Published: Tuesday 24th February 2015 by The News Editor
Rogue trader Nick Leeson has claimed authorities in Britain and Ireland do not have the appetite to prosecute bankers.
Twenty years since his spectacularly fraudulent punts broke Barings, one of the City’s oldest merchant banks, the former derivatives broker hit out at apathy he sees among criminal justice chiefs and politicians.
“The problem is there needs to be an appetite to prosecute these people,” he said.
“There seems to be a severe lack of appetite when you look at the UK and Ireland and you have to ask yourself why?
“Financial markets are a huge part of a country’s GDP, they provide a lot of donations to the ruling parties in both those countries and there just seems to be a lack of appetite to prosecute and punish accordingly.”
Leeson’s staggering fraud from the Singapore trading floor still resonates two decades later, albeit the £862 million losses he racked up are dwarfed by the multibillion bailouts of UK and Irish banks and fines of 166 billion US dollars dished out to banks for corrupt or illegal practices in recent years.
But the plasterer’s son from Watford remains a symbol of rogue banking.
Leeson appeared incredulous at the lack of white collar convictions for corrupt banking and more so at the apparently pervasive attitudes in financial circles.
“There’s been some startling things that have happened over the last number of years and when you sort of add them together it kind of looks as if they (the banks) exist above the law,” he said.
“166 billion US dollars in fines in six years is astronomical sort of money. If you can weather that sort of fine, number one, and it doesn’t impact your bottom line and there’s no reputational damage – what stops you carrying on and working forward to the next disaster that’s around the corner because there’s no real consequence to your actions.”
Leeson, who this week turns 48, has been jailed, divorced, beaten colon cancer, run Galway United Football Club and carved a lucrative career on the after dinner circuit and as a debt management consultant in the years since Barings collapsed on February 26 1995.
The venerable investment house counted the Queen on its client list and is mentioned in history books as the institution that financed the sale of the state of Louisiana from France.
Ultimately it was sold for £1 and Leeson’s reckless trades were depicted in a Hollywood film starring Ewan McGregor.
Now remarried, Leeson’s turnaround is evidenced by the comfortable, suburban life he has built with his second wife Leona in Galway.
Even that took an unusual twist last week when he used the Barings’ anniversary as an opportunity to explain to his 10-year-old son Mackensey why his father will be in the news again.
Monday marked the 20th anniversary since he fled the “police state” of Singapore, as he puts it, with his first wife Lisa and hid in a Malaysian hotel.
A fax had been sent to his London bosses claiming he was sick and wanted to resign.
Three days later he was preparing to hand himself in and Barings was bust.
Leeson went on to serve four and a half years in a Singapore prison for fraud and illegal trading, suffering the indignity of divorce while behind bars before being released early to battle colon cancer.
On his release there was the international publicity, and the debt.
Leeson was pursued by creditors for a number of years before being allowed to build a life in Ireland, starting with a sales job at Galway Utd, where he rose to be chief executive before departing in 2011 when the financial crisis left the club unable to pay players.
He rejects any suggestion that his time at the football club was a microcosm of his exuberance on the trading floors.
Leeson’s life has enjoyed a remarkable turnaround, on the face of it for the better, but he does not see a similar trajectory in the world of banking.
“It’s all about money,” he said, predictably enough.
“But wherever it is, in society, we have rules and laws and they’re enforced. The problem with the world of banking for me at the moment is there isn’t adequate deterrent and meaningful punishment and if you have a lack of the two there’ll be bedlam, people will do what they want.”
Leeson pointed to the recent HSBC tax scandal, the Libor interest rate manipulation controversy and issues over fixed rates on foreign exchange desks, bailouts and the demise of Lehmann’s, Northern Rock and Anglo Irish Bank.
“People and culture are very much in my opinion – and there are analogies you can bring to what happened in Barings – it’s dictated by what you see and what you hear,” he said.
“If you see people going unpunished it’s not such a big step for you to do something similar. That’s the real problem but it’s almost as if you have to rip up the rule book and start again but you’re not going to be able to do that.”
Nowadays, Leeson speaks passionately about the impact of personal debt on society but stops short of seeing himself as a self-help guru or pop-psychologist.
He remarked at the alarmingly high suicide rate in Ireland, particularly among young men and warned that in his opinion it is about people not being able to communicate.
“I wouldn’t have described myself as a particular strong person. I was quite introverted. I know sometimes in the media I’m portrayed in quite a different way that couldn’t be more inaccurate really,” he said.
“Being thrust into a situation, albeit self-made, I certainly didn’t know how to cope with it… you realise you have to change your behaviour patterns and the way you think about things and ultimately that makes you, I don’t know if that makes you a stronger person but it makes you better equipped to deal with the things that you have to face.”
Published: Tuesday 24th February 2015 by The News Editor