business communication case study

1. The Event of Barings Bank
Collapse
Prepared by:
Qurrat-ul-Ain
Maseel-e-zehra
Nimrah sharif
Ghosia Faaroqui
Sarah Zubair

2. The Collapse
Barings was brought down in 1995 due to
unauthorized trading by its
head derivatives trader in Singapore, Nick
Leeson.
At the time of the massive trading loss, Leeson
was supposed to be arbitraging, seeking to
profit from differences in the prices
from Osaka Securities Exchange in Japan and
the Singapore International Monetary
Exchange(SIMX).
Leeson bought on one market then held on to
the contract, gambling on the future direction
of the Japanese markets.

3. The five eight account
 Because of the absence of oversight, Leeson was able
to make seemingly small gambles in the
futures arbitrage market at Barings Futures
Singapore and cover for his shortfalls by reporting
losses as gains to Barings in London. Specifically,
Leeson altered the branch's error account,
subsequently known by its account number 88888
as the "five-eights account"

4. The discovery
 On 23 February 1995, Barings Bank auditors finally
discovered the fraud, when Peter Baring, received a
confession note from Leeson. Leeson's activities had
generated losses of total £827 million (US$1.3
billion), twice the bank's available trading capital

5. The final outcome
 Leeson was sentenced by the Singapore Court for 6 years and 6
months imprisonment in 1995.
 The Barings bank was declared bankrupt and was bought by a
ING a Dutch Bank.