Oil broker busted for drunk trading
The Financial Services Authority (FSA) has fined Steven Perkins, a former employee of PVM Oil Futures Ltd, 72,000 pounds ($108,000) and banned him from working in financial services for at least five years for making trades without the authority of clients or his employer.
According to a Reuters report, the FSA says Perkins bought massive volumes of Brent crude oil in the wee hours of June 30, 2009 after several days of heavy drinking -- and then covered up his actions by lying repeatedly to his employer.
"Perkins' drunkenness does not excuse his market abuse," said Alexander Justham, director of markets at the FSA. "Perkins has been banned because he is not a fit and proper person to be involved in regulated activities, and his behavior posed a risk to the proper functioning of the market."Perkins' binge drinking-induced trades cost PVM, the world's largest independent oil broker, $10 million. The FSA said PVM was quick to contact them after it uncovered the trades and refrained from criticizing the firm in its ruling. A PVM spokesman said the matter was "now fully closed."
His unauthorized trading also pushed the price of Brent crude oil futures up to almost $73.50 a barrel -- at that point the highest price in 2009. Perkins had been drinking heavily at a company golf weekend and continued to imbibe on the Monday afternoon before his unauthorized trades.
Perkins first telephoned in eight orders to PVM's Brent trading desk, saying they were on behalf of a trader described by the FSA as 'Client A', who had only ordered one deal. In the early hours of Tuesday morning, Perkins began trading Brent crude from his laptop at home, buying up 7,125,000 barrels in just over two hours.
"As a direct result of Perkins' (Tuesday) trading, the price of Brent increased significantly," the FSA said. "He claims to have limited recollection of events Monday and claims to have been in an alcohol-induced blackout at the time he traded."
After PVM uncovered the illicit trades on Tuesday morning, Perkins lied, saying Client A had been with him through the night before the company cut off his ability to trade.