'Blackout' trading binge: Drunken broker pushed oil price to 8 month high overnight
Steve Perkins spent $520 million of his client’s cash on oil futures contracts throughout the night during a “drunken blackout". The US Financial Services Authority made this discovery while investigating a mysterious oil price spike on June 30, 2009.
For two hours in the middle of the night, Perkins purchased 7 million barrels of crude, or 69%of the global market, bidding prices higher and higher and bringing them up to $73.05 from $71.40, CNBC reported.
The next morning, an admin clerk called Perkins to ask why he had bought so much crude during the night, but Perkins couldn’t recollect making the trades. Later, after he apparently sobered up and became terrified with what he had done, the broker sent a message to his boss claiming he had to stay at home to care for a sick relative.
By the time PVM realized the transactions had not been authorized by a client investment company, they had suffered losses of $9,763,252, prompting an official investigation. Perkins confessed to having a drinking problem, and had his trading license revoked with a fine of $116,878.
Regulators said that Perkins may have his license re-approved in five years if he stays sober, although they warned that, “Mr Perkins poses an extreme risk to the market when drunk.”