Monday 20 November 2017

Notoriety awaits UBS rogue trader

John Fahey

If previous rogue traders are anything to go by, notoriety and possibly even a Hollywood film await the person behind the £1.3 billion UBS fallout.

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

A Watford schoolboy-turned-City whizzkid, 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 (SIMEX) and was making millions for Barings by betting on the future direction of the Nikkei Index, his website says.

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 eventually wrote a book about his experiences which became a Hollywood film starring Ewan McGregor and Anna Friel.

Last year, Societe Generale trader Jerome Kerviel was convicted of being responsible for losing the bank around 4.9 billion euros (£3.7 billion).

Kerviel also landed a book deal and, in Trapped In A Spiral: Memoirs Of A Trader, said he believed the bank was happy with his work.

At trial, he claimed the bank knew about the risk-taking.

The bank, in turn, said Kerviel, 34, made bets of up to 50 billion euros (£43 billion) - more than SocGen's total market value - on futures contracts on three European equity indices, and that he falsified offsetting transactions to mask the size of his bets.

Kerviel, who was born in Brittany, 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, bolstering his cult status, read: "Jerome Kerviel, 4,900,000,000 euros. Respect."

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business