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WHAT DID THE PRESIDENT KNOW, AND WHEN DID HE know it? That famous line of inquiry from the Watergate prosecution that resulted in the resignation of President Richard Nixon bubbled up anew after Britain's venerable Barings Bank collapsed in February: What did senior bank officials know of the dealings of rogue trader Nick Leeson, and when did they know it? Answers to those questions would determine whether the bank, like Nixon, had been party to a cover-up.

In its report issued this July, the Bank of England sifted the evidence and basically concluded that the young Singapore-based futures trader had acted alone, pulling the wool over his superiors' eyes until it was too late to save the bank. But now comes a report from Singapore investigators charging not only that Barings was negligent in its operations, but also that at least some of Leeson's bosses knew or suspected something was badly wrong before the sky fell in.

While not using the words cover-up or conspiracy, the 183-page report argues that about a month before Barings collapsed under debts totaling $1.24 billion, both Peter Norris, former chief executive officer of Barings Investment Bank, and James Bax, former managing director of Barings' Singapore unit, deliberately hindered investigations into irregularities in Leeson's accounts. Bax and Norris deny the charges. But, the report concludes, "we are unable to accept their denials."

At issue was a ruse whereby Leeson reconciled his year-end accounts in 1994. Both the London and Singapore reports agree that Leeson fabricated a $79 million credit from Spear, Leeds & Kellogg, a New York City-based securities trader, to offset his losses. When Barings' external auditors questioned the entry, Leeson forged faxes from Spear, Leeds & Kellogg, Citibank and one of his superiors in London to show that the money had indeed been paid to Barings. The auditors accepted Leeson's explanation although they failed to notice the words "from Nick and Lisa" printed on the top of one of the documents indicating that it had been sent from Leeson's home fax machine and not from the New York offices of Spear, Leeds & Kellogg. Singapore authorities claim that Norris and Bax blocked further investigation into the confusion over the $79 million discrepancy. Also, the report alleges, Norris delayed bringing the matter to the attention of a group of high-level executives set up to monitor risky transactions.

The Singapore report concludes that the actions of these two executives indicate that they knew there was a problem. Moreover, the report continues, by impeding scrutiny of Leeson's futures operations in Singapore, Bax and Norris prevented his illicit trading from being discovered early enough to save the bank.

Does this add up to a conspiracy on the part of the two top bank officials to conceal Barings' mounting losses? Some of those who worked with Leeson and Norris, as well as British authorities, are unconvinced. While prepared to concede gross incompetence on the part of senior Barings management, they find it difficult to believe Bax and Norris could have known about or suspected the magnitude of Leeson's swindle and remained quiet.

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