3. Why did Nick Leeson establish a bogus error account (88888) when a legitimate account (99002) already existed?
Nick Leeson established a bogus error account (88888) when a legitimate account (99002) already existed in order to conceal his unauthorized trading activities. While the legitimate error account was known to Barings Securities
in London, the bogus account was not. However, the bogus account was known to SIMEX as a customer account,
not as an error account. In this way Leeson could hide his balances and losses from London – but not Singapore.
One the other hand, SIMEX thought the bogus error account, 88888, was a legitimate customer account rather
than a proprietary Barings account.
3. Why did Nick Leeson establish a bogus error account (88888) when a legitimate account (99002) alreadyexisted?Nick Leeson established a bogus error account (88888) when a legitimate account (99002) already existed in orderto conceal his unauthorized trading activities. While the legitimate error account was known to Barings Securitiesin London, the bogus account was not. However, the bogus account was known to SIMEX as a customer account,not as an error account. In this way Leeson could hide his balances and losses from London – but not Singapore.One the other hand, SIMEX thought the bogus error account, 88888, was a legitimate customer account ratherthan a proprietary Barings account.
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