Oil broker banned for drunk trading binge – Yahoo! News
LONDON (Reuters) – Britain’s financial regulator has fined and banned a former broker for manipulating oil prices by buying more than 7 million barrels while on a drinking binge.
The Financial Services Authority (FSA) said it 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 carrying out trades without the authority of clients or his employer.
The FSA said Perkins bought huge volumes of Brent crude oil
in the early hours of the morning on June 30, 2009 after drinking heavily for several days and then lied repeatedly to his employer to cover up his actions.
“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.”
The trades landed PVM with a loss of $10 million last summer. The company is the world’s largest independent oil broker, executing trades on behalf of clients but not carrying out trading for its own account.
The FSA said PVM was quick to contact them after it uncovered the trades and made no criticism of the firm in the ruling. A PVM spokesman said the matter was “now fully closed.”
EXPENSIVE ROUND OF GOLF
Perkins’ unauthorized trading pushed the price of Brent crude oil futures up to almost $73.50 a barrel — at that point the highest level prices had hit on the InterContinental Exchange in 2009.
In the days leading up to the trades, Perkins had been drinking heavily at a company golf weekend and had carried on drinking on the Monday afternoon, the FSA said.
Perkins illicit trades started with his telephoning in eight orders to PVM’s Brent trading desk, saying they were all on behalf of a trader described by the FSA as ‘Client A’, who had only ordered one initial deal.
In the early hours of Tuesday morning, Perkins then started to trade Brent crude from his laptop at home, accumulating a total of 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.”
PVM uncovered the trades as clerks and compliance officers came into the office Tuesday morning. Perkins initially lied to the firm, saying Client A had been with him through the night before the company shut off his ability to trade.
via Oil broker banned for drunk trading binge – Yahoo! News.
