Nick Leeson, a "genius trader" in the international financial community, was the general manager and chief trader of Bahrain Futures Company of Bahrain Bank. Known for its steadiness and boldness. In the Nikkei 225 futures contract market, he is called "invincible Li Sen".
1994 in the second half of the year, Li Sen thought that the Japanese economy began to walk out of recession and the stock market would have an upward trend. So I bought a lot of Nikkei 225 futures contracts and call options. However, "people are not as good as the sky", which backfires. On June 65, 438+0, 995, 65, 438+0.6, the Kansai earthquake, the stock market plummeted, and Li Sen bulls suffered heavy losses, with losses as high as 2,654.38+0,000 pounds.
Although the situation is bad at this time, it is not enough to shake Bahrain's central bank. Only for Mr. Li Sen, this has seriously affected his glorious position. With his genius experience, Li Sen once again made a large number of positions in the Nikkei 225 futures contract and interest rate futures contract, and the total position has reached more than100000 lots.
You should know that this is a futures contract that has been amplified by the "leverage effect" for dozens of times. When the Nikkei 225 index fell below 18500, Li Sen's position would lose more than $2 million every time it fell.
"Things tend to develop in the worst direction", which is the summary of the theory of the strong.
On February 24th, when the Nikkei plunged again, the position loss of Li Sen Bahrain Futures Company was close to the sum of the capital and reserves of its entire Bahrain Bank Group. Without financing channels, the loss cannot be recovered. Li Sen ran away for fear of committing a crime.
Bahrain Bank is facing the disaster of bankruptcy, and the chairman of the bank has to turn to the Bank of England for help, hoping to save the situation. But at this time, the loss has reached $6,543.8 +0.4 billion, and the loss will further expand as the Nikkei 225 index continues to fall. Therefore, no one in all financial institutions dared to reach out to save the former VIP Bahrain, and Bahrain Bank closed down.
There are various complicated reasons why a staff member can destroy an established bank in a short time. Among them, the key to this "miracle" lies in improperly using the "leverage effect" of futures and treating futures by gambling.
Although Li Sen, who finally escaped, was caught soon, if we can't grasp the key of futures risk control, more "Bahrain events" will occur, including small "Bahrain events" among our individual investors. After the incident, the main responsible person, Nick Leeson, escaped.
Li Sen is the president of Bahrain Bank Singapore Branch. He is only 28 years old. Without authorization, he subscribed for Japanese stock index futures with a total price of $7 billion in the name of the bank, and bought short-term interest rate bonds worth $20 billion in the Japanese futures market by short selling. If these transactions are successful, Leeson will make huge profits from them, but the Japanese bond market has been falling since the Hanshin earthquake. According to incomplete statistics, Bahrain Bank lost more than $654.38+0 billion, which has exceeded the total value of the bank's existing $860 million, so Bahrain Bank had to declare bankruptcy. This 233-year-old bank, which played an important role in Britain, has a new owner. On March 2, the police arrested Li Sen.
Former CEO tells the mystery of the collapse of Bahrain Bank in Britain.
1995, Bahrain Bank, one of the oldest banks in the world, went bankrupt. It was once the most trusted financial institution of British aristocrats. With an excellent business history of more than 200 years, it failed to escape the end of bankruptcy and shocked the world.
In order to uncover the mystery of this incident, the special program Capital Market of CCTV's Economic Half-hour finally interviewed Peter Norris, the famous CEO of Bahrain Investment Bank.
On the outskirts of London, we met Peter Norris, CEO of Bahrain Investment Bank, in a small cinema that can only accommodate about 150 people. After his resignation, Peter Norris is now the owner of this small cinema. Peter Norris said: "Bahrain Group has many different banks. I happened to be the CEO of an investment bank when Bahrain Group went bankrupt. Li Sen's crime happened in the investment bank I led. Did Li Sen destroy Bahrain Bank? Of course it is. It was his crime that led to the collapse of Bahrain Bank. He cheated for a long time and tampered with the computer accounting system. Many employees were involved, which eventually led to the bankruptcy of Bahrain Bank. "
Shockingly, the painful ending of Bahrain Bank came from an ordinary securities trader Nick Leeson. Nick Leeson joined Bahrain Bank on 1989 and was sent to Singapore on 1992 as the general manager of Bahrain Bank Singapore Futures Company. It was in Singapore that Nick Leeson brought down Bahrain Bank.
Futures traders will inevitably make some mistakes in trading. So they usually open a special account to temporarily store those wrong transactions and wait for the right market to recover the losses. However, the wrong account was changed in the hands of Nick Leeson, in which he recorded his failed transaction to cover up the loss. As a result, in order to earn back the lost money, Nick Leeson's gambling money is getting bigger and bigger, so that it is out of control.
1On the evening of February 23rd, 995, Nick Leeson, who lost all his money in Bahrain Bank, embarked on a journey of escape. However, the frightened escape lasted only four days. 1On February 27th, 995, Nick Leeson, who had just stepped off the plane ramp, was captured.
1On October 22nd, Nick Leeson once again became the focus of global news. He was extradited from Germany to Singapore, and only a week later, he was tried. According to the Singapore Securities Exchange Act, Nick Leeson was sentenced to six and a half years' imprisonment for fraud. So he became a prisoner in Tanamera prison in Singapore.
Nick Leeson made Bahrain Bank suffer a huge loss of 860 million pounds by deception, thus pushing Bahrain Bank to the road of death. The Nick Leeson incident was not accidental. In the history of the development of the capital market, large investors infringe on the interests of small investors, intermediaries harm the interests of customers, and listed companies cheat shareholders from time to time. Therefore, the market needs a series of strict legal constraints and a strong supervision system. As Nick Leeson's immediate superior, one can imagine Peter Norris's feelings after his resignation. For a long time after the bankruptcy of Bahrain Bank, Peter Norris was miserable. He hated Nick Leeson. But after all, five years have passed, and now he seems to be much calmer in the face of visitors.
1in July, 999, Nick Leeson was paroled for cancer, and he returned to London. Previously, in prison, he wrote "How did I bring down Bahrain Bank". In the book, Nick Leeson described the real situation of the whole event. Of course, Li Sen has the feeling of Li Sen, but I'm afraid this Peter Norris is the person Bheenick Li Sen feels more deeply. Peter Norris said: "I think we can learn a lot from it." The most basic thing is not to assume that all employees are honest and upright. This is the tragedy of human nature. For many years, Bahrain Bank has always believed that the employees it employs are trustworthy, believed in the corporate culture of Bahrain Bank, and always kept the interests of the company in mind. In the case of Li Sen, we found that he was dishonest during his tenure at Bahrain Bank. The management of all financial institutions should learn from the Li Sen incident and realize the risks of employing people. There are many deficiencies in the internal management mechanism of Bahrain Bank. Li Sen's criminal behavior was not discovered in time, but it was too late. Therefore, I think the lesson is that we should always be highly vigilant. "
Although a joint investigation by the courts in Singapore and Britain shows that the Bahrain incident was entirely committed by Nick Leeson, the management of Bahrain Bank has no legal responsibility. However, Peter Norris still believes that the bankruptcy of Bahrain Bank is closely related to the chaos of its internal management.
Nick Leeson's book "How I Made Bahrain Bank Collapse" completed in prison was quickly made into a movie. 1999 The film was shown for the first time in a small cinema run by Peter Norris. Suddenly, his projectionist came and told Peter that a man who looked like Nick Leeson was sitting in the cinema. When the film ended, Mr Peter Norris clearly saw that it was Nick Leeson himself.
One is the former CEO of Bahrain Investment Bank, and the other is the initiator of bringing down the bank. After the collapse of Bahrain Bank, the two met for the first time in this cinema where I don't know how many tragedies and comedies of life were staged.
After all, Peter Norris can still get his own income from the cinema. However, Nick Leeson is very different. All the copyright income that should have belonged to Nick Leeson will be used to repay the debts of the creditors of Bahrain Bank.