Nick Leeson, the former rogue trader who caused the collapse of Barings Bank 28 years ago, has joined a firm of corporate private investigators.
The firm, Red Mist Market Enforcement Unit, advertises financial investigation services to investors seeking compensation in court cases, according to an interview with Leeson published by Bloomberg.
Leeson was imprisoned for about four years in Singapore after he tried to conceal as much as £827m in secret trades. His actions ultimately brought down Barings, the City’s oldest merchant bank, in 1995.
He triggered a global manhunt before his arrest after fleeing Baring’s Singapore offices and leaving a note which read: “I’m sorry.” He was eventually captured at an airport in Frankfurt.
According to Leeson’s autobiography, Rogue Trader, he followed a particular ethos at Barings: “We were all driven to make profits, profits and more profits … I was the rising star.”
But despite being lauded as a star trader at one stage, it emerged that he had a dossier of hidden trades in a file, Error Account 88888.
He hopes that his first-hand experience will help him spot fraudsters, and believes that higher interest rates will flush out cracks in business models that were concealed in an era of cheap borrowing.
“I have also been on the other side of the equation and understand the psychology of some of the people involved,” Leeson, who is now based in Galway, Ireland, told Bloomberg.
“It often doesn’t start out as fraud. In the beginning it’s a decision between pleasing everyone around them or highlighting the fact that they’re failing and something is going wrong with the organisation. And that’s kind of how it happened at Barings,” he said.
“That will always be an intense embarrassment. But you’ve got to deal with that and move on. It doesn’t define me as a person.”
Leeson’s new corporate intelligence company is run by Seth Freedman, who worked as an undercover investigator for the disgraced Hollywood producer Harvey Weinstein. Freedman also worked at Black Cube, a private eye firm run by former Israeli intelligence staff. He left the company in 2018. Red Mist was founded in 2021.
“We get the job done and we get investors their compensation. We are essentially guns for hire,” Freedman said.
Red Mist also hired Tom Hayes, a trader who worked for UBS and Citigroup and was imprisoned for fixing the London interbank offered rate, known as Libor. The rate was used by banks to set borrowing costs on contracts with notional values amounting to trillions of pounds.
Hayes has always maintained his innocence and has fought to have his conviction quashed.
The Libor rigging scandal emerged after the 2008 global financial crisis and further damaged the reputation of the City after vast, publicly funded, bailouts for banks.
Red Mist works with a range of forensic investigators and clients have included Nobu Su, a Taiwanese former shipping magnate who was imprisoned for contempt of court and who claims a UK bank failed to protect his interests after the 2008 financial crisis.
