The disintegration of Barings Bank in 1995 due to unauthorized and
fraudulent trading by Nick Leeson, a
derivatives broker employed in Barings' Singapore office. Leeson was permitted to conduct
arbitrage by
buying futures on
Nikkei and at the same time
selling them on Simmex. Instead, he made
unhedged futures transactions on Nikkei and reported his
losses as
gains. His trading was exposed following large losses on Nikkei after an earthquake. His losses totaled more than $1 billion, twice Barings' available
capital. Barings quickly became
insolvent and was sold to ING for 1 pound.