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Steve Perkins – Drunk Oil

F T L
2 minute read

A broker named Steve Perkins was called at 7:45AM by a clerk at the firm he worked for, PVM Oil Futures. The clerk wanted to know why Steve had bought 7 million barrels of crude oil during the night.

Apparently, he had traded just over a half a billion dollars, yet he could not remember. He told his firm that he had been trading at a client’s side in the night, but this was a lie. They wanted to speak with this customer, and the lie quickly fell apart.

In reality, he drank so heavily at a PVM golf event that he blacked out by late night. During this blackout, he must have been very confident about his trading abilities. He had actually figured out what he had done just before the call from PVM, and he was trying to figure out what to do about it.

There was nothing to be done.

The aftermath of this was substantial. PVM itself had to back itself out of this huge position. This caused them a loss of nearly $10 million. This is compared to PVM’s typical yearly profit of $12 million from Oil Futures.

It was not only a major event for PVM, but the whole world. In his stupor, Steve’s trading had actually raised the world price of oil. It went to a new eight month high, with a jump of over $1.50 due to his drunken rampage.

In addition, Perkins himself received a fine of £72,000 from the Financial Services Authority. It was going to be double that, but was reduced because it might create financial hardship for Perkins.

The most absurd part of this situation is that Perkins wasn’t even meant to invest PVM’s money, but only the money of clients

So Perkins had been dismantled by this mistake, right? Well, not entirely. Within a year, he was hired by a Swiss firm named Starsupply Renewables in the same industry. The demand for high level traders was so strong that even one of the largest mistakes in history did not sink Perkins’ career.

Traders, take a note from Perkins. Don’t drink too much at the work party. If you ignore this advice, put the laptop away and go to bed. That way your only problem will be a hangover.

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