FSA fines alcoholic former oil broker £72,000
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The FSA has fined an alcoholic former oil futures broker Steven Noel Perkins £72,000 for market abuse and banned him from working in financial services.
Perkins’ job was to trade orders on an execution-only basis in Brent Crude Futures contracts on the ICE Futures Europe exchange for his firm’s clients.
Perkins’ employer, PVM Oil Futures Ltd, did no proprietary trading, but in the early hours of the morning on Tuesday 30 June 2009, Perkins traded on ICE without any client authorisation.
He traded in extremely high volume in the ICE August 2009 Brent contract and in doing so accumulated a long outright position in Brent in excess of 7,000 lots – representing over 7 million barrels of oil.
As a direct result of Perkins’ trading, the price of Brent increased significantly.
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 has also taken into account the fact that Perkins initially lied repeatedly to his employer in order to try and cover up his unauthorised trading.
The regulator says that Perkins’ trading seems to have been a consequence of extremely heavy drinking resulting from alcoholism, which he now acknowledges.
He drank excessively over the weekend prior to 29 June and throughout Monday June 29.
Immediately following this incident, Perkins joined a rehabilitation programme for alcoholics and he has stopped drinking.
The FSA considers that it is possible that Perkins may be rehabilitated over time and may be fit and proper again in the future.
The ban has therefore been limited to a minimum term of five years.
FSA director of markets Alexander Justham says: “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.”
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Readers' comments (9)
Jon Painful | 29 Jun 2010 11:29 am
What on earth is the FSA doing publicising an individual's medical details? Have they no respect for the confidential nature of such matters?
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Anonymous | 29 Jun 2010 12:33 pm
This is outrageous.
The FSA have no right to disclose this mans medical condition.
No doubt had he been employed at the fsa, he would have been on full pay with medical insurance paying for his rehabilitation.
This poor man obviously needs help and support,. Having these details published, for all and sundry to see, will only add to his and that of his family's agony.
If an IFA let these details be known about a client they would not last two minutes.
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Chris F | 29 Jun 2010 12:35 pm
To be fair, it may be to show people they were only being lenient because of this issue and perhaps it was with the chap's consent?
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Anonymous | 29 Jun 2010 12:38 pm
Come on John Painful, you should know by now the FSA have no respect whatsoever for anyone but themselves and are a law unto themselves. Nothing new there then.
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Tim Cumster | 29 Jun 2010 12:44 pm
as part of the fit and proper checks this is one of the things that the FSA are allowed to disclose as be having a drinking problem you are not deemed to be fit a proper. So the issue whether this is confidential is not an issue, it is part of a check and therefore public knowledge
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Sam B | 29 Jun 2010 3:32 pm
Tim: No, all they actually need to disclose is that he was found not to be fit and proper. They don't need to tell us *why*, just as they don't need to tell us whether he was drinking Jack Daniels or Smirnoff. At most they could have said that he had psychological problems which he would hopefully be able to recover from in the future. To give us the exact details of the binge that led to his downfall, with times and dates, is disgraceful.
And to answer Chris' point, if he did give his consent they should have declined to publish it anyway. If you're escorting a drunk home when he falls into the gutter and moans "leave me here", do you leave him there just 'cause he told you to?
Reminds me of Winston Churchill's legendary response to a lady who accused him of being drunk: "And you are ugly, but tomorrow I will be sober." Well, tomorrow Steven Perkins will be sober, and FSA officials will still be prurient, morally bankrupt busybodies.
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Adam Smith | 29 Jun 2010 3:40 pm
Surely the point is that he advanced his alcoholism as either his defence or a material mitigating factor? It is important to have that personal information about him to understand the outcome of the case, particularly the terms of his prohibition. View this case in the contxt of the size of the deal: "The long outright position of 7,125 lots built by Mr Perkins over the First Period had
a very significant nominal value of over US$520 million." (final notice, para 49).
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Donald Martin | 15 Jul 2010 11:40 am
Who actually receives the monies taken in by the FSA re fines?
Donald
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Anonymous | 15 Jul 2010 12:13 pm
Who works out the fines amount? How do they work it out? I trust it's not done on the basis of "how much do we need to run the FSA this year, inlcuding bonuses, new highly paid staff, etc"
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