whose errors were ones of omission rather than commission. Simply put, there was a gaping lack of management control that gave too much autonomy to Leeson, who was, in more ways than one, far beyond the scrutiny of his supervisors. The directors in London thought Leeson was arbitraging, when, in reality, he was taking outright positions and selling naked (i.e., unhedged) puts and calls—both of which were clear violations of Barings’ rules. No one in the bank seems to have fully understood the risks that Leeson was taking, and because he was reporting such large profits, no one posed the hard questions that should have been asked. Leeson’s supervisors should have had direct and immediate knowledge of his activities.