Well-oiled rogue trader gets £72,000 fine from FSA

The trader bought 7m barrels of oil while he was drunk - and can't remember any of it.

Last Updated: 31 Aug 2010
Most of us have woken up nursing a sore head and a few black holes in our memory of the night before. But spare a thought for a former oil futures trader Steven Perkins, who has been banned from trading and hit with a £72,000 fine after he lost his company £6m by buying more than seven million barrels of oil during an ‘alcohol induced blackout’. Perkins had enjoyed after a heavy golfing weekend with his company, PVM Oil Futures, and then carried on drinking the next day before deciding to do a bit of trading. Now he claims he can't even remember losing this vast sum. A cautionary tale...
According to documents released by the Financial Services Authority, Perkins ‘drank heavily’ during a Monday he was given off work after his weekend away. That evening, he made a whopping $520m worth of trades, single-handedly sending the price of Brent Crude up by more than $1.50 to $73.50 (the highest it had been for eight months) in just half an hour around 2am. At one point, Perkins was responsible for 69% of global trades of Brent crude, apparently losing companies worldwide more than £100m.
Perkins didn’t exactly help matters by sending a text message to his managing director asking for a day off because a relative was unwell. An hour later, when a PVM admin clerk rang to ask where the $520m had gone, he claimed to have been with a client at the time the trades were made. Unfortunately, Perkins’ story rather fell apart when he couldn’t put his desk in touch with the ‘client’ in question to officially approve his story. By the time it realised what had happened, PVM had built up losses of $9,763,252.
It may be an amusing story (although not for PVM, which only managed to claw back about £4m of its losses - for a company with a $12m revenue, that’s potentially catastrophic), but it does paint a slightly alarming picture of the ‘work hard, play harder’ culture in the City. Last year, the Financial Times reported that cocaine use in the City was on the rise, while rehab chain The Priory estimated a 20% increase in the number of inquiries from people working in the financial sector. It's a high=pressure environment with temptations all around - and since the consequences are potentially so serious, that adds up to a very real problem for City employers.
The good news is that Perkins has promised to receive treatment for alcohol addiction. Still, even for a seasoned drinker, being sauced-up enough to buy 7m barrels of oil but having the co-ordination to login to the trading software, type in the numbers and press the ‘buy’ button is a fairly impressive feat…

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