1803, the newly born United States bought all the funds of Bahrain Bank in southern Louisiana from France. Bank of Bahrain has a strong competitor, Judas House, which runs Ross Seto Bank. The Bahrain government, major companies and many customers are the first choice banks. 1886, Bahrain Bank issued a "Guinness Securities", and buyers rushed to the bank with application forms. Later, I had to stay with the police for an hour. Many people queue up to buy a small amount of stocks and then wait for an opportunity to sell them. Wait until the next day, the stock price doubled. Thanks to the outstanding contribution of Bahrain Bank, the Bahrain family won one after another.
At the beginning of the 20th century, Bahrain Bank was honored to accept a special customer: the British royal family. Five hereditary aristocrats, which can be considered as world records, laid the foundation for the prominent position of Bahrain Bank.
Morrison's work in Bahrain Bank 10 1989. Before that, he was Morgan Adams, but Li worked in the clearing bank department. Baling, he soon fixed his job in Indonesia. Because of his patience, perseverance and good logical reasoning ability, he has solved many problems and can solve them quickly, so the work has been improved. Therefore, Ma Lixun, the head office of the Futures and Options Clearing House in London, regarded him as an expert working in Indonesia and promised to appease him overseas: a corresponding responsibility. 1992, Bahrain headquarters decided to send him to Singapore branch to set up the futures options trading department and serve as the general manager.
No matter what kind of trading, mistakes are inevitable, but the key is to see how you deal with these mistakes, especially in futures, some people will make "buy" and "sell" gestures by mistake; Some people will buy contracts with the wrong price, some people may not be cautious enough, and some people may buy March futures, futures and so on. Once a mistake is made, it will bring losses to the bank. Banks must deal with these mistakes quickly and properly. If the error cannot be recovered, the only feasible way is to consider calling the error on the computer "wrong account" and then reporting it to the bank headquarters.
1992, the account of any futures trader in Singapore was originally "99905", and "wrong account" was specially used to deal with negligence mistakes in the trading process. This is a wrong account in the process of a normal financial system. 1in the summer of 992, the London headquarters was fully responsible for Gordon's liquidation. Bao Sai called Ma Lixun, and Leeson set up a "mistake account" to record small mistakes and treat himself in Singapore so as not to disturb his work in London. Lisa Marie has hired a special office to settle accounts, so can you set up a document and ask her? Soon, the prophet Li typed several commands on the computer and asked him what account he needed. In China culture, "8" is a very lucky number. As his lucky number, Li Sen's account number must be five digits, accounting for 88,888 "wrong accounts", thus being born.
A few weeks later, the London headquarters called and asked the Singapore branch to configure a new computer at the headquarters according to the old rules. All the error records were kept in the "99905" account and reported directly to London. The "88888" wrong account has just been created idle, but it has become a real "wrong account" stored in the computer. The Singapore branch headquarters has noticed many mistakes, but Morrison cleverly avoided them. The neglected account "88888" provides Allison with an opportunity to make false accounts for the future, and then cancel the account, and Bahrain's history may be rewritten.
17, 1992 Lisenman Bahrain trader Wang Jin made a mistake this week: when the customer (Fuji Bank) bought the Nikkei futures contract on the 20th, the trader mistakenly sold it at 20, and Lisenman worked at night during liquidation. The mistake is that Leeson found that I had to correct this mistake, and I could buy 40 contracts with a closing price of 20,000. But for various reasons, I decided to use the wrong account. However, "88888" only covers up its mistakes through a 40-day futures contract. In this way, the transaction conducted by Lisson becomes the owner's transaction ",which is the part of the account facing the risk of Bahrain Bank. A few days later, the Nikkei index rose by 200 points, and the bears lost 20,000 to 60,000 pounds (note: Morrison's annual salary is less than 50,000 pounds). Allison didn't even dare to escalate this mistake.
Another mistake of the same nature is George, Morrison's friend and the executor of the Committee. George and his wife divorced, immersed in pain all day and began to give up on themselves. Allison likes him because George is his best friend, but he is also one of the best traders. But soon George began to have problems. Morrison said that he sold 65,438+000 September futures and bought shares worth 8 million pounds, and several trading certificates were not filled in.
If George's mistake is exposed, Morrison will have to bid farewell to her already satisfied life. George made several mistakes. Recording "88888 account" Allison is a task. However, there are at least three problems that bother him: first, how to make up for these mistakes and how to escape after recharging the "88888" account by mistake. At the end of the internal audit of the London headquarters, SIMEX asked for extra deposit every day, and they calculated that the Singapore branch lost daily income. You can also display "88888" on the big screen of SIMEX.
In order to make up for employees' mistakes, Li Sen earned a commission, but, of course, the premise is that these mistakes will not suffer too much, because they are not too many, but George has really made too many mistakes.
In order to earn enough money to make up for all the losses, Allison took on more risks. He made a lot of floor trading, because Nikkei stabilized the option money Allison earned from trading. If luck changes greatly, in Nikkei, this transaction will make Bahrain suffer huge losses. For a period of time, Allison did very well. 1July, 1993, his "88888" account has been losing 6 million pounds, and when there is a slight surplus, his annual salary is close to100000 pounds. Allison, that's it, and then Bahrain's history will change.
Besides the wrong businessman covering up another serious mistake to win the biggest customer of the Nikkei market, Bonifay. At the end of 1993, the market price soared every day for several days. On the computer screen of frequently broken liquidation records, the work of countless banker accounts accumulated more than 1000 points. Because the system can't work normally, through the transaction records of human resources. By the time you find all kinds of mistakes, Allison has lost, and it has reached nearly $65,438 +0.7 million. In the case of no choice, Morrison decided to continue to hide these mistakes.
1994, Li Sen, the loss amount is numb. Account 88888 lost 2.03 billion pounds, reaching 50 million pounds in July. In fact, Morrison guides many transactions through market trends, not because he expects the market. He has become a puppet, but his risk position has been manipulated. He thinks, what kind of market changed direction, so that he won the game to make up for the loss of account number 88888, and they tried to influence the market to move in this direction.
Alison's autobiography: "I'm ashamed of being a liar-at first I made a small mistake, but now it's beside me, just like cancer, just like my mother." This is definitely not the way I grew up. "
From a systematic point of view, the most fundamental problem lies in the confusion of trading and settlement roles in Bahrain. After working in Singapore from 65438 to 0992, Lisong worked in Bahrain, Singapore Futures Exchange and clearing management successively. As a businessman, Li Sen may have been engaged in derivatives and arbitrage trading on behalf of Bahrain's customers, all of whom are engaged in trading in Bahrain with little risk. In the valet operation, the trader who bears the risk by the customer only earns the difference between the commission arbitrage problems and the market price. For example, in a very short period of time,-Li profited from the selling markets in Bahrain and Singapore at different prices. A general license for a bank trader to hold a certain number of risky positions. However, in order to prevent traders from being exposed to excessive risks of banks, such as subsidies, it is usually quite limited. The daily settlement bank traders and risk positions of the clearing department can also be effectively understood and mastered. Unfortunately, Morrison is a person who trades and clears two positions at the same time.
In fact, a week ago, Morrison arrived in Singapore and had internal communication in Bahrain, expressing her concern about the major disaster that this issue might cause. However, it is neglected that Allison reports responsibility while working part-time in the trading and settlement department. If Morrison is only in charge of the clearing department, because he will be given the responsibility, he has no need or opportunity to hide the mistakes of other traders' actions, which will not lead to the final situation getting out of control.
The headquarters of Bahrain Bank sent someone to investigate Morrison's loss of 500,000 pounds. In fact, every day, on the balance sheet, there is a remarkable record every day to check Allison's problems. Even at the end of the month, Leeson made false accounts to cover up the problem, which is easy to find out-if Bahrain is really strict in censorship. Alison forged a deposit of 50 million pounds in Citibank, but 500,000 people were transferred to account number 88888 to compensate for the loss. Check the month of the account, but no one came to check Citibank's account, so no one has Citibank's account and deposit of 50 million pounds.
Balance Sheet, Chairman Peter Bahrain Bahrain Bank passed the work that the balance sheet did not do during the review period in March 1994, because its composition can change significantly in a short time. Peter Bahrain said: "It would be naive to disclose more balance sheet data and increase our understanding of a group." Chairman Bahrain, who pays little attention to the balance sheet, really didn't imagine it.
65438+1October 1 1, 1995, the letter from the Audit and Taxation Department of Bahrain of Singapore Futures Exchange raised some questions, and their funds needed to keep the account number of 88888. At this time, Morrison asked London to import more than 65.438 billion pounds a day to pay the extra deposit. In fact, from 1993 to 1994, the investment of Bahrain Bank in SIMEX and Japan market exceeded 165438+ million pounds, which exceeded the limit set by British overseas banks and should not exceed 25% of the Bank of England. To this end, the Bank of England in Bahrain held several meetings. 1in may, 1994, the bank of England, a senior official, was responsible for the supervision of commercial banks, but this acquiescence "acquiescence" did not leave any documents, and no relevant department handed it over to the bank of England, and the highest person was responsible, which violated the internal regulations of the bank of England.
The most incredible thing is that 1994 had a balance sheet of 500,000 pounds at the end of 1994, and Bahrain had not realized the looseness and negligence of its internal control. It is found that Bahrain's senior employees have the same problem two months after its bankruptcy, so it is necessary to pay attention to the more formal investigation by the Audit Department of Bahrain headquarters. Sen used to be easily deceived in these investigations. The Li Sen period was described as: "There is no 1 to stop it, which I think is incredible. London should know that my number is fake. These people should know that it is wrong for me to ask the London headquarters for cash every day, but they still paid the money. "
From a moral point of view, if the above-mentioned financial professionals are rated as "Bahrain incident", they should be given a failing grade. In particular, many senior managers in Bahrain blindly believe Morrison and expect him to arbitrage funds for Bahrain without leaving their names at the bottom. Ironically, in the first two months of Bahrain's bankruptcy, 1994 and 14 February, the results of the financial conference held in Bahrain, new york attracted 250 Bahraini bankers all over the world, and Lisson was a hero in Bahrain. The newspaper gave a long and warm applause.
18, 1995 Kobe earthquake in Japan. In the following days, Tokyo's Nikkei index fell sharply. On the one hand, Alison lost a lot, on the other hand, she bought more Nikkei futures contracts, and the Nikkei index rose within the ideal price range. 65438+10.30, Leeson made a profit of/kloc-0.0 million pounds, and obtained funds from London to buy 30,000 Japanese government bonds every day, and sold them short through index futures. On February 10, Allison's trading record on the Singapore Futures Exchange was 55,000. The more Japanese government bond contracts are traded, the greater the losses.
All these transactions are included in the 88888 account, and the transaction scope and single inventory of the account are temporarily withheld, but the required funds are additionally guaranteed, but they cannot be hidden. Alison used all kinds of excuses to transfer. This looseness is unbelievable. In mid-February, the share capital of Bahrain Bank was 470 million pounds.
On February 23rd, 1995, the last day of Bahrain futures, Li Sen's efforts affected the complete failure of the market. The Nikkei stock closed at 17885, which has reached the risk position of more than 60,000 hands of Nikkei index futures. The price of Japanese government bonds soared, and its short-term risk position reached 26,000 lots. The loss caused by Leeson was Bahrain, and the executives in Bahrain still dreamed of paying dividends the next day, and finally reached a high of 860 million pounds, which led to the fate of the oldest Bahrain bank in the world.
In the report issued by Bank of Bahrain 1995 10 10/7, Mo Li Xun expressed his regret over this exciting but best Bahrain incident. The report concludes that "Bahrain Group took timely action in February 1995, and they may have avoided collapse. In the end, 1995, 1, even though there was a great loss, after all, only 1/4 of the finals was lost. If Bahrain knew nothing about the management of the "88888" account until it went bankrupt, we can only say that they had fled.
Morrison said: "A group of people should have exposed and stopped my trick, but they didn't. I don't know what is the boundary between their negligence and criminal negligence. I don't know if they bear any responsibility, but if it is in any other bank, I won't have the opportunity to start this crime. "
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The case itself is the best example.