I wanted to be successful. I wanted to do better than my family members have done and and sort of move along in terms of the way that that that my life was progressing and being successful with the key

part of that. And you know, I trying to announciate my failure or to try and confront it myself with I'm not going to say it's impossible, because you sometimes you just have to do it, but the you know, it was just something that I didn't do. During that time. Everybody sort of bowed into the first story that surrounded

me and it propelled everything forward. And you know, whenever everybody else is then getting paid bonuses and everybody's looking forward to their bonuses, it kind of sweeps you up into this mouse that you that you kind of have no control over. I know it's difficult to understand, but everybody was buying into the success story that surrounded me at the time. It's kind of amazing to me to think that you were twenty five years old when when

all this was happening. Um, let's fast forward a little bit, so you have the rogue trades at barings, they get discovered and eventually you go to jail for I think it was three to four years. What happened once you got out of jail, like, what was your initial thought about what your future was and what was your plan at that point? Yeah, well, I was sentenced to six and a half years in jail, so you get a standard one third remission. So I spent four years and

four months imprisoning Singapore. I had cancer whilst I was imprisoning Singapore as well, so when I was released, the first thing after four years in prison, you struggle to make decisions a little bit. So I was very reliant on my lawyer to help me through some of that decision making process. I think something quite weird had happened

in the period that I was away in prison. Things have changed in the UK and there was a infamy, celebrity, whatever you want to call it, and certainly in my case, it was infamy. People are intrigued by that, they're interested by that. So I had a very short window in terms of how I used to look at what I'd be doing for the next three months, the next six months or whatever. But then I started to get offers to do TV programs to talk about what happened during

my time at Bearings. I've written a book before I went to went to Singapore. I was originally arrested in Germany and spent nine months there writing the book Road Trader, that which which paid for my legal fees. I was reasonably well off, but I wasn't wealthy enough to baby the million and a half pound that it was gonna

cost to to mount a defense of my case. Not that there was much of a defense because I played guilty to everything, but it took nine months before I went back to Singapore, so there was some heavy legal fees that needed to be paid. So that was why I wrote the book Road Trader whilst I was imprisoned in Germany. But then when I was released, people invited me to do after dinner talks. That a dinner, so after dinner speeches, and then that's moved on to a

lot of conference and keynote addresses. The events that range from things that are very financial orientated, risk management compliance organizations who are looking to promote their own products, through to awards ceremonies which have nothing to do with the world of finance at all. So you know, sometimes I might host a dinner for a small group of people who are a vulture or venture capitalists and are looking

to do some businesses, some key individuals. Other times it can be a conference for upwards of five six hundred people at an event where somebody wants to focus on compliance and the things that can go wrong if you don't manage to risk appropriately. So you didn't have you Obviously, people were intrigued by your experience, says, by what you learned, and you've got a number of invited, as you said,

to speak. But in terms of rebuilding a life, you have to figure there's only so much of a window where people want to hear it before eventually the sort of infamy faded. And what did you think then, did you have some idea for like, okay, what is a career? What is a full second life? Possibly look like it's weird, So to be honest with you, I mean I do I do as many after dinners that the conference events right now as I did nineteen years ago when I

was released. So it's um, you know, and I suppose things like recently the celebrity Big Brother program that I was on in the UK kind of introduce you to a younger generation. I mean, so I traveled the world talking at events. So the mainstay for the last nineteen years since I was released from prison has been after dinner talking talking at conferences, and I probably do somewhere

between thirty and thirty five of those a year. Has anyone from Bearings, people whose careers and jobs were lost because the banks collapsed, people who lost a fortune, do they ever express resent that you have had built this career getting paid to speak on these subjects, getting flown around the world, going on TV, becoming a sort of mini celebrity, which is in a way arguably at their expense. The only st answer is known. I've come across many

people who worked with Bearings during that time. I think the thing and you find this with a lot of speakers as well, as you go around the world and you listen to them. If you tell lies, you get things through. So I don't tell any lies. I told enough of them years ago when I worked at the bank. I fully accept that. So there's it's very honest and candid that it doesn't paint me in a very good light. So you know, I've met Peter Norris's the c IO

of Bearings at the time. I've met many of the people who worked on the accet Liability Committee, several of the main board members that were at Bearings, and no, there's no resentment. You do get a bit of negativity and it tends to come from people of a certain age group who who work, you know, probably chartered accountants and think that I, you know, sort to undermine the

banking system in the UK. And it's just a you know, it's a story of errors and compounding those errors with some really stupid decisions during that period which ultimately led to the class of the bank. It's you know, it was frauled my partner. It was definitely criminal and I was rightly punished for that. And you know, the punished and is not just the sentence. You know, I developed cancer whilst I was in prison, I was divorced by my wife, and I've had to rebuild my life after that.

All of that is part of the punishment. And I accept that everybody is entitled to their opinion, but so am I, and you know I don't. I don't walk around with my head bowed when you're when you're released from posit prison as I was in, you have a choice. You can you can hide away, or you can confront what you did, try to understand it and then move

forward from that point. But if you if you really, if you don't take yourself apart and really rip away all the veneer and really look at yourself and understand that you didn't like yourself and what you did and how you've reacted in certain situations, that it's impossible to build yourself back up. You know, you have to go through that process. So when you look at some of these other roads trading episodes that exists around the world.

You know Jerome Curvy a being one, and he still blames the bank quick to add a boy still has lots of issues that he's campaigning against. But they did wrong that the libel rates fixed. You know, people who work in banks, as I've mentioned already, are are amongst the most intelligent people in the world, and they know

when they're doing something wrong. So when a lawyer stands up and tries to convince the court that there was a pressure to perform and they there's lots of other mitigating factors, that's rubbish because these people know what they're doing they know they shouldn't be doing it, me included, and for that reason, they need to be punished. And if you don't punish people, you don't have deterrent, and you know that what needs to happen. So I think we do want to focus on, you know, how you

rebuild your life, um and your career. But since you you up Jerome Curville and quickly at a bully at ubs, and I'm just curious to get your take on this, like, do you think there is a common thread that runs through all these different modern rogue traders or is each rogue trader scandal different in some way which I would suggest that you know, for big financial institutions, there's actually no one like silver bullet way of protecting themselves. I think you hit the nail on the head there. I

don't think there is a silver bullet. I think you can you can look up and people have done this over the years. People have tried to look at personality types and behavioral analytics and how people are behavior and I think there's you know, there's very clear differences I think between myself Curvial at a bully. There was there was a guy the Gucci at di wo in New York who was exposed around the same time as me as well, so they've been during that period. There were

there were quite a large number. I think eventually the industry, rather than trying to work out who potentially is going to be then X road trader. It's about making sure your controls and your systems are as robust and effective as they possibly can be, and then you expose people far sooner, which I believe is what happens within the world of banking these days. There are still people who post road trade, not on a daily basis, but it happens, and people are just exposed a lot sooner and the

net effect of their actions is very, very limited. You know, I think the day of these big excessive road trading episode is a long way behind us because the industry has changed. Compliance and mismanagement is better than it's ever been, so I don't think there is a silver bullet. It is about just making sure that you control as good as they possibly can be, that you freshen them up. You're not doing the same thing today that you were two years ago, because if you are, you can guarantee

that somebody's circumventing those rules already. So it's about being proactive and making sure that you're as good as you possibly can be, and that's what everybody aspires to be. It's just, you know, when you're looking at compliance and risk management roles around the globe, not necessarily in any particular location. You know, people don't like asking the difficult questions.

They don't like rocking the boat. They're getting paid a big salary for for for not doing a great deal, and maybe that's an incorrect characterization, but they don't want

to rock the boat. You know, people need to ask the difficult questions if you think, if you see something's going wrong or you're worried about something, you need a voice that's being heard, and banking over the years haven't and I'm not talking about the US or any particular location, but so in the UK, banking hasn't encouraged that people who are a little bit dissonant or disruptive and you have a voice, you know, talking about your speeches that

you gave and the lessons that you've learned. There are a couple other episodes in your recent career that are interesting, including for several years you were the head of a a soccer team or a football club Galway United. How did that happen? How did you become the head of a football team? Well, I mean it's a small The football teams in Ireland are quite small, to be honest with you. So the now I live in Galway and my wife said I was getting in a way at home,

wanted me to go and do something. And but that's that's the genuine story. So I've been here for about fifteen years since I've remarried, and you know, there's a lot of big American buyers pharmacy companies around here, from Shannon down to Galway, and but they're not things that you know, that that I would be able to turn my hand to. So apart from working in financial market, the only other real interest that I've had is football.

So when somebody asked me to get involved with the football club, I did, and you know it was a bit of fundraising at first, and then I moved on to become the chief executives of the football club and then resigned from there in two thousand and ten. And like I say, I mean, the mainstay over the last fifteen to nineteen years has been the after dinner speaking.

I'm involved in an online trading education business at the moment, which has been going for three or four years, there's lots of people doesn't really apply to to American citizens, but lots of young people getting involved in spread betting and CfDS and losing a lot of money because they don't they don't really have any experience of the market there.

They're lurid in with some quite misleading advertising. So you know, my name signifies more than anything else that this can be really dangerous and you can releast a lot of money. So I mean that makes sense in the context of

an online trading education system. But you were also on the most recent season of Celebrity Big Brother in the UK, and I'm just wondering how that came about, because if you forgive me, you know, when I think about celebrities, I don't necessarily think about a rogue trader from the nineteen nineties. So what was the approach that they made to you, and what do you think you brought to

that show? Can I just before you can I just intervene here real quickly, because I don't think many people probably do think of a former rug trader is just celebrity. But my impression of UK media culture is that there is a very large, enduring interest in just to be blunt reality shows about what we would call c and dealist celebrities and so people that aren't exactly the biggest names. I get the impression state side that the media in the UK is much more into oh do you remember

this name from the past, while here he is. So anyway, you can answer Tracy's question, but in a way I didn't find I didn't find it that surprising of a of a choice. How dare you call kirstially a dealist celebrity job lovely? I won't have a bad word said about her. She you know, she was lovely throughout my experience in the house. I think there's two things. I think you're right. I think there's a lot of the

reality programs that we have in the UK. I think you can even go lower than be and probably get down to day, but they have things as well. So for the thief that this year was was for people that were caught in the eye of a storm, a media storm, which obviously applied to me. And I think if you look through I think there were thirteen people that went into the house at the beginning and I think mine was probably the biggest media storm at the time.

I mean, as you characterize at the beginning, it took over the world's media for a period of time. So look, for me, it was it was a bit of a challenge for me. I It's twenty years since I've had cancer, so you know, I was given a chance of living for five years. So I you know, it's a bit of a milestone for me. And it was one way of marking that. They obviously pay you quite well for your time on the program, so I'm not going to not going to deny that part either. But the response

has been a extremely positive and it's been good. And I you know, I as you as you mentioned at the beginning, I came forth. So Kirsty was one of the people that beat me. Um. So yeah, look it was I think it was a worthwhile experience. Okay, So Nick, here's a question for you. Um. You know, you had the Rogue Trade, which clearly um erupted into a media storm as you put it, and ended in a jail sentence.

But after that you were able to rebuild your career. Um. You were, you know, a motivational speaker, you were the head of Galway United and you were on celebrity Um, big brother. Do you think you're happier without with that career outcome versus what would have happened if you had been at Bearings without the rogue trading scandal, If you had just been a successful trader at Bearings, which would

you have aft? I would definitely have preferred to be the successful trader of Bearings, There's no doubt about that. But you know, you have to look back on like life has lots of different twists and turns, and you're you're the sum of all your experiences. I don't have to look away when I look at people. That period of my life will always be the most embarrassing period of my life. There's absolutely no doubt about that. But

I've dealt with it. I've faced it, um, so I don't I can look people in the eye and move forward. I'm going to use the phrase to say that be proud of myself, but that's not exactly right. I'm comfortable and self confident in who I've become, but I'm not. I'm certainly not proud of what happened during that period between n because it's the complete opposite of what I

wanted to achieve. So the answer to your question is, all things being equal, I would have preferred to be the CEO of Bearings at this time, but you know that at this point, unfortunately that is just wishful thinking, because life, for lots of different reasons, primarily my own stupidity, took took a variety of different terms. Nick Lisa, there's been a fascinating conversation. Obviously, we've known your name for years in the news and really appreciate you coming on

your candor and perspectives. Thank you very much for joining out. Thank you, Thanks Nick. That was great, Tracy, I really thought there was an interesting conversation. Like I said at the end, you know Nick Lisa and is one of

those names I've just heard forever. In fact, I think I can remember being in middle school when I guess I was twelve years old and reading in the news or seeing something on TV about the collapse of this legendary multi century old bank Bearings and how it was brought down by a trader in Singapore, and so to actually hear the voice of that person and get their perspective I thought was incredibly fascinating. Right, Well, I will say I think you were a much more engaged twelve

year old than I probably was. But one of the things that struck me a lot is, you know, this notion that a twenty five year old trader basically brought down one of the oldest merchant banks from Britain at the time. And you know, as much as you want to lay the blame on a single person, the notion that any like year old could do that to a single entity kind of speaks volumes about the controls that

were also in place of that company. Absolutely, and as he as Nick pointed out, there have been multiple rogue trader incidents or in recent years, and they're almost certainly will be in the future because there's no silver bullet, but they haven't been on the scale that they've brought down an entire bank, And it seems kind of hard

to imagine. I mean, you know, knock on wood, but it's hard to imagine in this day and age, when they're so much more awareness of this and sort of surveillance of traders, internal controls, things like that, that that could happen. But you know, you are going back to the small sort of satellite branch way out in Singapore, different time zones than the people who were really running the bank, you know, much less ability to sort of

watch everything in real time. It's almost not surprising that that was eventually going to happen, right, But you're right in the sense that we we do have additional measures now that are aimed squarely at preventing this type of behavior. And that's actually from what I remember, I think that's how Quake coup At a bully, the ubs brogue trader

was initially found out. Was he went away on You know, a lot of traders nowadays have two weeks mandated holidays so that if they are cooking the books, those things can actually come to light, and I think that's how they found him. So clearly the industry is adapting to rogue traders and is installing new methods of um finding them out. But I guess the challenge is always um sort of adapting and making sure that the traders don't

become used to your detection. Yeah, absolutely, I think. Also, I just there are a number of people in the sort of Nick Leason model of career rehabilitation that we've seen, so you know, the Wolf of Wall Street guy wasn't a rogue trader, but he got in trouble and then

he sort of goes around and talks about stuff. But uh, without judging any of those other people, I did get the impression that Nick is sort of totally honest and upfront about what he did, and the fact that he doesn't like sort of like pat himself on the back for having you know, some great insights or blame other people, have felt like a sort of honest sincere reckoning and

assessment of his own career. Yeah, and I did think it was interesting that he said, you know, if he was given the ultimate choice between like his current comeback versus having been a legitimate trader um who rose through the ranks of bearings, that he would have chosen the ladder. That that kind of says a lot. Absolutely well. This has been another episode of the Odd Lots Podcast. I'm Joe Wisnthal. You've could follow me on Twitter at The

Stalwart and I'm Tracy Alloway. I'm on Twitter at Tracy Alloway. And you should follow Nick Leason on Twitter. He is at the Nick Leason And don't forget to follow our producer tofor Foreheads on Twitter. He's at Foreheads t as well. As the Bloomberg head of podcast Francesco Levi at Francesca Today. Thanks for listening.