In 183, the newly born United States bought all the funds from the Bank of Bahrain in southern Louisiana from France. Bahrain Bank has a strong competitor-the house of Judas runs Ross Cserto Bank, and Baring governments, major companies and many customers are the first choice banks. In 1886, the Bank of Bahrain issued a "Ginishi Securities", and the buyer flooded the bank with a hand-held application form. Later, the police had to be used to maintain it for an hour. Many people waited in line to buy a small amount of shares and then waited for an opportunity to throw them out. Waiting until the next day, the stock price doubled. Due to the outstanding contribution of the Bank of Bahrain, the Bahrain family successively won the honor of
At the beginning of the 2th century, the Bank of Bahrain was honored to accept a special customer: the British royal family. Five hereditary aristocrats, which can be considered as a world record, laid the foundation for the prominent position of Bahrain Bank.
Morrison worked in the 1th Bahrain Bank in 1989. Before that, he was Morgan Adams, but Li was a staff member of the clearing bank department. Ba Ling, he soon fixed his job in Indonesia. Because of his patience, perseverance and good logical reasoning, he solved many problems and can be solved quickly, so this work has been improved. Therefore, he was regarded as an expert working in Indonesia by Ma Lixun of the London headquarters of Futures and Options Clearing House, and promised to appease him overseas: a corresponding responsibility. In 1992, Bahrain headquarters decided to send him to Singapore branch to set up the futures and options trading department and serve as the general manager.
No matter what kind of trading, mistakes are inevitable, but the key is to see how you handle these mistakes, especially in futures, some people will "buy" and "sell" with wrong gestures; Some people will buy at the wrong price contract, some people may not be cautious enough, and some people may buy March futures, futures and so on. Once a mistake is made, it will bring losses to the bank. The bank must deal with these mistakes quickly and properly. If the mistake is irreparable, the only feasible way is to consider that the mistake on the computer is called a "wrong account" and then report it to the bank's headquarters.
Lisson, a trader of any futures in Singapore, in 1992, the account of Bahrain Bank was originally "9995", and the "wrong account" was specially used to deal with the negligence errors caused by the trading process. This is a wrong account in the process of a normal financial system. In the summer of 1992, the London headquarters was fully responsible for the liquidation work Gordon. Baosai made a phone call to Ma Lixun, and Leeson set up a "mistake account" to record minor mistakes and treat himself in Singapore so as not to trouble his job in London. Lisa Marie hired a special office to settle accounts, so could you set up a document to ask her? Soon, Prophet Li typed some commands on the computer and asked him what account was necessary. In China culture, "8" is a very lucky number. As his lucky number, Li Sen's account number must be five digits, accounting for 88,888 "wrong account" was born.
a few weeks later, the telephone of the London headquarters asked the Singapore branch to follow the old rules and keep the "9995" account to report directly to London. The "88888" error account was just created idle, but it has become a real "error account" stored in the computer. A lot of mistakes have been noticed in the headquarters of Singapore Branch, but Morrison cleverly evaded them. The neglected account "88888" provides Allison with an opportunity to create false accounting for the future, and then cancel the account, and Bahrain's history may be rewritten.
On 17th, 1992, the trader Jin Wang of Bahrain made a mistake: when the client (Fuji Bank) bought the Nikkei index futures contract for 2 days, the trader mistakenly sold it for 2, and when Leeson was in liquidation, he worked at night. The mistake was that Leeson found out that I had to correct this mistake, and I could buy 4 contracts with daily closing price and loss of 2, pounds, and I should report it. However, due to various considerations, it was decided to use the wrong account. However, "88888" only passed the index futures contract for 4 days to cover up the error. In this way, the transaction conducted by Leeson becomes the owner's transaction ",which is the part of the account facing the risk of Bahrain Bank. A few days later, the Nikkei index rose by 2 points, and the short position lost 2, to 6, pounds (note: Morrison's annual salary is less than 5, pounds). Leeson even dared not escalate this mistake.
Another mistake of the same nature was made by George, Morrison's friend and executor of the commission. George and his wife divorced, immersed in pain all day, and began to give up on themselves. Allison likes him because George is his best friend, but he is also one of the best traders. But soon George began to have problems. Morrison indicated that he sold 1 copies of September futures and bought 8 million pounds worth, and several trading certificates were not filled in.
If George's mistake is revealed, Morrison will have to bid farewell to his already satisfactory life. George made several mistakes. It is a task to record "88888 account" Allison. However, there are at least three problems bothering him: first, how to make up for these mistakes, and how to escape after charging the "88888" account wrongly. At the end of the internal audit of the London headquarters, SIMEX asked for additional margin every day, and they calculated that the Singapore branch lost its daily intake. You can also display "88888" on the big screen of SIMEX.
In order to make up for the mistakes of its employees, Li Sen earned commission, but of course, the premise is that these mistakes will not suffer too much loss, because there are not too many, but the mistakes made by George are really too great.
In order to earn enough money to compensate all the losses, Leeson took more risks, and he engaged in a lot of on-site transactions, because the Nikkei index stabilized the option money earned by Leeson from the transactions. If the luck changes dramatically, in the Nikkei, this transaction will make Bahrain bear huge losses. During a period of time, Leeson did very well. In July 1993, he had been losing 6,, pounds in the "88888" account, and when he made a slight surplus, his annual salary was 5, pounds, and his year-end bonus was nearly 1, pounds. Lissen stops there, and then the history of Bahrain will change.
In addition to the wrong businessman covering another serious mistake, to win the biggest customer in the Nikkei market, Bonifay. At the end of 1993, for several days in a row, the daily market price soared to a record high, and on the computer screen of frequently broken clearing records, there were more than 1, points in the backlog of countless dealer accounts. Because the system can't work normally, through the transaction records of human resources. By the time you found all kinds of mistakes, Allison lost it, and it has reached nearly $1.7 million a day. Morrison decided to continue to hide these mistakes when there was no way out.
in 1994, Li Sen, and the loss amount has been numb. The loss of account No.88888 was 2,3,, pounds, reaching 5,, pounds in July. In fact, Morrison then leads many trades by the market trend, not because he expects the market. He has become a puppet, but his risky position is manipulated. He thinks, what kind of market changes direction, so that he won the game to make up for the loss of 88888 account number, they try to influence the market trend in this direction.
Allison's autobiography: "I'm ashamed to be a liar-I made a small mistake at first, but now it's all around me, just like cancer, like my mother never meant to put my growing experience in this way."
From a systematic point of view, the most fundamental problem lies in the confusion of trading and settlement roles in Bahrain. After working in Singapore in 1992, Lisson worked in Bahrain, Singapore Futures Exchange and clearing management. As a businessman, Li Sen might have been committed to trading derivatives and arbitrage on behalf of Bahrain's clients, all of whom are engaged in Bahrain, and basically there is not much risk. Valet operation, risk-taking by the customer's own traders only earn commission arbitrage puzzle between the market prices to earn the difference. For example, in a very short period of time, Li Sen-li earned profits from Bahrain in Singapore and the trafficking market at different prices. A general license for a certain amount of risk positions held by bank traders. However, in order to prevent traders from being exposed to excessive risks in banks, such as subsidies, are usually quite limited. The daily settlement bank traders and risk positions of the clearing department can also be effectively understood and mastered. Unfortunately, Morrison is a person who also trades and clears two positions.
In fact, a week ago, Morrison arrived in Singapore and had an internal communication in Bahrain, expressing concern about the major disaster this issue may cause. However, this is ignored, and Allison reports responsibility, while the part-time trading and settlement department. If Morrison is only in charge of the liquidation department, because he will be given the responsibility, he has no need and no chance to hide the mistakes of other traders' behavior, which will not lead to out of control in the last case.
The headquarters of Bahrain Bank sent someone to investigate Morrison's loss of 5, pounds. In fact, every day, on the balance sheet, there is a remarkable record every day to see Allison's problems. Even at the end of the month, Leeson made false accounts and covered up the problem, which can be easily found-if Bahrain is really strictly censored. Allison made a fake deposit of 5 million pounds in Citibank, but 5, people were transferred to account number 88888 to compensate for the losses. Check the month of the account, but no one came to check Citibank account, so no one has Citibank account and deposit 5 million pounds.
Balance Sheet, Chairman Peter Bahrain's Bank of Bahrain passed the work that the balance sheet did not do during the review period in March 1994. Because of its composition, it can change significantly in a short period of time. Peter Bahrain said, "If more balance sheet data is disclosed, it will increase a group's understanding, then it is naive." Chairman Bahrain, the importance of the balance sheet is not high, which is really unexpected.
On January 11th, 1995, the letter from the auditing and taxation department of Bahrain in Singapore Futures Exchange raised some questions, and their funds needed to keep the account number of 88888. At this time, Morrison asked London to import more than 1 billion pounds every day to pay the additional deposit. In fact, from 1993 to 1994, Bahrain Bank invested more than 1.1 million pounds in SIMEX and Japanese markets, which exceeded the limit set by British banks with overseas funds and should not exceed 25% of the Bank of England. To this end, the Bank of England of Bahrain has held many talks. In May 1994, the senior official, the Bank of England, was responsible for the supervision of commercial banks. However, this tacit "acquiescence" did not leave any documents, and no relevant departments referred it to the Bank of England. The highest person was responsible, which violated the internal regulations of the Bank of England.
The most incredible thing is the balance sheet of 5, pounds at the end of 1994. Bahrain is still not aware of the looseness and negligence of its internal control. It was found that Bahrain collapsed for two months, and senior employees in Bahrain had such problems, so they should pay attention to more formal investigations by the audit department of Bahrain headquarters. In the past, sen was easily deceived in these investigations. The Leeson period is described as: "For no one to stop it, and I think that's incredible. London should know that my number is fake, and these people should know that my daily cash request from London headquarters is wrong, but they still pay the money. "
from the moral point of view, if all the above financial professionals are rated in Bahrain incident, they should be given a failing score. In particular, many senior managers in Bahrain, without leaving a name at the bottom, blindly believe Morrison and expect him to arbitrage funds for Bahrain. Ironic? However, two months before Bahrain went bankrupt, in December, 1994, as a result of the financial conference held in Bahrain, new york, there were 25 Bahraini bankers all over the world, and Leeson was a hero of Bahrain. The newspaper gave a long and warm applause.
On 18th, the Kobe earthquake in Japan in 1995, in the following days, Tokyo's Nikkei index fell sharply, and Leeson suffered even greater losses. On the other hand, he bought a larger number of futures contracts of Nikkei index, and the Nikkei index rose in an ideal price range. On January 3th, Leeson paid 1 million pounds, and obtained funds from London to buy 3, Japanese government bonds by short selling index futures every day. On February 1th, the history of Lisson's trading record on Singapore Futures Exchange showed that he had 55, Nikkei Stock Exchange futures and 2, Japanese government bond contracts. The more he traded, the greater the loss.
all these transactions are included in account 88888, and the scope of authority of the transactions in the account is temporarily withheld for a single inventory, but the required funds are additionally secured, but they cannot be hidden. Allison used various excuses to transfer. This degree of looseness is unbelievable. In mid-February, Bahrain Bank had a share capital of 47 million pounds.
On February 23rd, 1995, the last day of Bahrain futures, the direction of Li Sen's efforts affected the complete failure of the market. The Nikkei stock closed at 17,885 points, which has reached the risk position of the long position of the Nikkei index futures with more than 6, contracts. The price of Japanese government bonds soared, and its short-term risk position reached 26, contracts. The loss caused by Leeson was Bahrain, and the senior executives in Bahrain still dreamed of dividends the next day, which finally reached a high point of 86 million pounds, leading to the fate of the oldest Bahrain bank in the world.
In the report released by the Bank of Bahrain on October 17th, 1995, Mo Lixun expressed regret about the emotional but also the best Bahrain incident. The conclusion of the report, "Bahrain Group took timely action in February 1995, and they may also avoid collapse. By the end of January, 1995, even though there were heavy losses, after all, only one quarter of the finals were lost to. If Bahrain still knows nothing about the management of the "88888" account until bankruptcy, we can only say that they are already fleeing.
Morrison said: "There are a group of people who were supposed to expose and stop my tricks, but they didn't do so. I don't know what the boundary is between their negligence and criminal negligence, and I don't know what kind of responsibility they bear, but if they were in any other bank, I wouldn't have the opportunity to start this crime."