A few weeks later, the London headquarters called again. The headquarters was equipped with a new computer and asked the Singapore branch to follow the old rules. All error records were still reported directly to London from the "99905" account. The "88888" wrong account was shelved as soon as it was established, but it became a real "wrong account" and was stored in the computer. Moreover, the headquarters had noticed that Singapore Branch had many mistakes at this time, but Allison cleverly avoided them. The neglected account number "88888" provided Li Sen with the opportunity to make false accounts in the future. If this account had been cancelled, Bahrain's history might have been rewritten.

1July 992 17, Wang Jin, a trader of Lissen, made a mistake after only staying in Bahrain for one week: when the customer (Fuji Bank) asked to buy 20 Nikkei futures contracts, the trader mistakenly sold 20 contracts, which was discovered in Lissen's liquidation work that night. To correct this mistake, 40 contracts need to be repurchased, which means a loss of 20 thousand pounds from the closing price of the day. And report to the London headquarters. However, under various considerations, Allison decided to use the wrong account "88888" to undertake 40 short contracts of Nikkei index futures to cover up this mistake. But in this way, Ellison's transaction became an "owner's transaction", which exposed the risk position of Bahrain Bank under this account. A few days later, because the Nikkei index rose by 200 points, the loss of this short position increased from 20,000 pounds to 60,000 pounds (note: the annual salary was less than 50,000 pounds at that time). At this time, Allison did not even dare to report this mistake to her superiors.

Another mistake exactly like this was made by George, Allison's good friend and executor. George and his wife divorced, immersed in pain all day and began to give up on themselves. Alison likes him because George is his best friend and one of the best traders. But soon George began to make mistakes. Allison indicated that he bought all the 65,438+000 September futures he sold, with a value as high as 8 million pounds, and the vouchers for several transactions were not filled in at all.

If George's mistake gets out, Alison will have to bid farewell to her already satisfied life. Alison can easily record George's mistakes in the "88888 account". But at least three problems bothered him: first, how to make up for these mistakes; Second, how to avoid the internal audit of the London headquarters at the end of the month after the "88888" account was wrongly recorded; Thirdly, SIMEX requires them to add margin every day, and they will calculate how much the Singapore branch loses every day. The "88888" account can also be displayed on the SIMEX big screen. In order to make up for employees' mistakes, Ellison transferred the commission he earned to his own account, provided that these mistakes could not be too big and the amount of losses caused could not be too big, but George's mistakes were really too big. In order to earn enough money to compensate for all the losses, Alison took more and more risks. At that time, he was trading a large number of cross positions, because the Nikkei index was stable at that time, and Allison earned an option premium from this transaction. If you are unlucky and the Nikkei index changes greatly, this transaction will make Bahrain suffer heavy losses. Alison did well for a while. By July 1993, he had turned the loss of 6 million pounds in the "88888" account into a slight surplus. At that time, his annual salary was 50,000 pounds, and the year-end award was nearly 654.38+10,000 pounds. If Leeson stops here, the history of Bahrain will also change.

In addition to covering up the mistakes for traders, another serious mistake is to win over Bonifay, the biggest customer of the Nikkei market. In the late period of 1993, the market price soared by more than 1000 points every day for several days, and the computer screen used for settlement records frequently broke down, and the cumulative number of transactions was unclear. Because the system can't work normally, the transaction record depends entirely on manpower. When all kinds of mistakes were discovered, Leeson's loss had reached nearly $65,438 +0.7 million in one day. In the case of no choice, Alison decided to continue to hide these mistakes.

Alison's autobiography describes: "I am ashamed of being such a liar-it was a small mistake at first, but now it has surrounded me like cancer ... my mother certainly doesn't want to raise me like this."

From the institutional point of view, the most fundamental problem in Bahrain lies in the confusion of trading and liquidation roles. 1992 After going to Singapore, Lisen worked as the manager of the futures trading department and the clearing department in Bahrain and Singapore. As a trader, Allison should have bought and sold derivatives on behalf of Bahrain's customers and engaged in arbitrage for Bahrain. Basically there is not much risk. Because of the agent operation, the risk is borne by the customer himself, the trader only earns commission, and the arbitrage only earns the price difference between the markets. For example, Leeson took advantage of the different prices in Singapore and Dagu market in a short period of time to make profits for Bahrain. General banks allow their traders to hold a certain number of risk positions. However, in order to prevent traders from being exposed to excessive risks in their banks, such permission is usually set quite limited. Through the daily settlement work of the clearing department, banks can also effectively understand and master the situation of their traders and risk positions. Unfortunately, however, Ellison is responsible for both trading and liquidation.

A week before Leeson arrived in Singapore, there was a communication inside Bahrain, which triggered concerns about the possible catastrophe caused by this issue. But this concern was ignored, so that after Allison took office, she still worked in the trading and clearing department. If Allison is only in charge of the clearing department, as the example should have been, then he has no need or opportunity to cover up the mistakes of other traders, and it will not lead to an uncontrollable situation in the end.

When the loss reached 50 million pounds, the Bank of Bahrain sent someone to investigate Leeson's account. There is a balance sheet every day and there are obvious records every day. It can be seen that Allison's problems, even the false accounts made by Allison at the end of the month to cover up the problems, are easy to be found-if Bahrain really has a strict censorship system. Alison pretends that Citibank has a deposit of 50 million pounds, but this 50 million pounds has been used to make up for the loss of account No.88888. After checking the account for a month, no one checked Citibank's account, so that no one found that there was no deposit of 50 million pounds in Citibank's account.

Regarding the balance sheet, Peter Bahrain, chairman of the Bank of Bahrain, commented in March 1994 that the balance sheet is useless because its composition may undergo major changes in a short time. Therefore, Peter Bahrain said: "It is really naive to think that disclosing more balance sheet data can increase the understanding of a group." No one can imagine the high price paid by Bahrain's chairman who doesn't pay attention to the balance sheet!