Oil broker banned for drunk trading binge

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, $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…

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…

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…

The ruling marks only the second action by the FSA against market abuse in commodities in London…

“I suspect they’re trying to seem tough, to look like they’re doing something,” one broker said. “I remain unconvinced they truly understand commodity markets or can get to grips with them.”

What do you think the odds might be, say, of the SEC walking into the NYSE some Monday morning and having traders pee in a cup – to check for cocaine?

Har!

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