Nick Leeson (Exhibit 7.1) came from humble origins compared to most of
Barings’ officers. He had no family ties to the nobility, did not attend Eton,
and did not serve in the Coldstream Guards.The son of a Watford plasterer,
Leeson’s first job at Barings was as a clerk, but he rose swiftly. His big break
came when he was sent to the Barings’ Indonesian office to sort out a tangled mess in the back office.The Indonesia office had a large number of
stock trades that did not reconcile, because the trading volume on the Indonesian
stock exchange had grown so fast that the procedures for delivering
stock certificates could not keep up with the volume.The bank had
hundreds of small discrepancies between the stock certificates it held and
the certificates it was supposed to hold. The bank’s stock trading business
was profitable, and most of the discrepancies were small. Sooner or later the
vast majority of these discrepancies would be resolved as the paperwork finally
caught up with the backlog. It was Leeson’s job to sort out the problems
in Indonesia so branch operations ran smoothly