As a junior trader at the now-defunct hedge-fund company Galleon Group LLC, Turney Duff was surprised by how eagerly he was courted by securities-firm salesmen.
He later concluded that in their hunt for commissions, Wall Streeters buy options on people much like options on stocks.
“Today I might not be the head of the desk or control most of Galleon’s order flow, but it’s in their best interest to befriend me early in my career,” he writes in his absorbing memoir, “The Buy Side.” “Take care of me now, and I’ll remember you later.”
Taken care of he was, with nightly business dinners, all-expenses-paid junkets to Miami, Las Vegas and the Super Bowl, and lines and lines of cocaine from brokers he traded with.
He frequented an East Side apartment he calls the White House, “but it’s more like a Wall Street crack house.”
“They like to please all of their clients,” he writes. “Tonight they were kind enough to order in: Chinese and Mexican escorts.”
The all-night alcohol and Bolivian Marching Powder binges had a subprime effect on his career.
Duff’s 308-page account provides a timely window into practices that have been a focus of federal prosecutors. His spectacular fall is also perplexing, as he initially comes off as smart, albeit green.
After graduating from Ohio University with a degree in journalism, he pursued finance after failing to land an interview at newspapers or magazines.
“I have no idea what Goldman Sachs (GS:US) is,” he writes of his young self when he hears the name from a buddy. “It sounds like a fancy department store.”
With help from an uncle, he landed a job as an assistant in private-wealth management at Morgan Stanley. (MS:US) He didn’t show an interest in security analysis, but excelled at introducing senior male traders to attractive young female assistants at a bar and in planning a staff party to boost morale.
He moved on to Galleon in 1999, where he went along with the sleazy practices that eventually helped bring down the firm. (Co-founder Raj Rajaratnam is serving an 11-year prison sentence after being convicted in 2011 on 14 counts of conspiracy and securities fraud.)
Part of Duff’s job was to place a multitude of trades, even losing ones, to generate commissions for securities firms so that, in return, they would offer access to hot initial public offerings and early word on analyst upgrades.
He says Rajaratnam and co-founder Gary Rosenbach oversaw a bullying culture.
“Belittling was a way of life there,” Duff writes. “Always politically incorrect, Raj and Gary one day walked into the office with a dwarf, whom they introduced as an analyst hired to cover ‘small-cap stocks.’” Douglas Koff, a lawyer for Rosenbach, declined to comment.
Duff doesn’t whitewash his own conduct. At Argus Partners, where he moved after about two years at Galleon, he said broker contacts helped him manipulate stocks to boost year-end performance.
“The more stocks I can rip today, the better our number will be for the year,” he writes.
Duff names names, to a point. The men who live in the cocaine-filled White House, for example, are identified by the pseudonyms Randy and James. Their employers aren’t disclosed.
While he portrays himself as courtly with women, his descriptions may strike some as jarring. Take his account of learning about Meredith Whitney’s 2007 call that Citigroup Inc. would suspend its dividend.
“Initially I find out a few things about her: she’s hot, she’s a cougar” and she looks like someone he wouldn’t mind getting to know better.
Duff doesn’t delve into the cause of his drug and alcohol-fueled implosion, which starts like a scene from Jay McInerney’s novel “Bright Lights, Big City” and descends from there. He says a diagnosis of low-grade depression he received later in life may have actually helped him trade.
“The old adage on Wall Street is ‘Don’t get too emotional,’” he writes. “I never have that problem. I never get angry when a stock goes against me, and neither do I get too excited when ones goes up. People around me see this as a kind of cool-hand detachment, but I really don’t have control over it. And it gives me a clarity that many other traders lack.”
With his marriage and career kaput and finances a mess, Duff left Wall Street for an endeavor he prefers -- writing.
Given the promise of “The Buy Side” and the corners he cut in finance, it was a wise trade.
“The Buy Side: A Wall Street Trader’s Tale of Spectacular Excess” is published by Crown Business (308 pages, $26). To buy this book in North America, click here.
(Philip Boroff writes for Muse, the arts and leisure section of Bloomberg News. Any opinions expressed are his own.)
Muse highlights include Ryan Sutton on dining and Katya Kazakina on art.
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