Drunk British Banker Bet $520 Million on Oil Futures
Steven Noel Perkins, a former oil trader at PVM Oil Futures, was fined over $100,000 and banned from the financial services industry for at least five years, Britain's Financial Services Authority said.
Perkins was credited with losing $10 million for his employer and briefly causing the price of oil on global markets to surge $1.65 per barrel to an eight month high -- all in the course of two hours. At one point, the FSA said, Perkins had built a long position representing 7 million barrels of oil.
Not An Excuse
"As a direct result of Perkins' trading, the price of Brent increased significantly," the FSA said in a statement. "Perkins' trading manipulated the market in Brent by giving a false and misleading impression as to the supply, demand and price of Brent and caused the price of Brent to increase to an abnormal and artificial level."
The trader had spent the last weekend of June in 2009 on a rowdy golfing trip with friends, according to regulators. When he returned home, Perkins continued drinking but traded the fairways and bunkers for the global Brent crude oil futures market. He stayed up all night, and by the early morning of June 30th had racked up $520 million in oil bets.
"Perkins' drunkenness does not excuse his market abuse," Alexander Justham, director of markets at the FSA, said in a statement. "Perkins has been banned because he is not a fit and proper person to be involved in regulated activities and his behaviour posed a risk to the proper functioning of the market."
Perkins joined a rehab program immediately after the incident, the FSA said, adding that "it is possible that Perkins may be rehabilitated over time and may be fit and proper again in the future. The ban has therefore been limited to a minimum term of 5 years."