Nick Leeson Barings Bank

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Commodities Trading: Nick Leeson, Internal Controls and the Collapse of Barings Bank __________________________________________________________________________________________ Commodities Trading: Nick Leeson, Internal Controls and the Collapse of Barings Bank By Sam Bhugaloo Page 1 of 21 Commodities Trading: Nick Leeson, Internal Controls and the Collapse of Barings Bank __________________________________________________________________________________________ Table of Content Introduction.................................................................................................................................3 Background and Overview… ......................................................................……………show more content…
“Leeson lost $1.4 billion and bankrupted his employer, Barings P.L.C., a British investment firm that was 233 years old.” 4 Barings Bank Founded in 1762, Barings Bank (previously known as Baring Brothers & Co.) was the oldest merchant banking company in England. Barings collapsed on February 26, 1995 as the result of the activities of one of its traders, Nick Leeson, who lost $1.4 billion by investing in the Singapore International Monetary Exchange (SIMEX) with primarily derivative securities. This was actually the second time the bank had been faced with bankruptcy. 5 Following the collapse, Barings was purchased by the Dutch bank/insurance company ING (for the nominal 3 4 Ibid. Business Week, "The Lesson from Barings' Straits," March 13, 1995, 30. 5 The first being in 1890 when a significant amount of investment was lost in South America following the Argentinean revolution; however, at that time, they had been bailed out by the Bank of England and other London banks. In Barings Bank, 2004, 1. Page 5 of 21 Commodities Trading: Nick Leeson, Internal Controls and the Collapse of Barings Bank __________________________________________________________________________________________ sum of one pound) and today no longer exists as a corporate entity; however, the Baring

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