London broker banned after drunken trades hiked oil price
The City of London watchdog has handed a five-year ban to a rogue oil broker who made unauthorised trades that caused a spike in oil prices after a weekend of heavy drinking.
Stephen Perkins was also hit with a 72,000-pound (110,000-dollar, 90,000-euro) fine following his actions that cost his company, PVM Oil, more than six million pounds.
The Financial Services Authority (FSA) regulator handed down the punishments Tuesday over the incident in June last year in which Perkins drunkenly bought millions of barrels of oil, which pushed up the price of Brent crude more than two dollars to an eight-month high.
"Perkins' drunkenness does not excuse his market abuse," said Alexander Justham, the Financial Services Authority (FSA)'s director of markets.
"Perkins has been banned because he is not a fit and proper person to be involved in regulated activities and his behaviour posed a risk to the proper functioning of the market."
The unauthorised trading took place after a drinking binge at a PVM golf weekend. Perkins continued drinking at the start of the week and the most serious damage was done in the early hours of Tuesday.
The broker drunkenly purchased a net 7.13 million barrels of oil and the unusually high trading volume in the typically quiet overnight period sent prices surging.
He eventually admitted what he had done to PVM, which suspended his trading access, fired him and sold off the rest of the oil. Perkins claimed that he was in an alcohol-induced blackout when he made the trades, according to the FSA.
The regulator made no criticism of PVM.
© 2010 AFP