LONDON, Feb. 7 (UPI) -- The rogue trader who lost $1.2 billion for Barings Bank and brought down the British institution said Thursday the $750 million hole blown into the finances of Allied Irish Banks showed financial managers had learned nothing from his case.
"I find it very, very frightening that such a thing can happen again," Nick Leeson, who was convicted of fraud and jailed in Singapore during the 1990s, told the British Broadcasting Corp.
"It means the same that the same levels of incompetence and negligence within the mid- and senior management of the (AIB) bank are still there," said Leeson, who was released from prison after developing cancer of the colon. He has since returned to Britain to study psychology.
The "fundamental question" was, he said, "why some of the middle and senior managers of the bank didn't stop him earlier?" he said of AIB and John Rusnak, the trader blamed for the loss of $750 million at the bank's main U.S. subsidiary, Allfirst Financial Inc.
"The similarities with the Barings case seems to be very striking," Leeson said.
But London financial expert Alex Brummer said that despite all the safeguards set up by regulators in the wake of the Leeson fraud, the AIB case showed "all it has taken is one smart middle-ranking banker to drive a coach and horses through these protections."
"All the financial watchdogs in the world," he said, "cannot protect a bank from unscrupulous activity any more than bars on the window can stop bank robberies."
But Leeson insisted "the checks that should be in place to stop this sort of thing happening are extremely basic, and people haven't been doing them. The problems that were endemic at Barings are still there at AIB, and I find that frightening."
Whatever happened at AIB was not a sudden thing, the ex-trader said. "No one loses $750 million overnight," he wrote in a commentary for The Mirror newspaper in London on Thursday. "I, of all people, know that."
He said the trader involved "would have known for months he was in big trouble and facing the inevitable collapse of his career."
"It feels like you are permanently looking down the barrel of a gun -- 24/7," Leeson said.
