A former London-based oil broker was fined and banned from working in the industry for five years after the UK regulator said that he made unauthorised trades from home that triggered a spike in oil prices after a weekend of heavy drinking.
The Financial Services Authority fined Steven Perkins, a former oil futures broker at the London-based PVM brokerage, £72,000 ($108,000) for “market abuse” after he took a “very significant” bet of more than $500m in Brent crude oil.
He accessed the market using an internet-based trading platform from his laptop in the middle of the night.
The regulator said that Mr Perkins' explanation for his trading on 29 and 30 June, 2009, was that he was inebriated after he drank “heavily throughout the weekend” on a company's golf party.
He continued drinking afterwards, he told the FSA. “Mr Perkins' account . . . is that he was drunk and was in an alcohol induced blackout.”
The case made headlines last year as Mr Perkins' trading pushed Brent prices to more than $73 a barrel, the highest level of the year up to that date. News of the rogue trading did not filter to the broader market for several days.
The unexplained spike in oil prices prompted concerns about the impact of rising energy prices on the weak economic recovery.
“This trading gave a false and misleading impression as to the supply, demand and price of Brent and it had the direct effect of increasing the price of Brent to an abnormal and artificial level,” the regulator said.
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