Although not authorized to invest company cash in trades, Steve Perkins, a long standing, senior broker at PVM Oil Futures, had managed to spend $520 million on oil futures contracts throughout the night of June 30, 2009, the FSA said today. On the morning of the 30th, an admin clerk called Perkins to ask why he had bought 7 million barrels of crude during the night. Perkins had no recollection of the transactions, and it turned out that he had made the trades during a “drunken blackout,” according to the FSA. By the time PVM realized the transactions had not been authorized by a client, they had incurred losses of $9,763,252. Between the hours of 1:22 a.m. and 3:41 a.m., Perkins gradually bought 69 percent of the global market, while driving prices up from $71.40 to $73.05, by bidding higher each time. At 6:30 a.m., presumably sobering up and realizing what he’d done, he sent a message to his managing director claiming an unwell relative meant he would not be able to make it into work. Following an official investigation Perkins admitted to having a drink problem, had his trading license revoked for five years, and was given a fine of £72,000 ($116,878). The FSA has said that they will re-approve his license after the five-year period, if he has recovered from his drinking problem, although they warned that,“Mr Perkins poses an extreme risk to the market when drunk.” [CNBC, earlier]
I’m not promoting alcoholism, but like so many things in life, there are some activities many of you are better at while under the influence. Sadly, in London, one guy had to ruin it for the whole group. Steve Perkins, the oil trader who bought 7.13 million barrels of crude oil on behalf of his firm after “a drunken golf weekend” has been fined £72,000 and banned from the industry for a minimum of 5 years.
The 34-year-old, who lives in Brentwood, was a senior trader for PVM in the West End when he went on his spree last June. Working from a laptop at home after a weekend playing golf, he was able to move the oil market by engaging in huge amounts of speculative buying at ever-higher prices. In a statement, the FSA said: “Mr Perkins’ explanation for his trading on 29 and 30 June is that he was drunk. He says that he drank heavily throughout the weekend and continued drinking from around mid-day on Monday 29 June. He claims to have limited recollection of events.”