Remember the first time you were grounded? Or the first time you were suspended from school? Or the first time you violated your probation? Surely, none of these firsts amount to the epic, awesome carnage Steven Noel Perkins — an oil futures trader — wrecked after (what else?) a weekend of hard drinking. To the tune of $520M.
The Toronto Star reports today on Mr. Perkins, a British guy who got entirely too ‘faced, and traded $520M after a weekend golf retreat. It doesn’t say how many transactions he made on behalf of his client, but it does say that only one of them was authorized. The company he was trading, Brent Crude Futures, actually saw a $1.65 shift in their global price overnight explicitly because of Perkins.
With what little you know about the markets, though, you probably understand that this is like showing up to work and seeing the ground beneath the building you work in moved 10 feet out over the sidewalk. This is like the ultimate Dude, Where’s My Car? moment:
Most of his first batch of trading “involved him continuously entering bids at levels higher than the prevailing best bid in the market with the direct effect of increasing the price of Brent,” the FSA said.
Perkins initially lied repeatedly about the trades but later admitted he had been drunk, went through an “alcoholic blackout” and remembered little of the binge.
Hey, man. We’ve all been there. Actually, none of us have been there. And now Perkins is banned from trading. For five years. Partly because this all resulted, of course, in a $10M loss for Perkins’ company. Only $10M, somehow.
Perkins went into alcohol rehab in July 2009. He can reapply to the FSA to win back his broker’s licence in five years.
Incidentally, I once knew this kid — also, last name, Perkins — who went to a regional youth group event and drank from this liter bottle of Sprite that was 3/4th filled with vodka, and he carried it around with him the entire weekend. At one point, he woke up in the woods and literally did not know his own name. He ended up going to the University of Arizona, which is apparently a much safer route than wherever one goes to trade oil futures.
Anyway. This jam goes out to Mr. Perkins, and every Mr. Perkins like him:
UPDATE: The post originally implied that Perkins had lost $520M; that’s not the case. He only lost $10M, but he did trade over $520M in futures over a 19 hour period. Either way, you get the idea: Bad. Idea. Jeans.