- 14 minutes ago
Nick Leeson is an English former derivatives trader whose unauthorized futures trades in Barings Bank’s Singapore office reported losses exceeding $1 billion.
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00:00My name is Nick Leeson. I'm a former derivatives trader. My reckless trading unfortunately resulted
00:05in the collapse of a 233-year-old merchant bank with losses of $1.2 billion. And this is how crime
00:13works. I had the biggest position. I needed the most money, the most margin. I was reporting the
00:22biggest profit. I was very much the ascending star within the organisation for a period of time,
00:27but then had a very spectacular fall from grace.
00:35I had the opportunity to move to Singapore in 1992. In Singapore, I ran the whole operation
00:42for Bearings. It was very much a new business. Bearings has a historic reputation amongst
00:47banking in the UK. It was 233 years old. It was one of the oldest merchant banks, if not the oldest.
00:54All of the transactions that Bearings would have made during that period were with other financial
00:59institutions. So big fund managers, other banks. It wasn't a bank where you would have normal people
01:07having accounts, making investments. It's all your trades for the day. You know, those have all got
01:12account numbers on them. The 5-8 account is the, you know, the infamous account where I kept
01:19any losses. The reason behind the 5-8 account is 8 is a lucky number in Chinese folklore. If there were
01:28any errors, those errors would be captured in Singapore and then reported back to the UK. So
01:34the type of errors would be, you know, you've got 2000 people or 1500 people in a trading pit. It's very
01:41easy to think you've got one person's eye line, but you've actually got the person behind you,
01:48behind that person's eye line as well. So they might think you've traded with them.
01:53There might be price discrepancies. So all of those stuff has to be reconciled during the course of the
01:58day. And that's what would go into an error account. So that's where the 5-8 account was born.
02:03You know, that was sent back to London. And after a period of time, London said they didn't want to
02:08see all of the detail. So it was kept in Singapore. So it's on one of those occasions late at night,
02:15four o'clock in the morning, you know, one of the girls who worked on the trading floor, you could
02:19see that she'd passed the trading correctly. You know, the very next morning, I go in to see Simon
02:25Jones, who was the head of the operations department in Singapore, sit down, tell him that we have
02:30an error, asked me to quantify it. I said about £10,000, that's where it was. And he asked me to
02:36refer it back to Andrew Bayliss, he was the head of the trading area, and would have understood it
02:44very, very quickly. So, you know, it's eight o'clock in the morning in Singapore, that's probably,
02:50you know, two o'clock in the morning, UK time, so I'm not going to be able to get hold of Andrew Bayliss.
02:55So then I'm in this massive dilemma, you know, do I wait for the market on the market open? Do I
03:02cut that immediately, which is the way that you are supposed to follow through on this process?
03:09Or do I take a chance and see if the market gets back to the level that we were, that the position
03:15is, and then I don't even have to tell Andrew Bayliss. And I've got, you know, four or five hours to
03:22run that position and see what happens. And unfortunately, what I chose to do is the latter.
03:28Throughout the time that I worked at Bearings, not at Morgan Stanley and definitely not at Cootes,
03:32but throughout the time I was at Bearings, I would see people put trades into error accounts all of
03:37the time. So when it came to my turn to see if I wanted to put something in an error account and
03:43hold it for a period of time, it was far too easy because I'd seen so many people do it in the past and
03:49not be reprimanded, not get caught. And that's the, you know, the first really bad mistake that I,
03:55that I made in my business career. And it's, you know, unfortunately over time, it just grew and grew
04:03and grew. So look at the five eights account chronologically. There's a year end audit in
04:08September of 1992. The loss at that stage is up to $5 million. Deloitte's are coming in to do
04:16the audit. There is a $5 million discrepancy in the year end accounts. Deloitte's put that down
04:23to a foreign exchange discrepancy. And somehow I managed to survive for a little bit longer.
04:30By May of 1993, the loss is $20 million. And then in May of 1993,
04:36we have the most perfect expiry in the options market. You know, the options expire at the most
04:41perfect level. I make all of the 20 million back and I have a quarter of a million pound profit that
04:46I need to get rid of, which is a lot easier to do. I transfer it to somebody's trading book in Tokyo
04:52and genuinely go home that weekend thinking, that's great. I can start again. Now I'm young
04:58throughout this process. I was 25 when I moved to Singapore, you know, not a great deal of management
05:04expertise. The people that worked for me were my friends. They were never admonished.
05:09They were never reprimanded. So on the Monday morning, when somebody makes a mistake again,
05:13it goes back in the five-eighths account. You know, as difficult as the previous seven,
05:18eight, nine months have been, I very stupidly put the trade back into the five-eighths account.
05:24You know, one of the reasons is that I've corrected it once. I probably think I can do it again.
05:29And that's when it started to blow up. You know, the markets are moving aggressively lower.
05:34I'm the wrong side of the market. So these positions are getting bigger. I'm doubling down.
05:39I think by the end of 1994, I probably had about $600 million from London, from the Treasury
05:49Department in London. So the loss has to be fairly close to that number.
05:52Everything is done with hand signals. It's very noisy. It's very boisterous. Before I arrived in
06:04Singapore, there was only one main product, which was the Eurodollar, which is also traded in Chicago.
06:10But Singapore was filling a gap, if you liked, between the US, Europe and the different time
06:16locations. So the Nikkei 225 had only really kicked off in the last year or so in Singapore. And so it
06:22meant that in Singapore, you went from trading 2,000 contracts a day to trading 20,000 contracts.
06:28And that meant that the Singapore International, well, I think everybody wasn't ready for it.
06:33The rule of thumb is that it takes about 30 minutes to match a trade. You and I trade. We both put in a
06:40little trade ticket, a docket. One's a buy, one's a sell. You put those into the system on the trading
06:47floor, the Cimex system, and hopefully those trades match. So they need to match as to quantity
06:54and to price and month. And if it doesn't match, then you have to resolve that issue as quickly as
07:00possible. Because the settlement systems weren't able to deal with it on the floor at the time,
07:04because of this massive influx of volume, it was taking 14, 15 hours to match the trade. So it's
07:10you know, and that means you've got exposure for that period of time. You've got all of these tickets
07:15that are flying around getting lost and all sorts of stuff going on. So that was the backlog that was
07:21being created during that period. If you go back to bearings back at the time of the collapse in 1995,
07:29we'd only just taken on an internal audit team, as ridiculous as that sounds. We had a risk manager,
07:36we had one risk manager. So if you go into Citibank or somewhere now, there would be 3,000, 5,000 people
07:43working in risk management, there would be a similar number working in compliance. But at
07:48bearings at the time, the risk manager, the compliance officer were the same person. So you
07:53would find people double jobbing. When I was trading and people that I knew would have been trading back
07:58in the 90s, we'd trade and then we'd tell people that it had been done. Whereas now it's part of the process.
08:04Singapore is a, you know, it's quite a controlled environment. The Porsches, the penthouses, the yachts
08:16wasn't the life that I was living. I have to be honest, I really didn't see that. You know, it was much
08:22more family orientated. You know, you'd go out as you would in any walk of life and you, you know, you'd enjoy
08:29yourself at the weekends, you'd go to concerts and the like. I think Singapore is a country that doesn't
08:35have a drug culture. The penalties are really severe. So you didn't encounter anything like that.
08:41And it has strict rules, you know, about outraging female modesty and stuff like that. So there are
08:48things that you can get away with a little bit, but they're not the sensational stuff that you might see
08:56on Wolf of Wall Street or one of those type of movies. Singapore wasn't that country. When I moved
09:02to Singapore, I took a pay cut because it was the opportunity I wanted more than anything else. And
09:07so I think my salary probably was £50,000 at the time. That would have been in 1992. Obviously,
09:15the salary has increased quite significantly over that period. But Behrens were renowned for paying big
09:21bonuses. You know, it was, I think, my smallest bonus at Behrens was a year's salary. And that would
09:28have been fairly standard. I think what bonuses do is they create a lot of short-termism. So people are
09:35trying to hit numbers so their bonus gets paid. And you can see that that definitely happens. If you look
09:40back at some of the reporting that I was doing during that period, people were focused, obviously,
09:45on the profit. I think as long as it reflected a profit, there wasn't enough investigation that
09:51went into it. The problem was that I was the outlier on pretty much every metric you can imagine. I had
09:57the biggest position and all of that should have attracted more attention. But unfortunately, it
10:02didn't because the focus was on the money that was being made. And if you were reporting a profit,
10:08it tended not to be investigated that much. You know, there were lots of people getting seven-figure
10:14bonuses in the senior management roles at that time. And some people getting even more than that.
10:20Behrens was a charitable trust. Why was it a charitable trust? If you're a charitable trust,
10:25you can pay bigger bonuses than you can in a corporate entity at that particular time. You know,
10:33I know you get a lot of flack because it was a charitable trust and it did do a lot of good.
10:38But it was also a vehicle that enabled Behrens to pay huge bonuses to their staff.
10:49I certainly didn't confide in anybody during that period, but there were a couple of other episodes
10:54in Singapore or in Asia at that time. There was a guy who worked for Behrens in Hong Kong who was
11:03sacked for misrepresenting the profit on his trades. The problem for me was that every time I stepped
11:10over the mark, there was never any pushback. I was always pushing further and further. It was very
11:15Jekyll and Hyde during that time. I knew what the reality was in terms of the trades. As much as I
11:22didn't want to look at the trades and look at the statements and see the number in front of me because
11:27it was a mix of frightening, embarrassing and a number of other emotions as well.
11:34You couldn't distance yourself completely from it. So you knew roughly what it was,
11:38but then you had to go out onto the trading floor and appear confident and get involved.
11:43And still you're trying to manipulate the situation so that you can get the market to go back up.
11:50And everybody thought that every time they traded with me, they lost money.
11:54And they probably did because I was manipulating the markets in both locations.
11:59But ultimately, as the market collapsed, I was the one that lost far more money than anybody else.
12:06So there's a, you know, there is always that facade. You then go home, you've got a domestic
12:10situation where your wife thinks that everything's okay. She's got a great lifestyle. She's enjoying
12:15herself in Singapore and you've got to maintain that as well. So you're balancing all of these,
12:21but it's all a tissue of lies, you know, underneath it all, you know, there's,
12:25there's no stability. It has the potential to crash down at any particular point.
12:30The parallels that people draw with gambling, I think anybody who works in the investment or
12:35financial markets always shies away from the association, but there are parallels, right? The,
12:42you know, the doubling down is one of those. Or the other parallel that you can draw is that a lot
12:49of people, when they're gambling, they start to chase their losses. And so there was a lot of chasing
12:54in the, in this situation as well. And I'm sure if you, you speak to any bookmaker, they,
13:00they make most of their money from people that chase their losses.
13:03Behrings was a very small bank. So a treasury department that would look after the funding
13:14and where capital was deployed. So I would send emails on a regular basis asking treasury for more
13:21money. Treasury was in London and they would send that money over and there would be an intercompany
13:26balance between the two parts of the organization. I knew that they were having difficulty getting the
13:31funding to me, that it was getting more and more difficult over this period. The capital base of
13:36the bank was only £250 million, right? So it was a small bank, but yet they'd sent me £650 million.
13:43So they were borrowing the money. They were borrowing it from Barclays. They were borrowing it from Citibank
13:48and they were feeding me in Singapore to continue going with the process. And then at the beginning of
13:541995, it became even more difficult for them. Barclays and Citibank refused to lend them any more money.
14:01Obviously they'd bypass some sort of credit limit. They went to the stock market and they issued a
14:05bond for £100 million that also found its way out to me in Singapore. So from a governance perspective
14:12and looking at things holistically, you know, they weren't testing or challenging what was going on at
14:18the time. You've got a small bank, so £250 million worth of capital. The legal limit you can lend to a
14:24subsidiary is 20% of the bank's capital. So that's £50 million. I'm 13 times in breach of that limit,
14:32you know, because I have £650 million with me in Singapore that are funding my illegal positions.
14:39The, and it's more than two and a half times the capital base of the bank as well. So these are,
14:44you know, when you look back and you look at the sort of numbers, it's outlandish that it was allowed
14:49to get to that sort of level. You have to report this to the regulators. The regulator at the time
14:55was the Bank of England. So the Bank of England would get a report every single day that would
15:00detail how much money was being lent to Singapore. And they could see that they were exceeding the
15:05legal limit. But the Board of Banking Supervision, which met after the collapse of bearings, asked the
15:12Bank of England what they were doing. And the person who worked in that role, who was looking at the
15:18breaches, and this is actually in the report, it says that it was too far down in his in-tray
15:24and he hadn't got around to it yet. So it's like, you know, when you look back at bearings, it's a
15:30systemic breakdown in the system that includes regulators, auditors, and, you know, so many different
15:37people who really weren't doing their jobs, me very much included, you know, my incompetence and
15:42negligence is very much at the forefront of everything that went on. And, you know, there's no excuse
15:48for that. But I, you know, I accept full responsibility and accountability. But there were
15:53hundreds of people that should have been a bit more aware of what was going on. Obviously, it's a bit
15:59of a confidence trick, in terms of if they would ask me questions, I'd be very confident about my
16:06responses, even if it was complete and utter rubbish. I'll give you an example, right? So we had a
16:12squawk box in Singapore, where I would pass orders to Osaka, which is where the Nikkei 225 orders would
16:20be transacted in Japan. So one day, I got a phone call from Andrew Bayliss, and he was concerned because
16:26my position limit was 250 lots of the Nikkei 225. And he could see trades that were massively in
16:32breach of that. So a trade for 5000 contracts, a trade for 10,000 contracts, and many of those on
16:39the same day. So clearly in breach of the position that I was allowed to hold, and many times in
16:46breach. So I told Andrew that what was what he was actually seeing was that the settlement system was
16:50grouping together trades at the same price, which is complete and utter rubbish, you couldn't trade that
16:56sort of volume at that particular price. But if he'd really understood the business, he wouldn't have
17:01been asking me, he would have phoned Osaka and said, how did you receive the order? And that would have
17:07thrown everything out. Everything would have been exposed at that point, because the orders would
17:12have been by 5000 at the market by 10,000 at the market, and fairly in fairly, fairly rapid order as
17:20well. But because he didn't understand how the business fitted together, he didn't go that far. So there
17:25was a great deal of knowledge, you know, there's a lot of people who went to really good schools,
17:29really good universities. But, you know, however much knowledge you have, if you don't understand
17:34the business, you can't challenge it. That allowed me to somehow wiggle through some of those controls,
17:41to go from thinking it's, you know, I'm not going to get exposed this minute, because they haven't
17:46done it yet. I've got a day, or I've got two days, and then you think in terms of weeks, and then you've
17:51got maybe, you know, after a period of time, you think I've got a month to correct the situation.
17:57And still, they're not asking the right question. So you get a little bit more confident,
18:01the balance sheet, the financial accountant in Singapore would only pick it up on the last day
18:06of the month. So that's the only day that the five-eighths account had to be zero. So I'd sell
18:11a load of options, I'd receive the premium, that would take the account balance line down to zero.
18:17And as long as I was getting margin from London, I was able to continue this ad infinitum, or until the
18:25bank ran out of money, which unfortunately is the result in this case.
18:35So the pressure starts to build through 1994. You know, there's lots of things that are happening
18:41on the success side of it. You're winning awards on the Singapore International Monetary Exchange for the
18:47highest customer volume. 90% of that is for my illegal five-eighths account. So, you know, it's
18:53a success. It's something that's fated by everybody within the organization. But again, you know, you
18:59know the reality. This award is for your five-eighths account, for the illegal trading account.
19:05And again, you know, how do people accept that we're doing this volume of trading,
19:10or they look at the bona fide level of trading that they're seeing reported and they're winning
19:15an award. It just doesn't, it doesn't correlate. But yet the management would come from London or
19:21Tokyo to help me receive those awards and be a party. They hired out Grand Central Station,
19:28New York, to have a party after the conference. And the only person who didn't attend was me,
19:33because I was in the bar downstairs getting drunk. It was probably, you know, that was probably
19:39above the limit of what I was able to continue balancing, you know, juggling at that particular
19:45point. There was all of these people having a conference about the money that we were making
19:49in Singapore. You know, at the beginning of 1995, Ron Baker was talking to me about what my bonus is
19:56going to be. Is half a million pound enough?
19:58And they're conversations you don't want to have. And you know that the pressure is starting to build.
20:05Can't bring myself to enunciate what's happened over this previous period and put my hand up and be
20:13honest about what's going on. I'm in Ireland at the end of 1994. And on the very last day of the month,
20:21one of the girls in the office, she phoned me up and she said, we haven't done anything with the
20:24five eights account. And so I said, just pass a one sided journal entry, credit the account,
20:29just buying a bit more time. But I didn't expect to go back to Singapore, but I still can't put my
20:34hand up, you know, my wife, my family and tell them what's going on. So I stepped foot on the plane
20:40back to Singapore. There's an earthquake in Kobe, the markets start to fall even quicker, which means
20:47that position is increasing more dynamically. And the loss is, you know, 650 million pounds,
20:55so probably 820, 840 million dollars at that particular point. I've made this one sided journal
21:02entry. So the balance sheet doesn't agree. So I've got to come up with an excuse. And that's what
21:07becomes known as the SLK receivable, where I'm trading an OTC option, which I have no authority to do.
21:14It's for 7 billion yen. So it's not a small OTC transaction. And then I have to manufacture
21:21an audit confirmation to prove that as well. An OTC transaction is an over the counter transaction.
21:29So it doesn't happen on the exchange floor. Deloitte's wanted an audit confirmation about
21:35the amount of money, which obviously I couldn't provide. But what they did do is they asked me to
21:42seek out the audit reconciliation, which isn't something that would happen these days.
21:48So I went home or I may have done it from my desk in Singapore, but the audit confirmation
21:55needed a signature from somebody at Spear Leeds Kellogg. So I managed to get a signature from
22:01somewhere and really just pasted it onto the document where it was required. Went home to my apartment in
22:10Angola Park in Singapore and faxed it to the auditors. So when the auditors received it on the top of the
22:18piece of paper, it says from Nick and Lisa. So you can see that it's not come from Spear Leeds Kellogg.
22:25There's only one inscription on the piece of paper and it's from my house.
22:31And yet they still accepted that and didn't ask any more questions. So the lack of oversight
22:39throughout the whole story is quite astounding. If you look at auditing 101, that audit confirmation
22:48would break every rule in that. And I'm just trying to keep going through this process. On the 23rd of
22:55February 1995, somebody came to me with a reconciliation of the five-eighths account.
23:01A reconciliation should be done every single day. At Morgan Stanley, I used to do the reconciliations
23:07myself. Nobody did those reconciliations for a two and a half, three year period.
23:12But in February, at the beginning of February 1995, London obviously concerned about the amount of money
23:19that we had in Singapore, the amount of reporting that was coming back from my office in Singapore.
23:27As well, they sent a settlements person, Tony Railton, out to Singapore to look at what we were doing.
23:35But still, it took him 20 days to do a reconciliation. And when he did that reconciliation,
23:41it's black and white, right? We only have two accounts, London and Tokyo. You add them together,
23:46you compare it to the Singapore International Monetary Exchange, and there's a huge discrepancy.
23:51And so when he confronts you with it in black and white, there's no excuse, there's no explanation,
23:56right? There's nothing that's going to wash at that particular point. So you make your excuses,
24:01you leave the office, and you go back to home, you pack a bag, and you get out of Singapore.
24:07And you're really not aware of quite how disastrous or calamitous the effect of your actions is going to
24:15be. I didn't know that I had twice or two and a half times the capital base of the bank with me
24:20in Singapore. But you want to get out and then just see what happens and then work out what your next
24:27move is from there. So it's fight or flight. I never expected the bank to collapse. Yes,
24:32I knew there was going to be a considerable loss, but the bank had sent that money to me. So I thought,
24:38I didn't think, I didn't really think about it, but you would have expected that the loss was
24:46something that they were able to consume.
24:53So on the 23rd of February 1995, when I left Singapore, the plan was to go to Phuket and meet
24:59up with somebody who worked on the trading floor just to try and work out how bad
25:03everything was. But all of the flights to Phuket had gone in the morning. So the only place we could
25:10get to that afternoon was a place called Kota Kinabalu, which is the Malayan side of Borneo.
25:16So that's where we flew to. We stayed in the Shangri-La, just trying to work out quite how bad
25:21the situation was. Went down into the local news agent in the hotel we were staying in
25:26and picked up the Asian Wall Street Journal and the headline is British Bank Collapses. So
25:32that kind of hits you full in the face and you realise quite how bad it is.
25:36You know, that's starting to build. Trying to pretend to be normal at the same time,
25:42which is difficult. Obviously my wife is more aware of what's going on now than she was, but
25:47you still don't really want to talk about it too much. So do you go to Australia and New Zealand or do
25:52you go right and try and get back to Europe. So after a day or so, we had to change hotel
25:59because the hotel that we were in was very touristy. Obviously the story is everywhere on the TVs and in
26:05the newspapers. So you're a bit worried about being caught there. So we go into a more local
26:11hotel down in downtown, but we're trying to work out where we can get back to. And the only flight
26:17that's going out anytime soon leaves from Kota Kinabalu goes to Brunei. Brunei it goes to Thailand,
26:24from Thailand it goes to Abu Dhabi and then from Abu Dhabi it goes to Frankfurt. No reason or rationale
26:30for flying to Frankfurt, just it was the first European destination and obviously was closer to the UK.
26:36Didn't really expect to get through passport control in Malaysia, expected to be stopped and
26:44detained there. But somehow we managed to get through passport control. We had to wait for eight or nine
26:50hours in Brunei then sort of made our way to the boarding gate and above the boarding gate there's a
26:55TV and you know this is the only story that's on on repeat throughout the whole whole period. So you're
27:02trying to get on the flight without anybody recognizing you which we just about managed to do.
27:07You sit down and they're giving out newspapers as they used to do in the day and your front,
27:12your picture is on the front page of all the newspapers so you're, you know, just sat there
27:17as well and you're trying to put blankets over your face and and silly sort of stuff and what was
27:24happening at the same time is the travel agent obviously had recognized me and had reported that
27:30she'd sold a ticket to us and she'd reported that to somebody and then eventually it got to Interpol.
27:38So now Interpol are looking for us.
27:45When I arrived in Frankfurt however many hours it took to get there, the police came and arrested me
27:50off of the plane. To suggest that there was a massive sense of relief would just be a lie.
27:55You know you're just facing the next hurdle. Part of that was getting my wife sent back to the UK.
28:01The original charges said that we were traveling on false passports which we weren't. The charge was
28:06removed from my wife at the time. You're being moved to a different prison in Herkst in Frankfurt.
28:13You know you're kept on 24-hour lockdown for a week which is tough and you you're going through
28:19that very you know emotional process of um of losing your freedom and it's tough to deal with.
28:26It's the time of the Balkan states were all breaking down so there's a lot of gun runners,
28:30there's a lot of people from Yugoslavia. So it was a you know it was a dangerous place and it's your
28:35first time in in that sort of population and you've got to traverse it and work your way through it.
28:40You're going through this constant turmoil about what your sentence is going to be.
28:44The speculation in the English media is that it could be up to 84 years. We speak to the
28:49the serious fraud office um you know we threatened to go to the European Court of Justice to to but
28:57they're all just delaying tactics to uh until we're eventually willing and able to explore some sort
29:04of deal with the Singaporean authorities and we're not negotiating with the Singaporeans. They arrive
29:09in Germany they want to take me back immediately. They offer a maximum of eight years in prison
29:14um you know specimen charges and there were certain other conditions. I have to pay a certain amount
29:20of money to the Singaporean police. I have to make a formal apology to the people of Singapore.
29:26Yeah we agreed to the deal which would be five years four months in prison and you know Germany was tough
29:33um dangerous but um Singapore was tougher probably less dangerous but a much tougher regime.
29:44In Singapore the prison was Tanamera so it was maximum security. Everything is very regimental.
29:53It's modelled off to offer some sort of military regime. You have to squat down when you see an
29:59officer and say good morning sir and uh and things like that. I'm sure you don't see them in too many
30:04English prisons to be honest with you. Um but yeah it's it's tough. Everybody's a triad gang member.
30:11I was the only exception. Um other English inmates who might have had a drug offence or something they
30:17had to choose sides in terms of who they wanted to support and the boredom is unbelievable. Um you're
30:24locked up for 23 hours a day so your your daily regime would be somebody waking you at six o'clock
30:30in the morning giving you your breakfast to the cell so it would be three pieces of bread
30:34and a cup of tea or a cup of coffee. Um at lunchtime you'd go out into the yard for an hour so I used
30:42to run for the hour then you'd go back to the cell do a little bit more exercise food would be delivered
30:48about 12 so it'd either be chicken a fish which was quite small and had lots of bones and the head
30:55on it still so I wasn't too keen on that or mutton um you know some fairly old pretty rank sort of lamb
31:04and rice which you're not used to eating three times a day so you have to kind of get used to that
31:09and then your dinner would arrive at about four o'clock in the afternoon and then lights out about
31:15eight o'clock at night uh and there's nothing in the cell they're pristine white you sleep on the floor
31:20there's enough room for three of you uh and there's a you know a hole in the uh in the uh in one corner
31:28where you go to the toilet and there's a small barrier that kind of uh dissects that a little bit
31:34if there was a one advantage of Singapore because there was so much control over what goes on
31:39it's fairly safe you know there is violence and the violence is really quick it's really brutal um
31:47but you can avoid it when something does happen and there would be gang clashes so you'd get a gang
31:52clash every now and again and there would be you know there would be weapons that would be used that
31:57they'd um that they'd either brought back from workshops or they'd made themselves somehow from
32:02a toothbrush the guards would come in you know commando guards with uh full battle gear on with big
32:10sticks and they would start hitting people over the head unless you were on the floor holding your head
32:15in your hands so it was brutally put down um but it maintained a degree of safety within the prison
32:22so i never really had any issues you know i had one sort of disturbance with one of the main people
32:27in in my wing on one occasion but i used to kick box when i was a um when i worked in the city so you
32:34know i was able to sort of survive the 30 seconds or so that was required uh in in that you know i used to
32:40get a lot of letters so you would get the letters monday to friday not the weekends so on a monday
32:45you'd you know you'd start the thought process would be that you've got a one in five chance of
32:51of getting a letter that day and then if it doesn't arrive you know you the next day it's one
32:56in four so it's an improvement so as long as you can reframe the way that you're thinking about
33:01different things and break it down into smaller periods so visits were few and far between
33:07but you could look forward to those so it's all about reframing how you think about things
33:12in order to survive but yeah it's tough whilst i was in prison in singapore they used to regularly
33:17change my cellmates because um they didn't want them getting too friendly with me maybe
33:23so they would change my cellmates on a fairly regular basis and on one time i'd had a couple
33:28of malay inmates that were getting on quite well they were from different gangs but they
33:32um they shared a religion so they would pray and um and do that sort of stuff and there was no
33:39reason to change them but the guards turned up and they said oh we've got to do they bring you out
33:43of the cell um empty the cell completely there's nothing in the cell anyway it's not a great deal
33:48to empty and they brought us all out and then they said they were changing my cellmates i said it's
33:53it's ridiculous right so i said look i'm not going back in the cell then and so um they decided that
34:02for my disobedience that they'd send me to the punishment cells so i stayed in the punishment
34:06cells for about 31 days the door never opens the daylight is blocked out they turn the lights
34:13off during the day and they turn them on at night so there's a bit of sensory deprivation
34:17um but your and your food is given through a cat flap in the door so it's a lot tougher and you
34:24know there's nothing in the cell um so you literally can walk up and down that's it and you work out that
34:29if you walk up and down 750 or 755 times that's an hour and that's how you pass the time for 31 days
34:38so i went back down to the general area and then about an hour or so later i was called for a visit
34:44and it was the british vice consul who was there um so she said that you know i'd lost a bit of weight
34:51didn't look particularly well my eyes were bloodshot obviously i've been in the punishment cells
34:55and you know starting to get a bit of pain in my stomach so i went to see the doctor
35:00in in the prison he then took some blood tests my red cell blood count was low so he gave me some iron
35:07tablets and that was it so i'd go back and the iron tablets would arrive every day you'd take those
35:13the pain's not getting any better they took me to a hospital uh close close by i was in a and e
35:22and the doctor who came down found the lump straight away um so he said i'm going to need to
35:27send you to the ward upstairs the guards have got guns there's big double doors and you're chained to
35:32the bed so it's a little bit um it's a little bit over the top one day when i was there you know
35:38they'd done a couple of investigations by this stage they decided that it's cancer
35:45and they told my lawyer and they found me curled around the bowl in the toilet bowl
35:51just because the tumor had got so big that it pushed onto my lung and collapsed my lung
35:57so that i was incapacitated in the toilet so they took me down for an emergency operation they removed the
36:04tumor that was 10 centimeters by seven centimeters uh and then um you know i i had 38 staples in my
36:12stomach and then um they after a couple of days they took me back to the prison and then they said
36:19that they wanted to give me chemotherapy uh inside the prison but you know i refused the chemotherapy on
36:26the basis that i wasn't going to let them leg cuff me to the bed to which they were all aghast they
36:30were showing me the rules and regulations that you have to go but then eventually they made a decision
36:35that i could go and um just be like a a day patient um and go and get the chemo um for five days
36:45or five continuous days and then it'd be three weeks off so i did that for six months um
36:51and then you know that would have been august of 1998 and then i was released in july of 1999 i didn't
37:01i wasn't released early or anything everybody gets a standard one-third remission so um i would
37:08have been released in accordance with uh with those rules
37:11after i fled singapore on the 23rd of february the sort of chronology from that sort of point
37:21would have been the 24th everybody would have been aware that the bank was insolvent uh couldn't trade
37:27anymore and they were running around uh trying to do their best to rescue it that would have continued
37:33over the weekend 25th and 26th of february with the bank of england and on the monday which is the
37:4027th of february bank was ultimately sold for a pound to ing i think the bearings name is still
37:47out there in in the us i think it's the fund management side of it um bearings asset management
37:52was never taken over by ing so bearings asset management has always uh has always been around
38:00since the collapse of the bank they they didn't offer me my job back as to the question of whether um
38:08no bank is big too big to fail i mean it's a difficult one i think banks are an important part
38:16of uh the infrastructure of many countries um and there probably are one or two that are too big
38:23to fail because they're involved in so many different transactions at so many levels i mean
38:29i think lehmans is probably the obvious example what ensued after the collapse of lehmans was a global
38:36financial collapse because there was fear there was panic and lehmans were involved in so many
38:43different transactions at different levels with bearings it was one country it was all in singapore
38:48it was all in one product which was the nikkei 225 and so it was easy to contain and what you find now
38:56is that a lot of trading is done within the hedge fund industry yeah nobody else went to prison there
39:05were a few of the directors that were banned from holding other directorships for a period of time
39:13you know i'm often asked if i think that's just yeah probably um yeah they didn't do anything
39:18criminal their only thing that they're guilty of is you know a fairly high level of stupidity
39:25to allow it to happen you know they've got to look at themselves in the mirror i think that's the
39:29most damning thing that they have to do in relation to um to their involvement in the collapse of
39:36bearings and but you know i i'm front and center um fully responsible totally accountable for
39:43everything that happened
39:49so i was released from singapore in 1999 i signed an injunction for 100 million pound whilst i was at
39:56heathrow airport from the liquidators and then was spirited away in a car and then slowly from there
40:03you you know you kind of have to get back into life and you know being in prison for four and a
40:09half years you're not quite institutionalized but you're you know you're not used to making decisions
40:15you know on a on a very basic basis i wasn't used to wearing shoes because you know you walk around
40:22barefoot in singapore for nearly four years whilst you're in prison so it was it took some uh rear
40:30climate climatization um everybody was going to work uh on a monday and i was kind of left there
40:37feeling a bit empty so it was important i put some structure back in my life so i did a psychology
40:43degree for three years in in middlesex um and then met somebody remarried and moved to ireland
40:51in those first months and years the liquidators were paying me a monthly stipend to continue to
41:00help them but also that was based on me needing more medical advice as i was continuing my recovery
41:07from cancer so you know i used to say to the liquidators if i go and get a job what what do
41:13you want and they said we want half of what you're earning and and that was you know regardless of where
41:19the job was i mean i did tv interviews there's one in holland that went to the liquidators obviously
41:25i'd serialized the my return in the daily mail that went to the liquidators and then given the
41:31opportunity to do some after dinner speaking i always used to be quite introvert um was a million
41:37miles away from being extrovert so wasn't used to that sort of environment but you know i've been doing
41:43it for 26 years now so i've got quite good at it and i talk at keynote uh conferences as well and give
41:50addresses there talking about risk management compliance and the importance of corporate
41:55governance i do a bit of corporate intelligence work these days um that's kind of that it's moved
42:01slightly to the side of that as well that we look at some scams that that people have got involved in
42:07where they've lost money and we try to repatriate those funds we have a number of cases with the
42:14financial ombudsman at the moment i wrote the book rogue trader whilst i was in prison in germany i had
42:21nothing to do with the movie um so david frost made the movie he obviously recruited ewan mcgregor to
42:27take my role uh within the movie the movie is taken from the book so it's it's it's accurate you know
42:35people driving around in porsches in singapore it didn't happen you know me driving a beaten up old
42:40car going to the airport it didn't happen but you know that's um that's the way movies get made i
42:46suppose so i don't think any bank is really um too much at risk from from people going rogue these days
42:58the controls are so much better the quality of people in those roles is so much more superior than
43:04it ever has been you've got you know real-time data that is helping the situation as well the
43:11problem is that you still have very niche areas that aren't getting the amount of surveillance and
43:19scrutiny that they should so if you look at the more recent cases of financial scandal you know
43:25there's one at macquarie bank which was during the covid period absolutely astonished that that happened
43:31but still you know it didn't get to a bit more than 30 million right still a big number um but
43:38there were a set of unique circumstances around covid and working for home um you've got some family
43:46firms bill huang and the losses at archegos capital part of the family firms wasn't really an area that
43:53had ever been looked at so it's been looked at and you know the single stock exposure that he had was huge
44:00um again the lack of oversight and the lack of communication between the banks and sharing
44:05information i think was quite shocking during that one you've got ftx which is in the crypto space where
44:12they're trying to avoid all sorts of regulation very you know systemic breakdown kind of like bearings
44:19you know the auditors weren't doing their job again um you know the regulators if there was any
44:25during that period one and he was you know he's obviously going out and supporting political
44:30parties in the us and giving out lots of gifts during that sort of period as well and everybody
44:37was believing the story yet behind it was just a house of cards i think it's very difficult to suggest
44:44or predict where the next big issue is going to come for the financial markets there's a lot of
44:51um spread betting and cfd firms that have been growing um over the years i don't think it's as
44:58it's regulated as tough as maybe it should be um there's there's some unsavory stuff that goes on in
45:07that area um between different books that that that are traded the banks have it right probably at the
45:16moment you know they've got the right number of people working in compliance the right number of people
45:20people working in risk management and there's an awful lot of oversight and control of everything
45:27that goes on i think the worry from a mainstream financial marketplace is possibly deregulation
45:36and what deregulation looks like you know it was a process it was a during a period of deregulation that
45:42you know i popped up um to the forefront of everything that was going on but you know you would think that
45:49it's going to be better managed than it was in the past but if the government are managing it you know
45:55maybe not i think the the industry over the last 20 25 years or so it's like an elastic band the the
46:04degree of regulation the degree of control has just increased significantly and that takes people away
46:10from the real challenges that they should be doing on on a daily basis i'm not convinced that ai is the
46:18answer to that i think technology has a huge part to play in everything that goes on in the world of
46:23finance but you know delivering up more false positives is is not going to be advantageous to the
46:29industry i think it's already an issue where they're dealing you know a lot of people are dealing with
46:34those things the controls need to be continually improved i think crypto is an area that that could
46:41be improved upon i know they are resistant to regulation and to change but i think there are so
46:46many episodes in the world of banking where there has been poor oversight poor controls and and scandal
46:55that i think they can learn um and i think therefore they should be more willing to learn you know one of
47:01one of the simplest pieces of advice i give to anybody in any situation right it doesn't matter
47:06whether it's finance health or anything else that's going on in your life you know i think the art
47:12communication is the most important thing you can do at any stage so you know i always encourage
47:18certainly my children to ask for help and advice right it's the one thing i didn't do and if i had i
47:24would have been surrounded by people that would have helped me and pointed me in the right direction
47:28whereas i at 25 years old saw asking for help and advice as a sign of weakness it was more the culture
47:35uh around 1990s banking but if i'd seen it as a sign of trying to do things correctly you know things
47:41would have been very different and uh you know i might still be working in a bank now yeah the one
47:46thing that rings true for me uh loud and clear is that you know it's easy to get another job it's not
47:53easy to get another reputation so you know it's important that you always do the right thing
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