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.