Copper bottom
NICK LEESON had a locked drawer in his desk and a numbered account for parking losses. The copper market's Mr Five Per Cent, Yasuo Hamanaka, had a locker and two sets of books, which must have worked well when the price hit the roof and the boys on the London Metal Exchange start- ed bidding up for their spittoon. He and his billion-pound losses were rumbled when some careless counterparty wrote to his company instead of to his locker. Barings thought that their man was doing something technical and novel with deriva- tives, but the official report describes how, after he bolted, his desk was forced open: `There was a stack of paper. There were holes in some. We found some cut and paste material. There was this letter with a scissor cut round the signature.' Nothing too technical about frauds done with scis- sors and glue or about books cooked to taste. Both of these 'star' traders had set up old-fashioned swindles, and the lessons are the old ones: keep the front and back office apart, distance can lend illusion to the view, if you don't understand it don't do it. Besides, in a well-run dealing room the desks do not have drawers in them. No locks on the lockers, either.
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