"You'll have to give me a blowjob if you want to make that trade."

My first firm on Wall Street was a bond powerhouse.  As a small broker dealer, unaffiliated with a bank, the FX market was not our forte.  The FX market more so than any other market is a trending market that is driven by flows and deals.  For example a German manufacturer buys an American factory.  The German company will need to pay for the factory in USD, so besides investment banking revenue there may be a large FX trade to do.   This demand for USD will temporarily push the value of the USD up vs. the EUR.  Banks are in a much better position to facilitate these large deals and flows.  Our FX trading desk was decidedly more proprietary, since we lacked most of these type of customer flows.  We did however, have one superstar FX trader, who would go on to be infamous around the street.  Still to this day he is the butt (no pun intended) of several jokes.

Ping Jiang was almost singlehanded responsible for building our firm's Latin American FX desk back up after the Mexican Peso crisis.  He at one point accounted for well over 50% of the firm's FX revenue.  It was therefore a serious blow to the firm when he was poached away by SAC Capital.  The few times I had crossed paths with the man, he struck me as very intellectual and reserved.  He was a man of few words.  My how my opinion would change.

At the end of 2007 a blockbuster lawsuit was announced on both CNBC and www.dealbreaker.com.   Andrew Tong, who was a junior trader in Ping Jiang’s group at SAC, claimed that Ping had forced him to take female sex hormones as well as sexually assaulting him on numerous occasions.  The lawsuit was so salacious that even the EEOC (Equal Employment Opportunity Commission) got in on the act.  Who doesn’t love a good gay sex scandal, complete with forcible sex changes.

Why the female sex hormones you ask?  Tong claimed that Ping forced him to take the drugs in order to feminize him.  He wanted to create the perfect trader.  A man’s intellect combined with a woman’s less aggressive nature.  Sounds like something out of a Frankenstein movie.    He believed that man’s aggressive nature led to poor trading decisions, such as doubling down on losing trades and sticking with losers to long.  Well unfortunately for us that was all the detail that came out at the time.  The court filings were sealed, and in 2008 Ping was actually fired from SAC, but not for the reasons you might think.  He was fired in 2008 for poor performance.  He stopped making enough money.  Then in late 2009, just in time for Christmas, we got the details we all so sorely wanted. 

Apparently the female sex hormones were part of a broader training program, which Ping insisted that Andrew adhere to in order to stay employed at SAC.  Andrew was told that SAC was aware of Ping’s training methods and they approved.  Ping had complete leeway to do as he liked as long as the group made money.  If Andrew were to tell anyone about his training program or trading style of the group, he would be fired immediately.  Andrew reluctantly agreed to the deal.  Ping had personally recruited him from rival hedge fund Stark and he had already quit his job.  What else was Andrew required to do as part of the training program?  I am glad you asked. 

• Ping required Andrew to wear subtly female attire during business hours, which included blouses, slacks, shorts, and open-toed sandals.  After hours Ping ratcheted it up a notch, Andrew was required to wear bras and panties, blouses, skirts, and high heels.

• Ping would often require Andrew to accompany him into an empty conference room after hours and model various outfits for him as well as put on full make-up.  During which time he would comment on his sexiness, or lack thereof.

• Andrew was required to grow his hair long and wear make-up such as lipstick and nail polish.

• Ping would refer to Andrew in the workplace as “miss”, “whore”, “piece of shit”, or “stupid girl”.

• Ping would often pinch Andrew in the buttocks in front of co-workers.

• Andrew’s picture on the SAC intranet was replaced with a picture of him in feminine attire and make-up.  It was later quickly taken down.

• Ping insisted that Andrew perform oral sex on him in order to initiate trades.  Saying, “You’ll have to give me a blow job if you want to make that trade.”

• Ping during one training session tied Andrew to a chair and urinated into his mouth.  (Editor’s note:  This seems consensual to me.  There is no way anyone could pee in my mouth unless I let them.)

• One training session Andrew told Ping that he was no longer going to take the female growth hormone, because his wife wanted a baby and he was having trouble getting an erection.  Ping responded by tying Andrew to a chair, choking him, and inserting a marker from the white board into Andrew’s rectum to show him that he could indeed still get an erection.

• Andrew also alleges on multiple occasions Ping assaulted him.

The purpose of all this abuse was purportedly to break Andrew down before Ping could build him back up into the ideal trader.  Andrew Tong was eventually fired from SAC in 2006 for poor trading.  His firing led to the allegations against Ping surfacing.  Tong alleges that Ping set him up, and that the losses he (Andrew) suffered in CYD stock (which were the grounds for his dismissal) were the results of Ping trying to manipulate the stock and create more profits.  These allegations set off not only an EEOC suit, but claims of insider trading.

For the full unsealed allegations check out http://www.scribd.com/doc/23662651/Andrew-Tong-Filing

I guess it just goes to show that beneath a quiet exterior, a raging pervert may be fighting to get out.  On Wall Street the rule is if you make a firm enough money, they will allow you to let your inner freak flag fly.  Ping Jiang went on to set up Ping Capital, a very successful hedge fund specializing in emerging markets.  He is still widely considered one of the best macro traders in the market.  See this recent interview on Opalesque TV.  Andrew Tong has not resurfaced.