“Mr Perkins poses an extreme risk to the market when drunk.”
'Drunken' Broker Sent Oil to 8-Month High in 2009: Report
Published: Thursday, 27 Sep 2012 | 1:56 PM ET
By: James Burgess
Oilprice.com
On June 30, 2009, oil mysteriously jumped by more than $1.50 a barrel during the night, to reach its highest price in eight months, the kind of swing that is caused by a major geopolitical event.
The amazing, true cause of this price spike has now been released by a Financial Services Authority investigation (FSA).
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, the FSA said.
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.” |
