A rogue trader was banned from working in finance today after he manipulated the world oil market following a weekend of golf and alcohol.
Steve Perkins drank so much he was “not capable of assessing the consequences of his actions”, the Financial Services Authority ruled.
He made thousands of trades worth a total of $520 million (£345 million). The price of Brent crude oil soared by $1.50 to $73.50 — the highest so far that year.
The deals ended up costing his company, PVM Oil Futures, £6 million — equivalent to a year’s profits. He was sacked immediately.
Today, finding him “not a fit and proper person” to work in finance, the FSA banned him for a minimum five years and fined him £72,000. It said he had suffered an alcohol-induced blackout.
Asked about Mr Perkins, one trader at a rival firm joked: “He is a sociable guy. Well oiled, you might say.”
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. The trades attracted the attention of rivals, the media and the regulators but had not been explained until today.
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.”
The last transaction in his spree was made at 3.41am on June 30. In all, he bought futures contracts equivalent to nine million barrels of oil. He also sold about 2.5 million in futures. PVM did not discover the rogue trades until Tuesday morning. It dumped them as soon as it could with the price falling, at a cost to the firm of £6 million — a year’s worth of profits.
The authority noted: “Mr Perkins’ behaviour was contrary to PVM’s policies and procedures … Mr Perkins’ trading seems to have been the result of extremely heavy drinking resulting from his alcoholism.”
He has since joined a rehabilitation programme for alcoholics. After five years he can apply to the FSA for the ban to be lifted. The authority would have to decide whether he is still a risk. Alexander Justham, director of markets at the authority, said: “Perkins’ drunkenness does not excuse his market abuse.”
However, the case does not compare with that of Nick Leeson, who brought down Barings Bank in the Nineties after making deals that led to losses of £827 million. Leeson, who was sent to jail, left a note saying “I am Sorry.”
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