Leeson used the 88888 Account in two major ways. Whenever he traded
more contracts than his limits allowed and whenever he had losing trades
that would have blemished his reputation as a brilliant trader, Leeson assigned
the extra trades and the losing transactions to the 88888 Account.
He also used the account to conceal the fact that he was speculating and not
arbitraging. Remember that Leeson was supposed to be long and short in
approximately equal amounts on the different exchanges, and it was for
this reason that his supervisors allowed him to have such large positions. In
reality, he was long in amounts that were two or three times larger than his
supervisors realized, and he did not have short positions to offset these
enormous exposures.9 Leeson’s trades in the 88888 Account shrouded his
accumulation of massive losses that were threatening the solvency of the
bank, and because the trades in the 88888 Account were outside Barings’
daily scrutiny, they were the ones that broke the bank.