A former oil futures broker who went on a weekend drinking binge before blacking out and trading more than 7 million barrels of oil has been banned from working in the City for at least five years by the Financial Services Authority (FSA). Stephen Perkins, who worked at London-based oil broker PVM Oil Futures since 1998, was fined £72,000 for market manipulation.
The FSA discovered that Perkins engaged in illicit trading during a 19-hour period on 29 and 30 June 2009. He sent a text message to his boss claiming a relative was unwell to cover his absence. As a broker in Brent crude on the ICE futures market, he was only supposed to execute trades on behalf of clients.
According to the FSA decision notice, Perkins claimed he was drunk and had limited recollection of events, stating he was in an alcohol-induced blackout. He began trading on 29 June purportedly for a client, but only one trade was legitimate. In the early hours of 30 June, he executed a high volume of trades from home, giving a false impression of supply, demand, and price of Brent oil, at times responsible for 69% of traded volume.
The FSA deemed this market manipulation, stating Perkins was not fit and proper to work in the City. Alexander Justham, FSA director of markets, said: 'Perkins's drunkenness does not excuse his market abuse. The FSA views market manipulation extremely seriously.' The fine was reduced from £150,000 due to financial hardship, and Perkins was allowed to pay in instalments.
Perkins joined a rehabilitation programme for alcoholics in July 2009 and has since stopped drinking. The FSA said the five-year ban gives him a chance to rehabilitate, and the prohibition may be revoked after that period.
