Drunk broker boosted oil prices for eight months in 2009
While most people would agree with the sage advice not to drink and drive, the same could generally be said for mixing drinking with just about any activity. Former senior broker at PVM Oil Futures Steve Perkins learned this the hard way.
The broker managed to spend $520 million of company funds on oil futures the night of June 29, 2009, despite having no authority to do so. The following morning, when asked about the expenditure by an admin clerk, Perkins had no recollection of the purchase.
A recently released report by the Financial Services Authority (FSA) concluded the trades were made in a “drunken blackout.”
Perkins ultimately purchased 69 percent of the global market between the hours of 1:22 a.m. and 3:41 a.m. causing the price of oil to jump $1.50 per barrel, “the kind of swing that is caused by a major geopolitical event,” CNBC notes.
The global barrel price went from $71.40 to $73.05, as Perkins bid higher and higher each time.
Upon sobering up and presumably realizing what he had done, Perkins messaged his boss that he would not be able to make it to work due to an unwell relative.
PVM Oil Futures lost nearly $10 million when the company eventually realized the trades had not been made on the account of a client.
Perkins had his trading license revoked for five years and was served with a fine of $116,878 after an official investigation and admitting to having a drinking problem.
“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 reported.
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