Alan Rickman: a week to Die Hard (in bonds)

This week we mourn the loss of 69 year old entertainment great: Alan Rickman. An accomplished stage and film actor, he may be most remembered for some of his villainous roles such as the Sheriff of Nottingham in Robin Hood: Prince of Thieves.

Perhaps his greatest role is as the foil to the hero, John McClane (played by Bruce Willis) in the original Die Hard.  Rickman plays Hans Gruber, the criminal head of a team that seizes a Los Angeles skyscraper during Christmas.  McClane is a cop, trapped in the building, who has to try to, single-handedly, outwit Gruber, whilst the LAPD gets in the way.

In the film Gruber is highly intelligent: he plans to steal $640m of bearer bonds but disguises the criminal operation as a terrorist act in which he and his crew will apparently be blown up whilst making their escape by a separate route.  He is both charming and ruthless, and outwits everyone in the film except the hero.  Rickman plays Gruber with a magnetic oiliness which somehow never seems over the top.

But what is it about bearer bonds that makes them steal-able?

The answer is that securities are either registered, or bearer.  Registered securities come with an obligation by the issuer to keep a registry of the beneficial owners of the issued securities.  This is usually done by appointing a third party Registrar. This could include shares (stocks) or bonds or any financial instrument issued by a company or government.  If a certificate is lost, then the beneficial owner can write to the Registrar, sign a form of indemnity, and receive a new certificate.  UK shares are all registered- a provision in the 2006 Company Act allowing bearer shares is now being closed.  UK government bonds (called gilts) are registered instruments.

Bearer securities have none of these protections.  The only proof of ownership is the certificate.  Hence their popularity in crime films like Die Hard and the Al Pacino and Robert De Niro film Heat.  A criminal need only steal them, take them to a paying agent bank appointed by the issuer on or after the maturity date, and cash them in (or sell them to an unknowing third party).  The bonds are in effect better than cash: they are not tracked by any centralised registry, and they are as good as cash (and weigh a lot less than a stack of $100 bills).  This to me sounds like a lot less hard work than Michael Caine’s The Italian Job, where the thieves have to seize actual, weighty gold and get it out of the country.

In the real world, bearer securities have been implicated in many cases as mechanisms for money laundering or tax evasion.  Since the source of the funds might be cash, a bearer instrument is a good thing for the launderer to exchange his or her money for.  The launderer then presents the certificate to the paying agent bank, and has a totally legitimate sum of money in return.  Similarly the absence of ownership information makes it difficult for national tax authorities to trace to whom interest was actually paid.

You would be right in thinking that this inherent anonymity has made these instruments unpopular with the authorities, among others.  However the world’s largest international bond market, the Eurobond market, has a standard legal form of a bond which is a bearer security.  It should be understood that the Eurobond market is not just about bonds paying in Euros, it encompasses any bond issued by an entity outside its home country and to more than one market—the most popular currency of issue is in fact the so-called Dollar Eurobonds.

In the early 1990s a process of “dematerialisation” was undertaken to solve the problem of too many paper Eurobonds circulating.  What this meant in practice was an agreement by those trading in the virtual Eurobond market to trade via Centralised Security Depositories (CDS): in Europe the 2 main ones are Euroclear and Clearstream.

So if you are selling a $10m face value bond issued by du Pont Chemical Company, paying 6.5% coupon, maturing January 2028, to me for say $11,170,000 , we would agree to clear through Euroclear.  At the moment the transaction takes place, I would transfer the amount of money to you, and you would instruct Euroclear to transfer the bonds from your electronic account with Euroclear to my account with Euroclear.

Thus although in a legal sense Eurobonds remain bearer securities, in a practical sense an electronic trail has been created for most or all Eurobonds.

Hans Gruber’s attempted $640m bond transaction was astute for the time, if John McClane had not gotten in his way.  But these days he would have to be some sort of sophisticated computer criminal, which makes for less exciting cinema.

BPP Professional Development offers a number of courses to help you learn more about bonds—but not how to steal them!  It also offers courses on Money Laundering (the prevention, not commission of!) and other aspects of financial regulation.

We have a number of courses on bonds

in particular Bond Markets – Introduction, and Bond Markets – Advanced as well as Raising Debt Finance – Bonds and Fixed Income.

We also have a range of introductory financial market courses including The City and Financial Markets- an Introduction (1 day) which overviews how finance in the City of London works and the different sorts of products that are traded, and Capital Markets – An Introduction (2 day) which goes into more detail on all the main financial market products such as shares (stocks), bonds and derivatives.

We have a full range of Regulatory and Compliance courses: and of particular relevance would be Key Aspects of Money Laundering Regulation, Financial Services Regulation – Introduction, Financial Services Regulation – Keeping Up to Date and FATCA – Essential Requirements (Foreign Account Tax Compliance Act).

To find out more about our in-house training visit the website or email

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