Nick Leeson Archives - Lion and Palm Tree

This post is a twin of my last one on Teaching Ethics in Management and Accounting because they originated in my reading of two related articles on fraud by Seb Murray (Financial Times, 13 June 2022). As the post became too unwieldy, I decided that it made better sense to split it into two.

This post also takes off from a passing reference to Donald Cressey in another recent post on Strategic Risk in Banking. Another post on Fraud, Terrorism, and Bathtub, had mentioned how those who want to commit fraud learn the loopholes over a period of time. Those loopholes provide the opportunity for fraud as discussed below. The discerning reader may also find in this post a resonance of the determining factors mentioned in yet another post on Why People Wore Masks. While wearing a mask is an act of compliance with a regulation, committing a crime is deviant behaviour, essentially constituting noncompliance with socially and culturally accepted norms, and/or in defiance of legal or regulatory sanctions. Continue reading “Why people commit fraud”

“Around the World in 80 Days” by Jules Verne

(Note: A much shorter version of this article appeared in Mint dated 13 July 2020. You can read it here.)

In 1872, when Phileas Fogg, Jules Verne’s enigmatic character, wagered with his whist partners at the Reform Club, including an Assistant Governor of the Bank of England, to travel round the world in eighty days, he issued a cheque for £20,000, drawn on Baring Brothers. That was security enough. That was the standing of Baring Brothers, which always paid his cheques “on sight and his account remained invariably in the black.” Moreover, he was accepted as a member of that distinguished society on the recommendation of Baring Brothers with whom he had an unlimited overdraft limit. Continue reading “25 years after Barings: Have the lessons been learnt?”