A correctional officer handcuffs an inmate at the Bayamon 705 correctional facility in Bayamon, Puerto Rico. (Photographer: Dennis M. Rivera Pichardo/Bloomberg)

The ‘Arrested Bankers’ Club: Ex-Brokers Return With a Mission

(Bloomberg) -- Nick Leeson and Danny Wilkinson know what it’s like to be tried for financial crimes. Now, they want to save other bankers from the experience.

The pair hit it off when they met at a plush hotel in central London a few weeks ago. They were there for a compliance conference on how to stop the kinds of wrongdoing that Wilkinson was acquitted of, and Leeson was jailed for.

Wilkinson, a former ICAP Plc broker, was accused of helping convicted trader Tom Hayes rig Libor rates -- charges that a jury acquitted him of in January 2016. Leeson, of course, was at the center of the biggest financial scandal of his time two decades earlier, when his rogue trading brought down 230-year-old Barings Bank.

It’s the first time they’d met. It’s not like there’s an “arrested bankers” network on London’s conference speaker circuit, Wilkinson joked during a joint interview with 51-year-old Leeson at the event, laughing that maybe they could set one up.

There certainly are a lot of other potential speakers. Wilkinson was one of dozens of traders and brokers fired after being implicated in a global conspiracy to rig Libor, a key interest-rate benchmark. Former UBS Group AG trader Kweku Adoboli, convicted for causing a $2.3 billion loss at the bank, was talking about his experiences to groups before the U.K. deported him last month.

Dividing Line

“Those individuals who tell their stories are extraordinarily valuable because most people don’t ever think what they do in their day to day job is going to end them up in that sort of situation,” says Alison Geary, a white-collar crime attorney at WilmerHale in London. People “often think there’s a clear dividing line between themselves and some of the people they see in the press, and there often isn’t.”

Wilkinson is working for Raidne -- pronounced “reth-nee” and named after the Greek word for siren -- a start-up that monitors trades to spot market abuse. Leeson, who pitches himself on his website as “the original rogue trader,” is an established figure in the world of conference speakers -- a world that Wilkinson is just getting into.

Sceptics may question the value of turning ex-convicts -- at least in Leeson’s case; Wilkinson was acquitted -- into celebrities and letting them embark on lucrative careers on the back of their deeds. Leeson, who admits he was a “wrongdoer” and says he was rightly punished, was paid “quite well” for taking part in the U.K. television show Celebrity Big Brother this year, he says, though he won’t reveal how much.

‘At the Coal Face’

Wilkinson, 52, says his real value to a firm that helps uncover market abuse doesn’t really have anything to do with his role in the London interbank offered rate case. It’s because he spent years “at the coal face” of trading.

“I’ve seen things go on that were wrong,” he said, and times when traders have found ways to get around the rules. “That experience will help find where to look.”

He and Leeson strike up an easy patter. When Wilkinson says he’s gone into trader surveillance because it’s about protecting the wrongly-accused, not just “putting the odd bad guy in jail,” he turns to smile at Leeson -- who was sent to a Singapore prison for his rogue trading -- with a cheeky “sorry.” Leeson smiles back. Now, after the conference, they’ve started to swap emails.

Leeson is used to telling his personal story -- he even did it as a contestant in the U.K. television show Celebrity Big Brother this year alongside soap stars and the former “Cheers” actress Kirstie Alley, in a series where housemates were selected because they’d all been at the center of a media storm. His lesson for banks and their compliance teams is pretty clear: he tells them in a speech at the conference to get tough. He had “contempt” for bank staff who never “intelligently interrogated him” about what he was doing.

“I was getting worse and worse, more out of control,” and yet “those people weren’t good enough to ask me those difficult questions,” he said.

Raves

Moving back into finance is a bold, and not always easy, shift for Wilkinson. Even though he was acquitted, he was effectively exiled from the industry at the time. He left completely, and started DJing with a house music collective, Hellsinki-V, which performs at raves wearing lab coats.

His co-defendants -- Noel Cryan, Colin Goodman, Terry Farr, James Gilmour and Darrell Read -- have mostly stayed away from the industry even after being acquitted, though Goodman’s a financial regulation specialist, according to his LinkedIn profile. The group that Wilkinson calls “The Southwark Six,” after London’s Southwark Crown Court, where they were tried, are now his “best mates,” he said.

Former traders have a perspective to offer for people still in the industry, mostly because of the reminder that current bankers may be forced to explain their actions at a later date, from a prominent seat in court.

Explaining your actions to members of the public on a jury is “not an easy job sometimes,” said James Norris-Jones, an attorney at Cleary Gottlieb in London. That’s because professionals often “operate in a bubble, in a way they don’t perhaps appreciate.”

©2018 Bloomberg L.P.