Rogue PVM broker costs firm £6.1 million

PVM Oil Futures Ltd issued a statement on Thursday after rumours of irregular trading swept through London and Asian oil markets the previous day.

"PVM can confirm that it was the victim of unauthorised trading on Tuesday 30th June," the statement said.

"As a result of a series of unauthorised trades, substantial volumes of futures contracts were held by PVM. When this was discovered, the positions were closed in an orderly fashion. PVM suffered a loss totalling a little under $10 million."

The unauthorised trades on Tuesday are widely believed to have caused global crude oil prices to spike to their highest level in more than 8 months, in a move traders and analysts had previously struggled to explain.

PVM said it was conducting a full investigation and that it had informed the UK Financial Services Authority (FSA) regulatory body, and the InterContinental Exchange (ICE) where the majority of North Sea Brent crude oil futures trade.

The company did not name the person responsible for the trades. It said in its statement: "PVM expects the highest standards of conduct from its people and takes any contraventions of those standards extremely seriously."

ICE declined to comment on the PVM situation, beyond saying its market surveillance team would investigate any unusual trading patterns. The FSA would not comment.

In May, the FSA banned a former Morgan Stanley trader who built up a hefty unauthorised oil futures position following a long liquid lunch, before hiding the deals overnight.

OIL PRICE SPIKE