Booze query over PVM Oil rogue trader

PVM OIL’S Steve Perkins, the rogue trader who lost the company £6m last week,  may have been under the influence of drugs or alcohol when he went on a dealing rampage.

It is understood that the Financial Services Authority (FSA) is investigating whether Perkins was inebriated when he used his home computer to make trades from 2am, in the early hours of Tuesday morning last week.

The senior broker bought crude futures equal to around 9m barrels in his eight hours of trading frenzy, and caused the price of Brent crude to go up by $1.50 (£0.90) a barrel to $73.5, its highest level this year. It then fell back sharply in volatile trade.

In the time that Perkins was on his spending spree, contracts for 16m barrels of oil were traded, 32 times the normal level, and the equivalent to twice Saudi Arabia’s daily production.

Perkins was suspended when the brokerage discovered the rogue trading late on Tuesday morning.

Saying it was “the victim of unauthorised trading,” PVM announced it was conducting a full investigation, and that it had informed the FSA and the InterContinental Exchange (ICE), where most of Europe’s oil trading takes place.

PVM said its brokers were not authorised to take positions in the crude oil markets.

Oil brokers generally help to match up trading counter-parties such as banks and hedge funds rather than dealing themselves.

The company is the world’s largest independent broker, trading more than 100m barrels of over-the-counter and oil futures a day on average.

PVM’s £6m loss is relatively small compared to some recent rogue trading.

French bank Societe Generale said in January last year that unauthorised trades by a single dealer had caused it a €4.9bn (£4.1bn) loss.

The losses, made by Jerome Kerviel – who was then a junior trader with the bank – resulted in the resignation of the company’s chairman Daniel Bouton.