Chapters
Shownotes Transcript
Miss Levine. Mr Ford. So it's me again in the hot seat. It's my turn. My mum is going to be so excited about this story. Your mum? She was not a fan of Nick Leeson. It turns out no one was. Spoiler. But why your mum in particular? She didn't really like bankers. OK. Now I'm intrigued about Mrs Ford's illicit activities. Well, let's start and I'll explain later. I am all ears. East Malaysia. Friday the 24th of February 1995. What?
Nick Leeson steps into a dinghy with a group of other tourists. He's on the banks of the Padas River in Borneo, surrounded by lush green vegetation. He and his wife Lisa are whitewater rafting. It's his 28th birthday, but Nick feels much older.
Some days, when he looks in the mirror, he can hardly recognise the pale, bloated face that stares back. Tell me about it. Oh, come on. I would say a lot of things about you. You don't look like Nick Leeson. Thank you. That's so kind. He helps Lisa adjust her life jacket. He fixes his own. His chest feels tight, a reminder of his growing anxiety. The guide asks if anyone feels brave enough to steer. Leeson raises a hand.
He heads to the front of the inflatable to take charge. Yeah, definitely let the guy that's feeling really anxious do it. He runs his hands through his thinning hair, glances back at the other tourists climbing on board. When everyone's settled, he sets off. He breathes in the fresh river air. For the next hour, all he has to do is concentrate on steering the dinghy. The guide shouts over to him. Watch out for rapid number one. It's called the headhunter. If you're not careful, you'll see why.
Abort. It sounds too treacherous already. I'm out. If it's called the headhunter... No, I'm not having it. Unless they're offering you a job, I don't want to know. He's only half listening to the guide. The truth is, he's not on holiday. He's on the run from the police. He's a wanted man. He grips the oar and paddles the boat forward. He watches the green forest glide by. It's so calm and peaceful. He stops for a moment to take it in, trails his hand in the smooth water, then glances at Lisa...
Her blonde hair is stuck to her face with the light spray from the river. She smiles. He paddles forward. He puts everything he's got into powering the boat up the river. But moments later, they hit the rapid. The spray covers his glasses and for a second he's blinded. He can feel the dinghy bounce unsteadily on the foam and water. He's lost control. Suddenly, someone shouts, hold on! But seconds later, the raft has buckled and he's thrown in.
For the next few seconds he struggles in the current. Bubbles escape from his mouth as he tries to get his bearings. But then he relaxes. He sinks further down into the water. For the first time in years, he actually feels calm. If he drowns now, all his troubles are over. He lets the current carry him underwater. It would be an easy way to get out of the mess he's in. He wouldn't have to face up to anyone or explain what he's done. He sinks down further, feels the pressure on his lungs.
Suddenly, he breaks to the surface. He gulps the air. Bright stars explode in front of his eyes. He hears shouts, sees the dinghy and swims towards it. He grabs onto the side. Hands are on him, pulling him in. He sees the relief on Lisa's face. "Oh, I thought you were a goner." He wipes the water from his eyes. So did he. He's exhausted. And not just from the effort of getting to the boat.
He knows he should hand himself in to the police. But he's not ready. He just wants to stay with Lisa for as long as he can. He hasn't even told her what he's done. He's made his decision. He's going to take the risk. He's going to keep running.
My dad works in B2B marketing. He came by my school for career day and said he was a big ROAS man. Then he told everyone how much he loved calculating his return on ad spend. My friend's still laughing me to this day. Not everyone gets B2B, but with LinkedIn, you'll be able to reach people who do. Get $100 credit on your next ad campaign. Go to linkedin.com slash results to claim your credit. That's linkedin.com slash results. Terms and conditions apply. LinkedIn.com slash results.
LinkedIn, the place to be, to be. As summer winds down, let your imagination soar by listening on Audible. Whether you listen to stories, motivation, expert advice, any genre you love, you can be inspired to imagine new worlds, new possibilities, new ways of thinking. With Audible, there's more to imagine when you listen.
And speaking of listening, you can listen to the best-selling science fiction thriller Project Hail Mary by Andy Weir right now on the Audible app and traverse the galaxy in a desperate last-chance mission along with astronaut Ryland Grace, all from the comfort of your living room.
As an Audible member, you choose one title a month to keep from their entire catalogue. New members can try Audible free for 30 days. Visit audible.com slash WonderyPod or text WonderyPod to 500-500. That's audible.com slash WonderyPod or text WonderyPod to 500-500. From Wondery, I'm Alice Levine. And I'm Matt Ford. And this is British Scandal.
The show where we bring you the murkiest stories that ever happened on these odd little aisles. British scandals come in many shapes and sizes. Some are about money, some are about sex. They're all about power. But when we look at scandals a little bit closer, they turn out to be stranger, wilder and just plain weirder than we remember. So we're journeying back to ask who's to blame for what happened. And when the dust settled, did anything really change? MUSIC
Alice, when you think of 90s bankers, as I'm sure you often do, what immediately springs to mind? Okay, I like this. Yuppies, shoulder pads and people with mobile phones the size of bricks. Yes, I'd also add a whole load of new financial products that no one understood, particularly the people selling them. I'll be honest, that's quite far down my list. Yeah, also on your list should be cocky men swaggering through airports with their baseball caps on backwards.
It's very specific. Are you talking about somebody in particular? I am talking about someone in particular, and it's the man that we focus on. This is a story about one of those traders, a man who brought down Britain's oldest bank, the Queen's Bank. Nick Leeson shook the establishment and the financial world, and it could so easily happen again.
Let's go back a bit. It's August 13th, 1990, five years before Nick Leeson went whitewater rafting. He's in Jakarta, Indonesia. He's making his way down a steep staircase to the vaults of a bank. It's the first day of his new job here and he's determined to make a good impression. He's been told Baring's Bank is owed £100 million. They've sold shares but not collected the cash, so he's here in Jakarta to sort it out.
Sort it out sounds like he's owed a tenner by a geezer down the pub, not 100 mil. Sort it out, Nick. He's been at the bank for just under a year now. He's excited about coming to Indonesia. He's going to show Bearings Bank what he's made of.
His mother drilled it into him that persistence always pays off. When she was dying, he'd promised he'd work hard, stick with it and never admit defeat. But Leeson's already disappointed with Baring's operation in Jakarta. I know this is dark, but when people make promises to dying people in their sickbed, I just feel like stuff always goes wrong. It's like, don't be specific, just be like, I'll try and...
Yeah. I'll be alright. Just say I'll be alright. And also, if you're the dying person, say, don't make any promises. Yeah, don't worry about that. Just do what you want. Do what you want.
In London, he'd read brochures boasting about their success with the newly emerging Tiger Economies. The man who'd set up the operation here, Christopher Heath, is famous for being Britain's highest paid employee. He was on at least £3 million. I mean, I'm guessing he's on £3 million a year. Or £3 million a trade. I mean, you'd just be trading all day, wouldn't you? You wouldn't stop. You'd be red raw. Leeson wants to become a trader like Heath. He needs to prove himself first. Jakarta should be the place to do that.
A security guard opens the iron grid door and lets him into a small room. It's like a dungeon, dark and airless. The guard flips a switch and a single bulb lights the room. Leeson peers round.
He can't believe what he's seeing. Is it like that cartoon where there are just mounds of coins to swim in? Is it DuckTales? You know what I never understood about that was, if you jumped off a diving board into a pit of coins... You'd smash your skull. You'd die, absolutely. You'd die, for sure. You certainly wouldn't submerge and then come up like a dolphin. It's almost like it's not a documentary. You know what, every day of my life, I'm slowly coming to terms with the fact that DuckTales lied to me. Ducks can't even speak.
Piles of share certificates lie stacked on the floor. None are in any kind of order. It's going to take him months to sort through this lot. It's total chaos. Jakarta is a world away from the sleek brochure image he's bought into. He's been cheated. It would serve the bank right if he got on the first plane home. But that would mean quitting. And he promised his mother he would never do that. So he rolls up his sleeves and gets stuck in.
Jakarta, September 20th, 1990. It's 10.30 in the morning. Nick Leeson walks up a busy street on the edge of Jakarta's financial district. He's on his way to a bank for a payment. He needs to collect as much of the £100 million owed to bearings as possible. Small notes and pound coins, please. Yeah, I've got it in five Ps. The heat is killing him, and so is the kit bag on his back.
It's heavy, full of share certificates from the vaults. They're like blank cheques. Anyone can cash them. If someone mugged him, they'd make off with millions. Before he left London, bearings had warned him how dangerous Jakarta was. At first, they insisted on sending a car to pick him up from his hotel room and drop him off at the bank. But he doesn't feel threatened here. At night, he's been wandering through the streets, drinking in local bars. He's found people to play Winner Stays On on the pool table.
Sometimes he's there till three in the morning, battling it out with the locals. He likes it. It's no more threatening than Watford. He's had some bad nights back home, got into some fights. OK, I just think I deserve an award for not making a joke about Watford, because that's what you're baiting me to do, and I won't. No, Watford is the Jakarta of the South East. His nights playing pool are precious. He needs them to take his mind off work. Even after four weeks sifting through all the mountain of contracts, he's hardly dented the first pile.
He steps into the bank. For a second, he's grateful for the air con. He's led to the manager's office. Well, the manager is all smiles. He knows why Leeson's here and he doesn't want to pay up. The market has fallen since his bank bought the shares. He doesn't want to hand over good money for something that's now nearly worthless. Leeson's heard all the excuses in the book.
You bought them, you need to pay. The manager tries another tactic. The share certificates are tatty and they're undocumented. Again, all true. Leeson can't let these irritating truths get in the way of his job. He looks the manager in the eye. If you don't pay, it's fraud. It's a gamble. If the manager calls his bluff, he'll leave with nothing. They stare at each other for a second. Then the manager backs down and pays.
That would not go that way for me. How would it go with you? They'd be like, no, you're still not having it. And I'd be like, yeah. Well, watch out because you're getting a very strongly worded letter in three to five working days. Oh, we're scared. Security, Levine's back in. He makes his way back down to the vault. Today was a small victory, but he needs a lot more of them to claw this money back. And there are piles of share certificates still waiting to be sorted before he hits the streets again tomorrow.
Then he notices the vault door is open. Someone's in there. It's a young blonde woman. She's staring at the piles of share certificates. What the hell are we meant to do with these? Build a bonfire? Her name is Lisa Sims. She's from Kent. Bearings have sent her to help him. And she's here for the next seven months. Hi, I'm Nick. Okay, Nick, where do we start? Snogging? In the vault. Naughty. Is that a share certificate in your pocket or are you just pleased to see me?
London, March 11th, 1992. It's just gone four o'clock and Nick Leeson needs to finish work early so he can meet Lisa. They're due to be married in 10 days time. He still can't believe his luck. She's handed in her notice with work and is concentrating on the wedding. He's just booked the Orient Express to Venice for their honeymoon. He can't wait to see her face when he tells her.
He's just about to leave when he gets a call. Nick, it's Tony Dickle here. Dickle is Baring's Securities Development Officer. Poor Tony Dickle at school. Honestly, I feel for him. An 11-year-old Dickle. It's such a tough life being a kid. Leeson holds his breath. He knows this call is big news one way or the other. For the past few months, he's been trying to get a post in Singapore, but his chances are slim.
His work for the bank is good, but he really wants to be a trader and he still doesn't have his trading licence. He'd applied to the City of London for a licence, but he lied on the form. He has an outstanding county court judgement for an overdraft debt of £639 with NatWest. He spent the money on nights out trying to keep up with well-paid traders. He'd taken a gamble that NatWest would write the debt off.
But they didn't write it off. Instead, they went to court. He's expecting Dickle to tell him his dreams of being a trader are over. Okay, so early signs that perhaps he's not the most trustworthy character. Yeah, or grounded in reality. Like, who ever heard of them just saying, yeah, don't give us your overdraft date? I've literally never heard of that.
Got some good news, Nick. We've got you recognised as a registered rep in Singapore. We want you to run the Symex operation. Symex being? Ah yes, the Singapore International Monetary Exchange. One of my favourite exchanges. Leeson can't believe his luck. He's not exactly a trader yet, but he's on his way. Yes, yes, that's great. Done. You're the new general manager. This guy, this guy's luck. As soon as the call is over, he jumps in a cab and makes his way across London to tell Leeson.
It's the best wedding present he could imagine. He's going to make a fortune. And pay off that £639, I hope. Hey, I'm Ryan Reynolds. At Mint Mobile, we like to do the opposite of what Big Wireless does. They charge you a lot, we charge you a little. So naturally, when they announced they'd be raising their prices due to inflation, we decided to deflate our prices due to not hating you.
That's right. We're cutting the price of Mint Unlimited from $30 a month to just $15 a month. Give it a try at mintmobile.com slash switch. $45 upfront for three months plus taxes and fees. Promote it for new customers for a limited time. Unlimited more than 40 gigabytes per month. Slows. Full terms at mintmobile.com. Want to teach your kids financial literacy, but not sure where to start? Greenlight can help.
With Greenlight, parents can keep an eye on kids' spending and saving, while kids and teens use a card of their own to build money confidence. As a parent, you can send instant money transfers, set up chores, automate allowance, and more. It's a convenient way to run your household, customized to your family's needs, and the easy way to raise financially smart kids. Get started with Greenlight today and get your first month free at greenlight.com slash wondery. Singapore, 30th of March, 1992.
It's 8.30 on Monday morning and Simon Jones is at his desk. He has the look of a man who is irritated with life. I'm going to get on with Simon. He's kind of the Alice Levine of 1992. He's the operations manager for South Asia and he's especially annoyed this morning because Nick Leeson has turned up early. Oh my God, it's like you. He's not due in for another hour and Jones hasn't even had his first coffee yet. You're on average 40 minutes early. I mean, we talk about this every series, but it's galling. But it's just in case.
Jones lets his frown deepen. He really is like you. He looks over at Leeson. He has to formally welcome him to Singapore on behalf of the bank, but he wants him to know that this is his territory. The problem is, he doesn't really understand what Leeson's job is.
His expertise is Baring's securities. Baring's futures is another world. It's a mystery to him. OK, so this is probably a good time to admit I don't know what futures are either. I wouldn't worry. Right now, neither do any of the senior managers at Baring's bank. OK, great. Back in Singapore, Simon Jones looks Leeson up and down. Truth is, he doesn't really care what Leeson's job is. There are at least three other managers in Baring's who Leeson will report to.
And he knows that Leeson doesn't have his own trading license, which means he'll take his day-to-day orders from Tokyo. The main trader there is an American called Fernando Gweller. He'll keep Leeson straight. All Jones needs to do is get Leeson to report back any problems. You'll be filling in orders for Fernando. Just follow his instructions. Jones' main concern right now is that he doesn't have to spend too much of his budget on Leeson and his futures operation.
He tells him his first job is to recruit local traders. He'll have to train them himself. Don't go overboard on the pay. £4,000 a year max. As their annual income? Does seem a bit low, doesn't it? Even by 90s standards. Somebody else was getting £3 million a day earlier. Yeah, but he was really good. OK, fine. Oh, it's a meritocracy. Cool. He sits back and waits for Leeson to negotiate up. The going rate for new starters is £1,000 more.
There you go. See, it's five grand a year. I just thought people that were in banking were on six-figure salaries from the get-go. Who knew that it was a vocation for such a pittance? They would do it voluntarily. Leeson's face is a mask. OK, I can make that work. For a big hitter, Leeson's coming across as a bit of a pushover. Sir Jones tries his luck again. You'll also be running the back office, sorting the settlements.
It's two jobs for the same pay, and it'll mean long hours, from half seven in the morning to half ten at night. Of course, it's not good practice. It means Leeson will be left to monitor himself. But everyone says Leeson's solid. If senior management trust him, that's good enough for him. Oh, God. Think you can handle it? I don't mind hard work. Jones is delighted. Leeson's going to be easier to control than he thought. The money he's just saved on his budget will bump up his end-of-year bonus.
And with Leeson in charge, he doesn't have to run something he doesn't understand. It's all Leeson's problem now. Welcome on board. This is the bit in the story where it's like, no, stop, stop. Guys, can you hear? I'm like knocking on the glass. Get somebody to check his work. What could possibly go wrong? Singapore, May the 14th, 1992. It's 7.55 a.m.
Leeson's in his booth at Symex. He looks out over the football pitch-sized trading floor. It's lit like a casino and marks out like some old world map. He chats to Fernando Guellar on the phone. They exchange news about the market and what they got up to the night before.
Suddenly, the trading bell rings and Fernando spits out an order in his fast California accent. Leeson has seconds to make a profit. He looks for his team in their navy and gold bearing striped jackets. He yells over the noise of the other traders. The floor erupts into a scrum of different coloured jackets. Torn up tickets already litter the floor. So exciting. Those old trading floors...
I don't think they really exist anymore. It's absurd that the global economy was run by a load of shouting blokes in silly jackets. Funny that you're saying that in the past tense. I would describe that as the world now. You know what? We should have got rid of the silly blokes. All we did was get rid of the silly jackets. Wow, that's so profound. All means nothing. I think the latter. Nick spent the past few months recruiting and training staff, but they're still too slow.
He's frustrated, but he gets it. He's had to learn fast himself. The hand signals for trading, how to handle 12 calls at once, how to be heard above everyone else. The floor of the trading pit. The pressure is crazy, like nothing he's experienced before. And he loves it. He signals frantically over to George Sioux, one of his traders. He holds his hands high up like a bookie at a racecourse. Sioux signals back. Leeson reports back to Fernando.
580 here. There's a seller out there and he wants to deal in size. Shall I low-tick him? This is absolute comedy, Goop. Yeah, squeeze him for 200. Buy them. Now. Leeson signals the price to Sue. He moves two fingers to the side of his body to signal the quantity, 200. He has his palm facing towards him to indicate a buy. Sue spins round with his arms spread-eagled, shouts into the pit. A dozen red jackets of rival traders swamp him.
Okay, Fernando. Bought 200 at 590. Leeson watches the screen. Yes! He's just made 16 grand in seconds. Shut up. That's like three people's annual pay in this world. Christ. A few minutes later, he makes another 10.
He's on a roll. He buys another 3,600 contracts before the other banks notice what he's done. He rings his clients. "We bought 4,000, average price 370." His client is delighted. He puts the phone down. That's $8,000 commission coming their way.
Fernando's pleased too. You know, in China, eight is a lucky number. Leeson grins to himself. $8,000 is always lucky, Fernando. Smooth. Unless you start with 10,000, in which case you've just lost 2,000. I gave you 10, Nick. It's not always, is it? At 2.15, Nick takes the lift down and walks 200 yards to the Baring's office. He knows he'll be here till midnight, working through the dealing slips to reconcile the trades.
He doesn't mind. He's happy. He's made some good money today. Seven hours later, he's about to leave when he gets a call from London. It's the manager of Behring's derivative settlements. Can you set up a new error account and keep them all in Singapore? We don't want to be bothered with all these tiny errors you're clocking up. No problem. Leeson asks his assistant, Rizelle, to set the account up. She asks what he wants to call it. Eight's a lucky number in China, right? Call it the 5/8 account.
Oh, I've got a bad feeling about this. Yeah, he doesn't know that in China, one eight is considered lucky, but too many will bring bad luck. A few weeks later, the manager rings again. We've got a new computer system, so send all your errors back through to us. Leeson is about to agree.
But then the manager adds, By the way, why are there so many of them? Leeson tries to laugh it off. Just a few teething problems, nothing to worry about. Business is good. Glad to hear it, Nick. But keep an eye on it. The call's shaken him. He can't have head office thinking he's failed before he's even got going. So he makes himself a promise. Whatever mistakes he makes in future, London won't find out.
That's one way of dealing with it. Yeah, you could just stop making mistakes. I mean, I guess some people pick path A, some people are crooks. So, you know, each to their own. Imagine if you said that to Nick Leeson. Why didn't you just stop making mistakes? Oh, man. Why didn't I think of that? I thought I'd just keep making them and then cover them up. A few weeks later, he's in the pit. It's Monday morning. Business is slow but steady. He's on the phone with Fernando.
He tells him how he took Lisa on a surprise island-hopping trip at the weekend. Suddenly, Fernando stops him. Business has come in. 500. Lisan looks at the board. The price in Osaka and the price in Singapore is different, but only for a minute at most. Then it hits him. What if he buys and sells the same futures contracts on the two different exchanges? What if he exploits that difference? He'll need Fernando's help.
Fernando's sceptical, but agrees to give it a go. The next trade is 200. Leeson screams to his team, "Buy 200 at 580!" Then he shouts down the squawk box at Fernando, "Sell at 590!" "Done." He's just made £16,000 in two seconds. Then he makes another 10 grand, then 25.
Later on, Fernando tells him Baring's bank have a new name for his switching activities. They're calling it Leeson's Business. His reputation is soaring and so are the bank's profits. I wonder if they renamed it later. So at this moment in time, everything's legit. He's just smashing it. But something's up in the background if he's not being transparent. If he's saying he's going to keep these problems to himself. That's got me worried, Matt. I'm not going to lie, that's got me worried. You have excellent judgement. Singapore.
It's quarter past two on Friday the 17th of July 1992. Nick Leeson watches the clock. Finally, the bell rings to signal the end of trading. It's been another great day. His new team are coming together and they're making good money switching. Everyone files out of the pit. His team head off to the Hard Rock Cafe. Lovely. So naff, isn't it?
You're going to get all of the Hard Rock Cafe fans on you on Twitter. I mean, it's cool, but it's not as glamorous as you'd imagine for traders. Look, they do great burgers and chips. The cocktails are fantastic. He walks a short distance in the other direction to the office. He sits at his desk and starts sorting the trading slips. If he's lucky, he'll be done by six. Then he can join the others and start the weekend properly. But at eight o'clock, he's still there.
He's got a sale note for 20 contracts and there's no balancing purchase. What are you talking about? You're about to find out. He looks at the initials on the slip. KW. Kim Wong. Kim is his newest recruit. It's her first week. He tried to keep an eye on her. She was nervous. Once or twice, she'd been jostled by the other traders and hadn't been able to see him properly.
And she's made a mistake. She's sold rather than bought. She's just lost them £20,000. That is not a good day at work, is it? No, and it's exactly the problem you identified, is when you're in this pit of screaming people, of course mistakes are going to happen. A few minutes later, he takes the lift up to the 24th floor. He knocks on his boss, Simon Jones' door. He's packing up for the night and clearly doesn't want to be bothered.
Leeson explains about the loss. Jones frowns. Sack the cow. Okay, well that's one strategy. It's just a mistake. No, sack her. She'll never work on Symex again. It's a very sympathetic working environment, isn't it? Leeson gets in the lift to the ground floor. He's irritated. This is all Simon Jones' fault in the first place. If he'd given in the budget to higher experience traders, this wouldn't have happened.
He gets out of the lift and makes his way to the Hard Rock Cafe, who do great burgers, chips and cocktails. He's going to find Kim Wong and sack her. When he walks in, the party's in full swing. You cannot sack somebody at a party. That's ridiculous. Two or three of his team are already drunk and dancing on tables. Kim, can you get down, just for a sec? You're going to bang your head on the light fitting, but also you're sacked. Kim Wong rushes up to him. Her eyes are puffy from crying.
Nick, Nick, I'm so sorry about that trade. She starts to sob. He can't sack her in this state. She works hard, more so than a lot of his team. And she's underpaid. We all make mistakes. Go home and don't think about it. See you next week. He needs a drink. He doesn't want to think about work now. He'll sort it all out on Monday. On Monday morning, Kim Wong doesn't show up. She leaves him a message telling him she's quit. At least he won't have to sack her.
At 2.15, he heads to the office. He still has her ticket in his pocket, but he forgot to close the account on Friday. The market's been rising, and so have the losses. Kim Wong's £20,000 loss is now £60,000. Oh, God. His mistake has cost more than hers.
Can people please just check their paperwork? If only you'd worked there. What I would do is put a passive-aggressive sign on the fridge. Please, can we start forgetting to close the accounts? It's costing us £60,000. Singapore, Monday 8th March 1993, 7.35am.
Nick Leeson pays for an orange juice. He needs to get to work early, clear his head and figure out a strategy. He's been awake half the night trying to work out how to cover his mounting losses. If he writes it all down, he can see what he needs to do.
He can't do that at home. He doesn't want Lisa to ask questions. This is where it gets so murky. On the face of it, everything's going well. He's doing a brilliant job for Bearings. Last September, he passed his Cymex trading exam. He's now a trader in his own right. Nobody mentioned the county court judgment that stopped him getting his license in London. He figured if Bearings didn't bring it up, then why should he? Because of switching, everyone thinks he's a financial genius, including Lisa.
His salary's been bumped up to £52,000 a year. His bonus this year was £130,000. Lisa keeps telling him how proud she is of him. But the truth is hidden in the 5-8s account and he knows it. We called this. The losses from his mistake with Kim Wong are in there. He knows the managers won't see it in that account. But hiding it won't work forever. He needs to find a way to clear it completely. He heads into the building where his mate Danny falls into step.
Nick, you were bang on yesterday. Every morning, he and Danny have a £100 bet on where the market will close. I don't know how you do it. You're a bloody genius.
Danny peels off £100 from a roll in his pocket and hands it over. How many bets with Danny will he have to place to make back? This is like a maths GCSE question. Every morning, Danny and Nick have a £100 bet on the market closing. Well, this is the thing. Sometimes these £100 bets feel like the only real money he handles. The rest is just numbers.
He'll buy a load of chocolate Kinder Eggs later. Are you for real? Apparently, he liked to buy them because they gave him energy and then he threw the toys at traders who annoyed him. You are 100% making this up. That is outrageous. What a detail. The thing is, if someone threw a Kinder Egg toy at me, I'd be delighted. We're like, great, a teeny tiny terrapin. I needed one of them. Also, he's buying 100 quids worth of Kinder Eggs. I mean, not to overly talk about Kinder, but it's a great flavour, isn't it?
There is something about it. Like, no other chocolate tastes like that. It's so silky. You know what? The more I hear about Nick Leeson, the more I'm warming to him. This episode is sponsored by Kinder Eggs. It's too late now to work out a strategy. He'll have to wait till trading's finished. Who knows? Today he might get lucky and make enough to clear it all.
They take the chrome lift to the trading floor. Danny asks if he's heard about the new guy who's taking over, Peter Norris. He's going to tighten up on the losses. He's big on bookkeeping. We'll be all right, though. Leeson feels a wave of fear. If they start looking into his trades, they'll see what a fraud he is.
In December, he was toasted by bearings as a great success. He reported profit earnings to bearings of £10 million. But the truth is, he hasn't made a £10 million profit at all. He's made a £3 million loss. And now it's only a matter of time before he's caught. MUSIC
This season, Instacart has your back-to-school. As in, they've got your back-to-school lunch favorites, like snack packs and fresh fruit. And they've got your back-to-school supplies, like backpacks, binders, and pencils. And they've got your back when your kid casually tells you they have a huge school project due tomorrow.
Let's face it, we were all that kid. So first call your parents to say I'm sorry, and then download the Instacart app to get delivery in as fast as 30 minutes all school year long. Get a $0 delivery fee for your first three orders while supplies last. Minimum $10 per order. Additional terms apply. Singapore. It's Thursday the 11th of March 1993. 2.30 p.m.
Nick Leeson marches into the office toilets and bangs on the cubicle doors. That is not good etiquette. I'll be out when I'm out. He's looking for George Sue, one of his traders. The stench in the toilets is horrific. OK, this is too much now. That's guys for you. They're blocked with vomit. Oh, God! Last night was party night. When he came in this morning, some of the traders lay sprawled on couches in the traders' lounge, sleeping off hangovers.
But George Sew wasn't one of them. Sew is now one of his best traders, but he's become unreliable. Sometimes he's too hungover to work. Other times he's still drunk. Today, there's no sign of him anywhere. That means there's only one place he can be. The library? A few minutes later, Leeson strides over to Harry's bar. Sure enough, George Sew is in there, sitting alone in front of a row of empty Tiger beer bottles. A soggy cigarette between his fingers.
She's thrown me out. She means it this time. And he's such a catch. Leeson doesn't want to hear about his failed marriage. Go home and sort yourself out and don't be late tomorrow. The last thing he needs is this. He's still making up for Kim Wong's mistake and the audit is due soon. He hasn't got time for slackers. I think we need to stop referring to it as Kim Wong's mistake.
He's like, because Kim, she made that mistake and then £3 million. Yeah, Steve owes me a fiver, so we've all made losses. The next day, Sue turns up clean and tidy. Leeson breathes a sigh of relief. Now all he has to do is trade his way out. He needs to make up a £3 million deficit. This sounds realistic. Totally normal. Everyone takes up their positions. They wait in silence. Like the start of a race, suddenly the phones start ringing and the place erupts.
Leeson points at George. He gestures. Sell 100 contracts. George jumps in and does it. Three hours later, Leeson looks across at George. He's staring into space, miles away. That's it. Leeson grabs a cream cake, marches into the pit and shoves it in George Shue's face. But Shue ducks at the last minute and another trader gets it. For a brief moment, everybody stops and stares.
The junior trader wipes cream from his hair. A big lump of cake slides down his face. He looks mortified. Everyone starts to laugh. Everyone starts to laugh. They cracked up. A little cream cake in the face, the old motivation technique. I'd take it. I wouldn't have ducked either. I'd have just stood there and opened my mouth. Later that night, when Leeson goes through the slips in the back office, he stares open-mouthed.
Instead of selling 100 contracts, she was bought 100 instead. Please, people, did you read the sign on the fridge? This is driving me mad. We've got the hand gestures, we've got the thing we do with the hands by the thing. We've sorted this out. Yeah, you've literally done the total opposite. This makes me feel sick. Well, you're going to feel even sicker.
They're worth £8 million. I'm going to cry. I just don't know what to do now. He slams the paper down. Bonuses are due at the end of this month, but they won't be paid with this kind of loss. He's got to hide this and quick. No, don't hide it. Just go and say I'm sorry. If Simon Jones finds out, Leeson will never be trusted to run an operation again. And what will Lisa think? Lisa is the least of your worries right now, sweetheart.
He walks over to his assistant, Rizal's desk. I need to put another trade in the 5-8s account. Sure, how much? Oh, Rizal, my sweet little beauty. It genuinely makes my chest tight. It's a few days later and a year since Nick Leeson arrived in Singapore. The 15th of March, 1993. 6am. He steps into a hot bath. It's the only place he can think...
He needs to find a solution and fast. I know this isn't the point, but I find people who have baths in the morning a bit creepy. Yeah, because it makes you so tired. You have to lie on the bed for at least 10 minutes after a hot bath and hope that you're not going to pass out? If only there'd been another clue that he was a bad decision maker. I'm not saying this is the reason for the £11 million loss, but... You know Nick Leeson likes hot baths. Let me stop you there. In the morning, monster. Monster.
He puts his head under the water and lets the bubbles escape from his mouth. He's finished work at one o'clock this morning and his body aches. For the past few weeks, the market's been going against him. Switching isn't making him enough money. The 5/8 account is growing. Suddenly, his mind is clear. He knows exactly what he's got to do. The trouble is, it's risky. Can he think a bit longer and see if there's a non-risky plan in his head? An hour later, he's in the car making the five-minute journey to the office.
When trading starts, he snaps open a packet of sweets and starts chewing. He's totally focused. He's going to sell exactly the right amount of options to cover the loss sitting in the 5-8s account. I just want to make a prediction. This isn't going to go to plan. That's it. I'm just writing that down on this bit of paper, OK? So I said it, all right? I wonder if you're going to turn out to be right. And he's going to ask Bearings London to send him the money to fund it. It's not going to be easy.
Oh, cool. Very cool. Cool, cool, cool, cool, cool. Can you imagine? Hiya! Silly little thing. No, another zero and another zero. Yeah, just press send.
$750,000. It's for payment to Symex. $350,000 for our clients, $400,000 for bearings.
There's a pause. Brenda? You still there? Yes, no problem, Nick. Just send a fax. He works out it'll take Brenda two days to realise the clients don't exist. He waits for her to call, accusing him of fraud. The call doesn't come.
Oh, Nick, you don't have to sell your body. So, straddles is another piece of banking jargon. Straddles are a bet that the market is going to stay in a narrow range. OK, that is good because I don't think the demand for actual straddles from Nick is that high. LAUGHTER
The next day, he gets into work early. He calculates how many options he needs to sell. Then he works it out as a straddle of 50 contracts. In all honesty, I don't actually understand, but what I understand is that it's risky. Yes, that's all you need to know. He chooses a level in the market at 18,000. If it stays at this level, he'll make money. If it moves away, he's in trouble. He watches the screen.
The market is stable. He cashes in on the premium. He carries on like this for days. By the end of the second week, the market still hasn't moved and he's cashed in. By the third week, he's transformed the £6 million loss hidden in the 5-8s account into a healthy profit. What? This is not the way I thought it was going to go. This is great. OK, so then he retires and then he's fine and everything's good. Well, he's done it for now. He's turned everything around. His mother would be proud of him and so will Lisa.
If he can bring himself to tell her the truth. Yeah, he'll tell her the truth. She'll understand. It's a stressful job. His mum would be proud of him. He's done the right thing in the end. And it's the end of the series. Thank you so much for joining us, everybody. Thank you. Good night. Can I just add a bit? Why are you talking again? There's more to come, mate. Singapore. Sunday, July the 20th, 1993. Nick Leeson opens a beer and stands on the balcony of his luxury Singapore apartment.
He's been working round the clock for the past two weeks and he's hardly seen Lisa. He wishes they could be alone right now. He wants to tell her things will change. No more mad working hours, not now the nightmare of the 5/8 account is over. But their flat is full of people. Lisa organised a barbecue for their friends. He's been so wrapped up in himself, he'd forgotten all about it. There's something else he feels really guilty about too. Since they got to Singapore, they've been trying to start a family.
All that's going to change. She's his focus now. Plus, he's going to use his bonus to buy a flat in London. He's going to invest in their future. He watches Lisa hand out beers from a big ice bucket. She heads over, looks at him curiously. You look happy. He tells her he's had a tough time at work. He lost money, but traded it back. Everything came good in the end. It's all fine.
She looks worried. How much money? For a second, he wants to blurt out the truth and tell her all about the £6 million loss he'd hidden away in the 5-8s account. How many sleepless nights he's had. How terrified he's been that she'll think he's a failure. That he'd put their comfortable lives in Singapore at risk. I was down a million. A million pounds! Lisa's horrified. Literally not the half of it. But cool, I'm glad that shocked you. But like I say, I sorted it.
You need to think more about us in future. Then she's gone. He grabs another beer, watches the Tamil workers down below clean the swimming pool and mow the lawns. He doesn't want to lose his job or this life, so he makes himself a promise. From now on, no more hiding mistakes. No more taking risks. The 5-8's account is out of bounds. He's going to be a success, and he's never going to deceive Lisa ever again.
You promise? Do you promise? Oh, I can't make that promise, Alice. I feel so stressed. Look at my eczema. Oh, it's literally bringing you out in a rash. Yeah, it's making me really, really... But do continue to listen. LAUGHTER
This is the first episode in our series Breaking Bearings. A quick note about our dialogue. In most cases, we can't know exactly what was said, but all our dramatisations are based on historical research. If you'd like to know more about this story, we especially recommend the books All That Glitters, The Fall of Bearings by John Gapper and Nicholas Denton, Going for Broke by Judith Rawnsley and Rogue Trader by Nick Leeson.
I'm Matt Ford. And I'm Alice Levine. Karen Laws wrote this episode. Additional writing by Alice Levine and Matt Ford. Our sound design is by Rich Evans. Script editing by Afsana Gray. Our senior producer is Russell Finch. Our executive producers are Stephanie Jens and Marshall Louis for Wondery. Wondery.
Follow British Scandal on the Wondery app, Amazon Music or wherever you get your podcasts. You can listen to episodes of British Scandal early and ad-free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts. Before you go, tell us about yourself by completing a short survey at wondery.com slash survey.