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Rogue Trader

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Rogue Trader

How many times can you go double or nothing before you wind up a billion pounds in debt? In “Rogue Trader”, a film based on the life on Nick Leeson, we get a glimpse into this real world dilemma. The drama begins with Leeson’s promotion to general manager of Barings Futures Singapore. As general manager, he faces a personal quandary and must decide whether to cover for a friend and coworker who made an honest mistake (one that resulted in the loss of a substantial amount of money) or to turn the same person in to face termination. Leeson chooses loyalty to his friend over loyalty to the bank, and covers up the losses by creating an error account. This account served to hide said losses while Leeson tried to make back the money that was lost. After experiencing additional losses, Leeson hit a lucky streak and was able to make up the money due to market growth. However, the profound effects of making so much money in the market quickly got to his head. Riding on the coattails of this success, coupled with other catalytic factors that created another loss, he was once again put in the same position to make up lost dollars in the market. From this point on, we see Leeson gamble on the market, doubling down and hiding his losses from everyone around him until his debt becomes insurmountable. Based on Leeson’s actions, the two COSO components most violated are risk assessment and control activities, of which many examples can be seen throughout the movie.
Risk Assessment is a crucial part of any gamble, not the least of which includes the trading of stocks. However, in “Rogue Trader”, risk assessment is something that is constantly overlooked, leading to risky or poor choices being made. The first example of this can be seen in the scene where the Barings’ Board of Executives meet in London to discuss the amount of money invested into Barings Futures…...

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