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PVM Oil Futures Limited said on Friday Steve Perkins, a senior broker based at the firm's London office, was responsible for unauthorized trades earlier this week which landed the firm with a loss of nearly $10 million.
The London-based brokerage said Perkins had taken the positions in Brent crude futures early on Tuesday.
The heavy buying during the Asian trading day when volumes tend to be lower caused global crude prices to spike to their highest level this year.
Traders and analysts initially struggled to explain the price move.
Brent was trading at about $66 a barrel on Friday, down from the high of $73.50 struck on Tuesday.
After discovering the trades, PVM said in a statement on Thursday it had closed them out "in an orderly fashion," resulting in losses approaching $10 million.
It said its brokers were not authorized 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.
PVM confirmed Perkins was a Brent crude futures broker, but declined to discuss his possible motivation for the unauthorized trades.
The brokerage said on Thursday PVM was conducting a full investigation and it had informed the Financial Services Authority (FSA), Britain's regulatory body, as well as the InterContinental Exchange (ICE), where the majority of Brent futures trade takes place.
PVM is the world's largest independent broker, trading more than 100 million barrels of over-the-counter and oil futures a day on average.
The company said it had met all margin calls caused by the unauthorized trades and was conducting business as usual.
In May, the FSA banned a former Morgan Stanley trader who built up a hefty unauthorized oil futures position following a long liquid lunch, before hiding the deals overnight.
Regulation
Excessive speculation in oil and commodities markets has been high on the regulatory agenda since crude prices soared to a record of nearly $150 a barrel last July.
PVM head David Hufton has been an outspoken critic of oil market speculation, describing some exchanges as "electronic oil casinos" that boost the price of oil.
Oil analysts said this week's events could add further ammunition to those already pushing for tighter regulation on futures exchanges and over-the-counter markets following last year's price surge and the global financial crisis.
The U.S. government wants to boost oversight of commodity markets and expand the power of the Commodities Futures Trading Commission (CFTC), including looking at tightening the number of speculative positions any one firm or trader can hold.
Analysts said the FSA was expected to follow any moves to reduce position limits taken by its U.S. counterpart in commodity markets.
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Data is a real-time snapshot *Data is delayed at least 15 minutes