How One Guy Bankrupted One Of England's Oldest Banks 

Ah yes, the classic technique of tanking your entire bank to not deal with a loss equivalent to a millionth of the bank's profit LOL

As an accountant, it blows my mind that no one anywhere along the way saw this ballooning account on the trial balance and asked, "What the heck is that?"

Now do the prequel and tell the story about the man who nearly did that 70 years earlier to the same bank.

I just can’t wrap my head around doing fall of this over 20k. He made 10% of this billion dollar bank’s yearly profit! I doubt he’d even get a slap on the wrist.

I remember reading "Around the world in 80 days" as a kid. I was surprised by the fact I learned from a footnote left by the translator saying that Barings bank had survived hundreds of years and is still in the business. Little did I know, the book was a hand-me-down from my youngest uncle and was quite outdated.

One has to take into consideration that Nick got into his position by actually bringing in a lot of revenue and profit, he didn't fumble into the position, he actually earned it. Then failed spectacularly.

Imagine the panic when you keep losing money, so you try to make it back but then you double the losses of your bank :/

Whilst it's evident Leeson was the driver behind Barings failure, others almost certainly knew what he was doing. He was the scapegoat. I used to work in the building directly behind Barings and remember press everywhere when it collapsed. I was talking to my old boss at the time, and he said if Barings had asked for a £10m increase in their line with who I worked for at the time the day before it failed he'd have signed it off.

What's hilarious is he was probably getting paid millions as a top-level trading manager so the original $20,000 mistake he was trying to cover up was not even a week's worth of his salary

"...but consider that you, the viewer, has no idea what selling a future even means." Joke's on you, I watched your video about onion futures!

So when I found a screw up at my workplace for over $100,000 I reported it to my boss and we worked out how to fix it. Nobody goes bankrupt and I didn't get fired. That's got to be a better idea than trying to hide it like nick did.

Destroying the oldest financial institution in England seems so easy!

Plot Twist- He wasnt a bad options trader, he just really hated the bank.

Geeze with the resources he had available he could have played it safe and paid back the account slowly but instead he just kept taking bigger and bigger risks.

Fun fact: the bank was eventually sold to ING, who themselves almost went bankrupt at the start of the financial crisis due to financial mismanagement, and had to be bailed out by the Dutch government.

For those people who commented about the fact that others overlooked this account or didn’t bring it up, in the later stages of the Baring Bank, the company culture was really messed up. Landing a job in the bank was deemed as a golden placement and it meant that you were supposed to be extra smart. Because of this, the culture in the bank became such that if anyone asked a question , irrespective of it’s significance or relevance, that person was ridiculed and looked down upon, even though others in the team might have the same question. It went so far that ( and this is an example) even asking for where the stapler is, was replied with condescension. The person should’ve known where the stapler was. So imagine if nick had spoken out about the 20,000 pound mistake, or if anyone else had spoken out about a ballooning account. ‘How could that person not know?’ Would’ve been the reply and would be left at that. You can read about it in the book: Start With Why.

He’s such a complete hypocrite, too. He’s said in interviews that his superiors were complete idiots for not noticing, as if the whole reason he caused this mess wasn’t that he was so epically bad as a trader Edit: yall I’m not saying he’s a moron, I’m saying he took crazy risks that aren’t at all sustainable in the long run, and even though no one could predict an earthquake his tactics were bound to fail. If you win the lottery, the way to earn more isn’t to spend until you’re in the red and then try to win it again.

Badly audited banks or companies deserve to go to the wall although it's usually the poor employees that suffer the most.

In Korea when you lose a bunch of company money you risk your life in a game of life or death -the total winning sum of which won't even cover all you've lost. In England when you lose a bunch of company money you leave a post it note, participate in a game to make yourself money, and get an episode of HAI written about your deeds.

Anarchist: "DESTROY THE BANK!!!!" Leeson: "okay."

Something you didn’t mention in this video was that Leeson actually briefly paid back the money in full in July 1993. He could have just walked away at that point, everything would have been fine, and no one would have been the wiser. Instead, the experience of getting away with it seems to have fed into some sort of sociopathic Napoleon complex, and within days he started doing more illegal trades because he decided he was so talented he could keep cheating the system to earn more money, which went about as well as you’d expect it to

This whole thing is just a tale of incredible hubris that even the ancient Greeks would have thought was a bit too much.

Great financial explanation in terms everyone can understand!

The description how he was hiding his error account and all the funny excuses he made up at that time and the fact that no one ever checked what was going on would have added to the story. With this super short summary, it became only @Half as Interesting.

"There's absolutely no way this could go tits up" *Turns on tv the next morning* "GUH"

I also broke my bank at the tender age of 6. It was rather pig-like

The expressions "know when to cut your losses" and "don't throw good money after bad" come to mind 🤦‍♂️

Honestly 6 and a half years is a light sentence for losing a billion dollars

This dude would have had a bright career as a finance minister in Greece.

My father spent the 1970s, 80’s and into the 90’s trading futures and commodities in Chicago. I always tried to understand what he did - he just seemed to ‘get it’ and I couldn’t see it at all. I clearly needed a sub sandwich reference to better get it! Ha! My father finally sold his seat on the Chicago Board of Trade and went to work for my mother at her local business. I could tell he liked not having the stress of the trading floor and he stuck to just online trading going forward. I just can’t imagine losing a client’s money, let alone your company’s money or your own. It seems so stressful!

I heard this story on ColdFusion. It's cool to see more channels covering this crazy banker's exploits!

This was not the first time Barings lost all its money, it also did in 1890 but that time the Bank of England organized a bailout.

So how do you manage to destroy 800 million dollars of other people's money and then only go to jail for 4 years. But if you steal a TV anywhere but California you're getting 10. Seriously you steal someone's car, Just GTA not even a carjacking and you're talking a decade. I'm both shocked and appalled to Singaporeans didn't beat this dude to death with a cane on live television for weeks on end.

That explanation of puts, calls, and short straddles was so clarifying I almost understood. Thank goodness I knew not to try to go into finance.

Fun fact: he was listed as one of Singapore's most infamous criminals because he was arrested in Singapore for his deeds in the country

The funny (or sad) part of this story is that instead of being sorry or even admitting his mistake, Leeson kept saying that it was the bank's own fault that they were a bunch of numpties and believed him, instead of checking where the money went. That's some first-rate hutzpah, but he is probably right.

Barings was so ancient and big that it was one of the institutions that helped finance the Louisiana Purchase in 1803!

Hollywood: "damn, this dude deserves a movie" Sam: "eh, not even interesting enough for a main channel video; too much fraud, not enough logistics"

As an old subscriber of your content, I am loving this type of editing and script/joke writing

Close to 2mil! You Deserve it man, Can’t wait.

So to cover a £20,000 loss, you lose £800 million. Sounds brilliant 😂

I wanna know how he lost many millions over _years_ without, like, auditors catching on.

The best explanation of a call option I have ever seen!

I really like your transitions to the ads. Its super smooth. As smooth as the transitions from Linus Tech Tips used to be.

its crazy that if you steal 1.4 billion dollars you get 4 years, but I kill one orphan and I get 20.

The bank was sold to ign for 1 pound. Thats not so bad when you realize that this is around 100 times the price of us supercarriers when sold to scrapping companies.

Love your videos, so interesting you should rename your channel as whole as interesting or always as intersecting or always interesting or something

What's crazy is that there was one time where he actually did make the money back and fixed everything, but instead of calling it quits he kept going.

4 years for a billion dollars seems like an excellent deal

Kinda crazy how you can lose 1.4 billion dollars and only get 4 years in jail then write a book about it to make millions, makes me wonder why more people havent done this

I love learning about random topics from HAI.

I'm glad that singapore not only saw the fall of the British to Japan, but also the fall of the oldest British banks to the literal falling of buildings in Japan.

Fun fact, Nick Leeson managed to weasel his way into becoming chairman of my local club after his effective exile from England, and bankrupted us as well. True story

This is quite honestly one of the most hilariously amazing stories I’ve heard in my entire life XD I mean, holy shit, this is fucking crazy in all the best ways possible lol

This is a good companion piece to Dagogo's (Cold Fusion) coverage of this story.

4:21 Okay I've been playing way too much The World Ends With You because I immediately went 'Oh hey it's scramble crossing!'

Not often do I cheer for the bank instead of the employee.

how tf does over a billion in loses amount to just 6 years. thats insane.

finally a call and put explanation i can understand

Leeson's trades went from Stonks to Stinks very quickly!

I'm guessing Sir Francis is rolling in his grave cause of this dude

I actually do have a vague understanding of what selling a future means 😁

Think this is one of the ones I suggested ahahaha one of the best audit failing stories :)

The Call and Put explanation was nice.

Hey, I know what selling a future is! I saw the "How Global Oil Prices Were Raised $1.50 by a Drunk Trader" video

Didn’t expect to see a video on it considering my actually grandparents knew him, noice

your channel is like those annoying top 10 channels but you are not annoying and actually have interesting videos and funny jokes

Should make a video regarding a certain thing being disabled.

I didn't understand any of that. All those sandwiches made me think of my upcomming lunch time

Great video man !

Bro, you stay roasting me personally in these videos😂😂 .... But you're right, I had no idea what it was.

Great video as always! I am somewhat disappointed that I am forced to watch it on RU-vid because Nebula is not connecting. I really would rather watch your content there so could you see if they might be able to get their servers working better? I love you and Nebula! I'd dislike RU-vid if I could but they removed the button.

I know what a future is I watch your content

I feel so inspired right now

Awesome man!

*Oh the worst trader? Try me 😈*

0:38 Bismarck and a few others were reponsible for the conversion of the Kingdom of Prussia to the German Empire, not Hitler lol. Prussia as a whole was abolished by the Allies after WW2

I need a deeper dive into this

This reminders me of the story of Brian Molony. He was a compulsive gambler who worked for CIBC in Canada. He ended up embezzling millions to feed his gambling habit.

Love the vid, but one thing: The option contract is NOT for a set price AT a set time; Rather, it is for the set price (strike price) UNTIL the set date [expiration date (which is often the third Saturday of the month)]. But, like I said, I love the topic. Great video, brother!

Yeah, about Brilliant and math skills? I don't think having good math skills is *more* likely to bankrupt a bank.

Havent watched this yet, but I want to do this

@0:42 We're in The Snack Zone baybeeeeeee!

He probably would have gotten away with it if he had named the account 88888888.

How do u make such big mistake and still have a good life?

"I CAN FIX THIS" says man desperately shoveling cash into the furnace

Reminds me of a French film called "the Outsider" based on an IRL BNP Paribas guy. During the 2008 crisis, he went opposite marking trends hoping he could outsmart everyone and that his gamble would pay off. Dude was a competent trader, but had no idea how much luck-based his previous wins were and how much he was risking by keeping playing a game where the best move was to cut losses and go report the situation to the higher ups. The tl;dr is, BNP survived the hundreds of millions loss, but sued the trader for all of it though part of the responsibility was allegedly theirs, as he wasn't a completely independent trader and had to follow certain orders.

And 16 years later the remaining major banks drove the US economy into the ground to the tune of an estimated $12.8 trillion. Also Made 23.1 million Americans, or 15% of the public unemployed Cost 9.3 million Americans their health insurance. And 11 million homeowners, almost 1 in 4, were saddled with mortgages higher than the value of their homes. No one went to prison, the failing banks were bailed out with public money (whilst their CEO's continued to draw multi million dollar bonuses) and federal oversight and regulation remained unchanged. Is'nt capitalism great?

Alliteration ftw!

i feel like u explained calls and puts in the most confusing way possible LOL

The old Martingale betting strategy: keep doubling your betting size. What could go wrong?

Anyone who destroys a bank is a hero. Forever.

Only 4 years in prison? Should’ve been longer. If anyone can just go to prison for 4 years and make £800 million, sure they’d all be doing it.

In wsb, this guy would be put on a pedestal love this story

Petition for HAI to introduce any year of time period followed by "It was a good year for greasy white guys" since almost every time period has been pretty good for greasy white guys

The worst trade so far... Citadel is soon to claim the spot with their GME shorts

Its amazing how some people are allowed to fail and it's not held against them

This video is brilliant

Imagine how many times this has happened where the trader covered the loss and no one found out

How is nobody talking about how he essentially got a slap on the wrist for doing all that? Here in the US you get sent to prison for decades for doing a heck of a lot less.