Established in 1762, Barings Bank was one of the United Kingdom’s most prestigious financial institutions.  Barings also held the title of being the oldest merchant bank in London.  Barings Bank had weathered many storms without faltering, including the Great Depression and two World Wars.  Despite its long standing history, Barings Bank was ultimately undone by one man in 1995.

On this day, February 26th, in 1995, Barings Bank collapsed after one of their head derivatives traders, Nick Leeson, lost $1.3 billion in speculative investing.  Leeson, who worked in Singapore, attempted to take advantage of disparities in the Osaka Securities Exchange in Japan and the Singapore International Monetary Exchange, or arbitraging.  Leeson was not under a great deal of supervision and subsequently began reporting losses as gains to Barings headquarters in London.  Lesson continued losing great sums of money until his actions were discovered on February 25, 1995.  Leeson had lost twice the bank’s available trading capital and Barings was declared insolvent the next day.

Barings Bank was then purchased by Dutch bank ING, who assumed all of Barings’ liabilities.  Nick Leeson attempted to return to the U.K. to receive a sentence, but was extradited to Singapore.  Leeson was sentenced to six and a half years in a Singapore prison.