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. Last Updated: 07/27/2016

Barings Trader Held on Fraud Charge

FRANKFURT, Germany -- A court ordered the British futures trader blamed for the collapse of Britain's oldest investment bank to be detained for extradition proceedings Friday, on a forgery charge that carries a seven-year prison sentence in Singapore.

The ruling came after Singaporean officials delivered an arrest warrant and extradition request for the Baring Brothers and Co. trader, Nicholas Leeson.

The warrant charges Leeson, 28, with "forging documents in preparation for fraud,'' Frankfurt prosecutor Hans-Hermann Eckert told reporters.

The court process could take about four months, Eckert said, and then the federal government would make the final decision as "a diplomatic act.''

Leeson "was not quiet,'' when he was told of his detention, said his attorney, Eberhard Kempf. He said that Leeson, as a British citizen, maintains his right to go home, even though he may eventually face charges there, also.

Leeson did not want to go to Singapore "because of the judicial and human rights situation in Singapore,'' said Kempf.

Officials of Singapore's fraud squad, acting on a complaint from Baring Brothers and Co., brought the warrant and extradition request Friday. One of them said the maximum prison sentence for forgery with intent to commit fraud is seven years.

Before the court's decision, Kempf was asked if Leeson had information that could implicate others at the 232-year-old bank that collapsed Sunday. Kempf answered, "I presume,'' but said he didn't know if Leeson acted alone in his trading in Singapore.

Leeson is said to have made wrong bets on which way the Tokyo stock market would go, costing the bank $1 billion and leading to its collapse Sunday. Leeson was detained with his wife, Lisa, aboard a flight from Malaysia when it landed Thursday in Frankfurt. Kempf said his client had tried to buy tickets all the way to Britain, but the London flight was booked. Mrs Leeson was freed Thursday night and her whereabouts were unknown.

Prosecutor Eckert that further material had been provided Friday through Interpol, which helped support the decision to hold Leeson in Germany.

"We are waiting for documents that provide more evidence,'' Eckert said. He added that if the Singaporeans did not come up with all necessary documents in 40 days, they could ask for an extension of Leeson's detention.

Leeson's attorney confirmed his client had also hired counsel in Britain, where fraud investigators began probing Leeson's activities on Friday.

The British government has not indicated whether it would seek Leeson's extradition, but a British police official was in Frankfurt, prosecutor Eckert said.

Barings PLC, the bank's holding company, was put under the control of court-appointed administrators, who are trying to assess what can be salvaged of the institution that had Queen Elizabeth II among its clients.