(7 of 8)
Despite this conclusion, Anthony Hawes, acting as a troubleshooter for the Barings inner circle in London, flew to Singapore on Feb. 8 to talk to Leeson and his team. On Monday, Feb. 20, Leeson's regional supervisors in Tokyo asked him to reduce the company's holdings of the Nikkei contracts. "It's almost getting to be a problem," a Barings top manager explained to a friend. No one yet suspected the crisis awaiting the company in account No. 88888. By the time internal auditors did suspect, the amount of credit extended to cover those positions had exceeded the bank's capital.
THE EVIDENCE SUGGESTS THAT LEESON began preparing for the end soon after Hawes arrived in Singapore. On Feb. 15, Leeson's wife Lisa called the Four Winds moving company. Diana Massimiani, Four Winds' assistant manager in Singapore told Time that the Leesons wanted to move their belongings to Kent in southeast England. "She told me she would need storage as they were going away and didn't know when they would reach Kent." Even before that, Leeson had sold his black Rover sports car and was reportedly leasing a white Mercedes. By Friday, Feb. 24, Nick and Lisa Leeson would be on the run. A woman then called Four Winds and said the Leesons had already left on their vacation. Could the movers come by a little earlier?
At about the same time, Peter Baring, chairman of the bank, reportedly received a faxed letter from Leeson. According to the Independent, the trader apologized, provided a detailed account of his dealings and said "he doubted the two would ever meet again." When a weekend attempt by the Bank of England to round up a rescuer failed, Baring hinted that a conspiracy had led to the collapse of the institution his family established 232 years ago. But, says Emma Davey, managing editor of Futures and Options World: "Baring didn't have a clue what this is all about. There is a major cultural gap between the old school and the people who are doing the trading for them.''
Indeed, Britain's sedate financial sector was deregulated in the 1980s-and suddenly the aggressive Americans and Japanese came crashing in with giant salaries garnished with even more gigantic bonuses for star traders. Young, ambitious people like Leeson were swept up in the scavenger hunt for talent, and Barings was for the first time managing a new kind of moneyspinner. "Traders were made overnight," says Valerie Thompson, who traded securities for Solomon Brothers in London for 15 years and watched the change. "Managers did not have time to train them properly. Leeson picked up a little bit of knowledge and used it as a springboard into Barings. He must have thought, 'This is easy. This is Christmas come early. I can do anything.'"
Thompson believes the inexperience and hubris of youth may have been his undoing. "He may have known his stuff, but he had no experience with the critical bit: when to cut your losses. He never went through a bear market. He was lacking that bit in the learning curve when you say, 'I've made a mistake. I've got to get out of here.' He didn't have the courage-or the experience-to go to the boss and admit failure and ask how to get out of it." She adds: "These kids are just learning to walk, and suddenly they are put in charge of too much. They are still in nappies. They don't know what they don't know."