CITY watchdog the Financial Servies Authority (FSA) has fined and banned a former PVM Oil Futures broker for manipulating the price of oil last year by the unauthorised purchase of more than 7m barrels while drunk.
The FSA said in a statement it had fined Steven Noel Perkins £72,000 and banned him from working in the financial services industry for at least five years for buying huge volumes of Brent crude oil without client authorisation.
“As a direct result of Perkins’ trading, the price of Brent increased significantly,” the FSA said in a statement. “Perkins’ trading manipulated the market in Brent by giving a false and misleading impression as to the supply, demand and price of Brent and caused the price of Brent to increase to an abnormal and artificial level.”
The FSA said that in the early hours of Tuesday 30 June 2009, Perkins traded in “extremely high volume” on the ICE August Brent crude oil future contract, accumulating a position equivalent to over 7m barrels of oil.
Perkins had been drinking extremely heavily over the weekend prior to 29 June and had continued drinking through Monday before executing the trades, the FSA said. Since the incident Perkins has joined a rehabilitation programme for alcoholics and has stopped drinking.
“The FSA views market manipulation extremely seriously. Perkins’ trading caused disruption to the market and has been met with both a fine and prohibition,” said Alexander Justham, director of markets at the FSA .”This reinforces the fact that a severe sanction will apply in cases of market manipulation, even where no profit is made. Perkins’ drunkenness does not excuse his market abuse. 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.”
City A.M. Reporter