Lessons from a Rogue Trader

What appropriate words could be used to describe a man who, working probably alone with his mind as his only companion within a short period of three years, crumbled a 233-year-old financial institution?

Wicked. Vicious. Reckless. All of these and much more, and you will not be wrong. It must be a heinous act. Yet, it seems that the essence of the entire episode that led to that monumental collapse may not have been adequately captured by these adjectives. What is left of that history are lessons in managing success and strict adherence to oversight functions for every business.

The amazing narration of how Nick Leeson misapplied his genius to completely wipe out a history of more than two centuries, is a history in itself, and a scary one at that.

This tale has been told severally by Leeson after serving his term for the crimes he committed, but each time he tells it, instead of sounding like a broken record, it rather evokes a combination of pity for the Berings family whose generational sweat went down the drain the way it did; sympathy for the dramatis personae, who at that time in his late 20s was handed a responsibility too much for one man.

Nick Leeson was Chief Trader and also responsible for selling his trades for Berings at the Singapore International Monetary Exchange (SIMEX) and without adequate monitoring, he engaged in unauthorised speculative trading which cost UK’s oldest merchant bank at that time, its place in history.

 A classic case study at some business schools, each time Leeson tells his story; he reveals that aspect of a sordid tale only a few people would ever be bold enough to face. It comes at you like a certain ghost which shadows everyone described as a genius at what they do.

It has been 20 years long years since the incidence that led Leeson to jail happened. The price he paid was enormous. He lost his first marriage, lost a reputation that was perceived as one of the best things that happened to the finance sector; but Leeson has since mustered enough courage to tell the world his story.

The world is now Leeson’s stage, providing him opportunities to share his once shameful story with diverse audience; and he gets paid for his rogue experience.

He tells it with an obvious remorse. He does not hide under his tone the burden he has borne these 20 odd years. In fact, when he is confronted with the most difficult questions which he is ever willing to answer; his response only reveals those deep aspects of business that companies often take for granted – risk management.

Could a man be called a celebrity in infamy? Leeson has become one. Whether you like what he did in his past or not, you will have to concede to him a rare courage to face his new life with boldness and confront his past.

And that is the lesson in the Nick Leeson story. Many people in Leeson’s position will rather choose death than have the world learn a lesson or two from their failures.

In a world full of hypocrites, Leeson’s heroic stand-up against an inglorious past is simply an acknowledgment that anyone can miss it. Indeed, the higher up you are, the greater the temptation to fail.

Beyond that failure however, what Leeson is simply saying is that being alive especially after he survived Colon Cancer; is an opportunity to make an amend and help others who could have fallen into the same error retrace their steps.

And in a climate like Nigeria where Leeson was a guest recently at the 5th Christopher Kolade Annual Lecture organised by Convention on Business Integrity Nigeria (CBI); people hardly admit failures especially if they wear the epaulette of success.

Leeson has simply reminded us that success is not the absence of failure rather, it is the ability to own up when you fail and proceed to gather the pieces, make adjustments and become an epistle for others to read and help them guard against similar dangers.

Ironically, Leeson’s new ‘success’ story is what major religions of the world preaches in their tenets – God has not come to you because you are perfect rather, you are selected in your imperfection and once you have come to Him just the way you are; then He works on you to become a cleansed vessel fit for the Master’s use.

Where did we miss this?

It is in our attempt to make god out of men that we face our greatest challenge. It is in our describing a man as infallible and equate success with perfection. Indeed, our mistakes to acknowledge failures and make quick amends, stems from the wrong social norms foisted on persons and which corrupts sensibilities.

Nigeria’s Acting President Professor Yemi Osinbajo said this much while making his remark at the CBI night, this is after Leeson had delivered his keynote. Unfortunately, as would be expected, the media dedicated elaborate space to highlight Professor Osinbajo’s comments about the huge amount that has gone into corrupt hands and the cost of retrieving those stolen national wealth.

While bringing to the fore the debilitating effect of corruption on our society and the courageous fight being waged against it, Professor Osinbajo’s biggest contribution to the discourse on Leeson’s experience was clear.

And that is, none of the several Nigerians so far convicted for financial crimes have exhibited Leeson’s kind of courage and remorse to let the public learn from their misadventures.

Therefore the wisdom to learn is not in the profits that Leeson makes from his negative experience but rather, it is in the insight that many people who are at the gate of making the same mistakes are restrained.

If those who fell from their once exalted positions are able to share their experience, then more people are most likely to pay attention and could be ‘delivered’ from the enticing claws of financial misconduct.

Will this counsel be hearkened in Nigeria? It is a lot more difficult in this environment where ethno-cultural and religious rationalisation inform a society’s justification for appointments into public office, ownership and control of wealth, and indeed everything Nigerian.

How many businesses, indeed medium scale businesses are able to shun their entrenched sentiments and take a closer peep into the conduct of a successful manager, especially if he is a celebrated board room guru?

Nick Leeson is most able to tell his story today because in the society where he finds himself, there is still hope of a second life for an ex-convict. Who will listen to an ex-convict in Nigeria?

This understanding may have strengthened the courage for offenders to loot big and dare the consequences. They understand that with the much money they have stolen, the can manipulate the system, and only a part of their loot would be lost.

Until the Nigerian society makes financial crimes unprofitable, ameliorate stigmatisation that prison experience attaches, and embrace risk assessment as a part of business conduct, until then, we would not have a Nick Leeson made in Nigeria.