July 2, 2010 / 4:24 PM / 7 years ago

Banned drunken broker to join Starsupply in Geneva

4 Min Read

* Recovering alcoholic given second chance in Geneva

By David Sheppard

LONDON (Reuters) - The British oil broker banned this week for manipulating crude prices during a drunken trading binge has been hired by Geneva-based commodity firm to help train graduate recruits, the company's CEO said on Friday.

Steven Perkins, who was slapped with a 72,000 pounds ($105,000) fine and a minimum five year ban from the industry by the British financial regulator, will join Starsupply Renewables SA, the world's largest biofuels brokerage.

"We believe Steven Perkins is a good man, who did a stupid thing," said Kevin McGeeney, the CEO of Starsupply in an emailed statement.

"Mr Perkins has been known to one of the co-founders of Starsupply Renewables for over 15 years. Starsupply Renewables and Mr Perkins fully intend to respect and voluntarily uphold the recent judgment of the FSA, the UK's financial services regulator."

McGeeney said Perkins will not be engaged in any regulated market activities or trading, and will instead start off by helping to write training materials for graduate recruits.

Perkins's previous employer PVM Oil Futures Ltd lost nearly $10 million as a result of his unauthorized trades last year.

The price of Brent crude oil spiked to almost $73.50 a barrel after Perkins intentionally bid up the price on his laptop at home following a boozy company golf weekend.

"The damage caused by Mr Perkins actions over a year ago was substantial and we empathize with those affected. However, we believe in rehabilitation. We want to give Mr Perkins an opportunity to rebuild his career in a different direction," McGeeney said.

Starsupply Renewables is the world's largest biofuels brokerage company and is part of the SCB Group. The company has offices in Geneva, Chicago and Buenos Aires.

Since the incident, Perkins has quit drinking and has been attending an alcohol rehabilitation program, McGeeney said. The Financial Services Authority reduced Perkins initial fine from 150,000 pounds as it said it would cause him "serious financial hardship."

The Swiss financial regulator FINMA said it was not its role to police commodity trading that generally takes place electronically on exchanges in London or New York, unless an individual was dealing with small retail clients.

"The physical oil market is not regulated anywhere in the world and the trading of paper oil, of derivatives or securities is regulated by the exchanges," said Tobias Lux, a spokesman for FINMA.

"We don't have any exchanges where futures for commodities are traded so it is really none of our business."

Privately-held commodity firms are big business in Geneva.

So many energy and commodity traders have moved there since the financial crisis, attracted by special tax rates and high quality of life readings, that the small Swiss city is struggling to find housing to accommodate them.

The ICE Futures Europe Exchange, where Perkins spiked the price of Brent crude oil, was not immediately available for comment.

To trade oil for clients on the NYMEX futures exchange in New York, all brokers and traders must be cleared by the National Futures Association (NFA). The NYMEX exchange can also bar individuals if it believes it is necessary.

Reporting by David Sheppard; editing by William Hardy

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