Former Oil-Futures Broker Fined for Trading Abuse While on Drinking Binges

The U.K. financial regulator fined a former broker at PVM Oil Futures Ltd. 72,000 pounds ($108,000) for trading without client authorization and lying to his employer about it while going on drinking binges.

The Financial Services Authority also banned Steven Perkins from working in the financial services industry for five years. Perkins traded on the ICE Futures Europe exchange “in the early hours of the morning” in June 2009 without client authorization, the FSA said in a statement today. He “drank excessively” over the weekend and the day of the trades, the regulator said.

“Perkins’ drunkenness does not excuse his market abuse,” said Alexander Justham, director of markets at the FSA. “Perkins has been banned because he is not a fit and proper person to be involved in regulated activities and his behavior posed a risk to the proper functioning of the market.”

Perkins’ job was to trade orders on an execution-only basis in Brent Crude Futures contract on the ICE exchange for his firm’s clients. He traded “in extremely high volume” on the exchange in August, accumulating a long position in Brent in excess of 7,000 lots, or more than 7 million barrels of oil, the FSA said.

Perkins’ trading inflated the price of Brent to an artificial level and he “repeatedly lied to his employer in order to try and cover up his unauthorized trading,” the FSA said.

Perkins agreed to settle the case and qualified for a 20 percent discount under the FSA’s settlement procedures. The regulator also reduced his fine because of his financial circumstances.

The FSA said that Perkins joined a rehabilitation program for alcoholics and stopped drinking after the incident. A number for Perkins or his attorney wasn’t immediately available from the FSA.

To contact the reporter for this story: Lindsay Fortado in London at lfortado@bloomberg.net.

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