Nick Leeson Barings Bank
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… ......................................................................………… ........ .....4 Barings Bank...............................................................................................................................5 Internal Controls at Barings Bank.............................................................................................13 Lessons Learned and Steps Taken to Preclude Recurrences . ..................................................15 Conclusion ................................................................................................................................18 References.................................................................................................................................20
Page 2 of 21
Commodities Trading: Nick Leeson, Internal Controls and the Collapse of Barings Bank __________________________________________________________________________________________
Introduction Even in an era where “cooking the books” and “Enronised” have entered the vernacular, it seems unbelievable that a global institution with an unimpeachable reputation collapsed into bankruptcy as the result of the ethical improprieties of a single employee, Nicholas (“Nick”) Leeson. Leeson was directly responsible for causing the collapse of Britain's Barings
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… ......................................................................………… ........ .....4 Barings Bank...............................................................................................................................5 Internal Controls at Barings Bank.............................................................................................13 Lessons Learned and Steps Taken to Preclude Recurrences . ..................................................15 Conclusion ................................................................................................................................18 References.................................................................................................................................20
Page 2 of 21
Commodities Trading: Nick Leeson, Internal Controls and the Collapse of Barings Bank __________________________________________________________________________________________
Introduction Even in an era where “cooking the books” and “Enronised” have entered the vernacular, it seems unbelievable that a global institution with an unimpeachable reputation collapsed into bankruptcy as the result of the ethical improprieties of a single employee, Nicholas (“Nick”) Leeson. Leeson was directly responsible for causing the collapse of Britain's Barings
References: Barings Bank. 2004. Wikipedia. Available: http://en.wikipedia.org/wiki/Barings_Bank. Blau, Joel. 1999. Illusions of Prosperity: America 's Working Families in an Age of Economic Insecurity. New York: Oxford University Press. Brennan, T. Corey, Thomas J. Figueira, Julia Heskel, and Rachel Hall Sternberg. 2001. Wisdom from the Ancients: Enduring Business Lessons from Alexander the Great, Julius Caesar, and the Illustrious Leaders of Ancient Greece and Rome. Cambridge, MA: Perseus Books. Broadhurst, Arlene Idol and Grant Ledgerwood. 2000. Environment Ethics and the Corporation. Houndsmills: Macmillan. Costa, John Dalla. 1998. The Ethical Imperative: Why Moral Leadership Is Good Business. Reading, MA: Perseus Books. Earley, P. Christopher. 1997. Face, Harmony, and Social Structure: An Analysis of Organizational Behaviour across Cultures. New York: Oxford University Press. Gapper, John, Nicholas Denton, and Peter Marsh. 1995. The Barings Crisis: Chairman 's Fraud Allegations Challenged. Financial Times, 1 March, 2. Lall, Ashish and Ming-Hua Liu. 1997. Liberalization of Financial and Capital Markets Singapore Is Almost There. Law and Policy in International Business, 28(3), 619-647. Lemke, Tim. 2002. Allfirst Cites Trading Fraud; Says Fired Employee Lost $750 Million in Past Year. The Washington Times, 7 February, C09. "The Lesson from Barings ' Straits." 1995. Business Week, 13 March, 30. Prentice, Robert. 2002. Whither Securities Regulation? Some Behavioural Observations regarding Proposals for Its Future. Duke Law Journal, 51(5), 1397. Page 20 of 21 Commodities Trading: Nick Leeson, Internal Controls and the Collapse of Barings Bank __________________________________________________________________________________________ Reinicke, Wolfgang H. 1998. Public Policy: Governing without Government? Washington, DC: The Brookings Institution. Tait, Nikki. 1995. The Barings Crisis: Failure Is Blamed on Management in London. Financial Times, 6 March, 2. Taylor, Ian. 1999. Crime in Context: A Critical Criminology of Market Societies. Boulder, CO: Westview Press. Page 21 of 21