The human lesson of Nick Leeson's fraud
Ten years ago today, Nick Leeson had lost ￡170m of his employer, Barings', money and was about to launch a trading frenzy on the Singapore futures exchange in a doomed effort to dig himself out of the hole. Ten days later, he had absconded and Barings had collapsed under ￡860m of losses.
These days, Mr Leeson (having served his time in Changi jail and recovered from cancer, he deserves his “Mr” back) makes a living from after-dinner speaking and sidelines such as playing online poker with anybody who wants to challenge a notoriously bad gambler. Despite the fact that he ruined the charitable foundation that owned Barings, he remains unabashed.
The affair is close to my heart, since I co-wrote a (sadly now out-of-print) book about it. So what are the lessons a decade on? When people talk about lessons from such events, they usually mean ways to stop them recurring. The other day, Barings' collapse was cited when the Bank of England said it would hire more staff to watch out for threats to financial stability.
Would that it were that simple. No matter how good the systems a bank has in place to prevent its traders going off the rails (and Barings' controls, starting from Mr Leeson's dual role as trader and back-office manager, were notably bad), traders will always make losses and try to gamble their way out. And banks, let alone regulators, will always struggle to uncover determined fraud.
No, the lesson I take from Barings is more human about how to cope when disaster strikes, as it occasionally will. Most people who run banks, even if they acknowledge the theoretical possibility, do not think it will happen to them. They cannot believe they would make such juvenile errors in believing a rogue trader's lies.
Indeed, the general view at the time was that either Barings' executives must have been in league with Mr Leeson, or were so incompetent that they were as much to blame as him. Naturally enough, Mr Leeson tried to encourage the view that he was the unwitting victim of a set of blue-blooded bankers who pushed him into making dishonest profits in order to increase their bonuses.
But a decade is long enough for evidence to emerge of malfeasance on the part of others and it has not. Nor was Barings entirely staffed with upper-class fools who fiddled as Mr Leeson burned their bank. There were gaps in controls and some people were not up to their jobs. But there were also talented and bright individuals who simply did not realise what was happening until too late.
They paid a terrible price. One of those involved compared it to being in a car crash and it is a good metaphor (even if they were driving carelessly). One minute, they were all speeding along in the fast lane, with plenty of prestige, power and money. The next, they were in trauma, with newspapers declaring their certain idiocy and possible criminality.
The first instinct of some of them was to deny they were to blame. Since Mr Leeson was supposed to report to people in London and Singapore for his various responsibilities one reason he evaded detection for so long they argued that others were at fault. I recall a heated but ultimately
pointless debate over whether Mr Leeson had really been a trader or a broker.
Then there was what has become known in US corporate trials as the “30,000-feet defence” that those at the top could not have been expected to know what was going on. Bernie Ebbers, WorldCom's former chief executive, is using this gambit, which was deployed successfully in terms of avoiding punishment by Peter Baring, the bank's chairman and Andrew Tuckey, its deputy chairman.
There are two problems with this. The first is hypocrisy. When companies do well, not many executives go around arguing that they have nothing to do with the achievements of people at the bottom of the organisation and do not deserve the prestige and financial reward that come from managing them. Taking responsibility when things go wrong comes with the territory.
The second problem is psychological. When somebody is involved in a public debacle such as Barings, or the corporate scandals in the US and Europe after the 1990s, the public is unlikely to believe he is blameless. It is easier on the psyche to admit to yourself that you messed up. Otherwise, you will be doomed to keep droning on about all the mitigating factors to sceptical listeners.
That was painfully true of the nine Barings executives who were found guilty of misconduct by regulators and one or two who escaped. Those who suffered most seemed to me the ones who denied blame. Appeals dragged on for years, marriages collapsed, people became embittered and dispirited. They never quite removed the albatross from around their necks.
Others were more dispassionate. The exemplar was Peter Norris, Barings' chief executive, who was put under the greatest scrutiny of all. He admitted from the start that it was his responsibility and did not appeal against being banned from working in the City or struck off as a company director. As a result, he was among the quickest to recover.
People say Mr Norris was arrogant before the collapse, but I found him personable afterwards. Perhaps, in the end, it was good for him. Anyway, he proved a wider truth. Disaster is always prone to strike in investment banking, and there will be future examples of executives who suddenly lose power, money and lofty status. It will be up to them whether their lives get ruined as well.
从巴林灾难中爬起
十年前，尼克?利森(Nick Leeson)在令其雇主巴林银行(Barings)亏掉1.7亿英镑以后，正要在新加坡期货交易所展开一场疯狂的交易，以求扳回局面，但这是一番注定要失败的努力。10天后，他畏罪潜逃，巴林银行则因亏损8.6亿英镑倒闭。
如今，利森先生(他已从新加坡樟宜监狱刑满释放，并从癌症中康复过来，理应赢回“先生”的称呼)靠宴会演讲和一些副业谋生，包括在网上与任何想挑战他这位出名赌棍打扑克。尽管他曾把拥有巴林银行的慈善基金会搞破产，但他毫无羞愧之意。
我对此事相当关心，因为我曾以此为主题，与他人合写了一本书(不幸的是该书现已绝版)。那么，10年过去了，人们从中吸取了什么教训呢？当人们谈论此类事件的教训时，他们通常是指如何设法防止这些事重演。前些日子，英格兰银行(Bank of England)表示将雇用更多人员，以监控对金融稳定构成威胁的各种因素，当时该银行就援引巴林银行倒闭一事。
要是真那么简单就好了。无论一家银行把制度安排得多么妥善，以求防范其交易员出轨，但交易员们总会亏钱，然后会设法豪赌一场以解救自己(从利森先生担任交易员和后台办公室经理的双重角色来看，巴林银行的控制体系显然非常糟糕)。而且，银行总是难以发现那些处心积虑的蓄意欺诈，监管部门就更别提了。
相反，我从巴林银行事件得出的教训更贴近人性层面，即当灾难袭来时如何应付，因为灾难总是会不时发生的。多数银行经营者认为，灾难不会降临到他们头上，即便他们承认在理论上有这种可能性。他们不相信自己会犯如此低级的错误，去相信一名违规交易员的谎言。
实际上，当初人们普遍认为，巴林银行的高管们要么肯定与利森先生相勾结，要么很不称职，因而与利森先生一样该受责难。很自然，利森先生设法怂恿人们产生这样的看法，即他无意中成了一班出身高贵的银行家的牺牲品，他们为了拿更多奖金，迫使他去赚取不义之财。
10年光景足以暴露他人渎职的证据，但实际上没有。巴林银行的职员们也不全是上层阶级的傻瓜，在利森先生毁损银行的过程中毫无作为。控制体系中有漏洞，而且有些人的确不称职。但还是有一些又聪明又能干的人就是没意识到发生了什么，等到发现时已经太晚了。
他们付出了惨痛的代价。一位牵涉其中的人将此事比作一场车祸，这是个很好的比喻(即使他们自己开车也不够小心)。前一刻，他们都还沿着快车道飞速前进，拥有声望、权利和金钱。可顷刻间，他们就遭受重创，而很多报纸还宣称他们肯定非常愚蠢，而且还可能有罪。
他们中一些人的第一个本能反应就是否认罪责。由于利森先生身兼多项职责，他须向伦敦和新加坡的多名人员述职(而这也是他的问题那么长时间没被察觉的原因之一)，那些人都争辩说，是其他人有过失。我记得就利森先生究竟是交易员还是经纪人的问题，人们进行过一场热烈但根本没有意义的辩论。
然后就出现了美国公司审判中所称的“3万英尺辩护”，即不能指望那些身处高层的人了解下面发生的情况。前世通公司(WorldCom)首席执行官伯尼?埃伯斯(Bernie Ebbers)正在使用这种辩护理由。巴林银行董事长彼得?巴林(Peter Baring)和副董事长安德鲁?塔奇(Andrew Tuckey)成功运用这种辩护理由逃避了惩罚。
此事涉及两个问题。第一个问题是伪善。当公司表现良好时，没有多少公司高层会四处宣称，他们与公司基层人员取得的成绩无关，而且不配拥有作为管理者所获得的声望和金钱酬劳。他们理应在出问题时同样承担责任。
第二个问题是心理上的。当某人被卷入巴林银行倒闭等公开的败局，或90年代以来的欧美公司丑闻中，公众不太可能相信他是无辜的。从心理上说，自认把事情弄糟了要更容易些。否则，你就注定要向心存疑虑的听众反复解释有望减轻罪行的种种因素。
对于巴林银行的一些高管来说，这是个痛苦的事实。他们之中有9人被监管部门判定犯有行为失当的罪行，还有一两个人逃脱了罪责。在我看来，最痛苦的是那些否认罪责的人。上诉耗时多年，婚姻崩溃了，他们变得苦恼和沮丧，始终未能松脱套在脖子上的枷锁。
另一些人则比较冷静。巴林银行的首席执行官彼得?诺里斯(Peter Norris)就是个榜样，他曾受到最严厉的审查。他从一开始就承认，这件事是他的责任。他被禁止在伦敦金融城工作并被取消担任公司董事的资格，但他没有上诉。结果，他是最快复原的人之一。
人们说，诺里斯先生在巴林银行倒闭前傲慢自大，但我事后发现他很有魅力。也许，这件事最终对他有益。不管怎么说，他证明了一个较为普遍的真理。在投资银行业，灾难总是会发生的，而将来会有更多的高管会突然失去权力、金钱和崇高的地位。他们的生活是否也会被毁掉，这将取决于他们自己。
