London's Cocaine Survivors

The financial bust has forced some addicted traders and bankers to come clean. Many of their colleagues remain mired in the culture of booze and coke.

By Stephanie Baker and Thomas Penny
Bloomberg Markets, November 2009

Neill Junor remembers the exact moment he decided to quit snorting cocaine. On a chilly December afternoon in 2005, the former equities analyst took a stroll in London’s deer-filled Richmond Park to select the tree from which he would hang himself.

The decision to step back from the brink marked the end of a six-year binge of drug and alcohol abuse that by then had cost Junor his marriage and a career that paid him as much as 1 million pounds ($1.7 million) a year. He was out of work, having already walked away from both his analyst job at BT Alex. Brown and a subsequent position in a dot-com venture. “I burned through everything,” Junor says. “I knew there was a choice -- and the choice was to hang from that tree or not.”

His story reflects the cocaine use that medical experts say is rampant in the City, London’s financial district. It’s a habit that often goes hand in hand with heavy drinking. Junor says he and his mates wanted to maintain the thrill they felt at work as they poured into the Square Mile’s pubs and clubs after a day of getting high on finance.

“It’s the same rush from doing a deal and doing cocaine,” Junor, 45, says. “The adulation from doing a deal spills into going for a beer and then a party -- it’s an amorphous blob of energy.” Everyone knows about the City’s drug problem, recovering addicts say. Bosses turn a blind eye to drugs, as long as you’re making money for your firm -- and until recently, making big money was easy to do.

Cocaine Culture

Professionals in the detox business say bankers have swamped them with calls since the financial crisis widened a year ago. The Causeway Retreat, an addiction and mental health hospital for professionals on a secluded island 40 miles (64 kilometers) east of London, has 15 people on the waiting list for its 18-bed facility.

While few walk away from addiction as dramatically as Junor, some bankers are questioning whether the diminished rewards of the City are worth sacrificing their health, says Philip Hopley, a psychiatrist who runs a clinic at the Lloyd’s of London insurance building to be in the neighborhood where his patients work.

“Doing cocaine or drinking heavily is part of the City culture; you work hard and you play hard and you get rewarded because your bonus is fantastic,” says Hopley, a consultant at The Priory, a group that runs several mental health centers. When the bonuses are cut and many of your friends lose their livelihoods, things no longer look so good.

Brain Rush

“A number of people now tell me: ‘I finally realize what a shit job I have got,’ ” Hopley says. “ ‘If it wasn’t for the bonus, I wouldn’t be working these hours and I wouldn’t be working with these people.’ ” The number of people in the finance industry coming to see him has jumped by about 15 percent this year, he says.

Scientists say it’s no accident that trading and cocaine sometimes go together. Both involve taking risks and have a similar effect on the brain. Each activity raises dopamine levels, the organ’s feel-good chemical, according to Trevor Robbins, professor of cognitive neuroscience at the University of Cambridge. Dopamine surges when we take risks, such as going sky diving, betting on stock price movements or hiding in an office rest room and snorting a line of coke.

Studies show that people who take risks have low levels of dopamine receptors and try to shock the brain into a boost of the chemical through novel situations. They’re also more likely to become addicted, Robbins says.

City Casualty

Those who don’t seek help fast enough, like investment manager Melvin Sabour, can become high-profile casualties.

Sabour, a managing director of AKN Investments Ltd., died of a cocaine overdose in February. Sabour was depressed over losses at his privately held firm, his girlfriend Kyara Dekker told an April inquest into his death. She discovered Sabour, 44, unconscious in the apartment they shared in Mayfair, the neighborhood of townhouses and luxury stores that’s home to money managers such as GLG Partners Inc. and Moore Capital Management LLC. Sabour was pronounced dead by paramedics at the scene. A postmortem examination found that Sabour had a lethal level of metabolized cocaine in his blood and attributed his demise to drug­triggered heart failure.

“Cocaine can and does have a bad effect on the heart and it is quite a significant cause of death in men of younger age in this area of London,” coroner Paul Knapman told the inquest that determined the cause of Sabour’s death.

‘Bamboozled’ by Abuse

Drugs and alcohol played a role in the death of Darren Liddle, a 26-year-old fixed-income analyst at Credit Suisse Group AG in London in September 2007. Liddle, who spent two stints in a psychiatric hospital, went on a cocaine and alcohol binge at the Hilton hotel on London’s Park Lane just weeks after leaving the hospital for the second time. He sat on the ledge of his 19th-floor room, shaking and crying, for more than two hours before jumping to his death.

A coroner told an inquest in January 2008 that job pressures may have contributed to Liddle’s addictions. Credit Suisse declined to comment on the incident. Liddle’s father and brother didn’t respond to e-mails.

“Medical people are absolutely bamboozled by the level of abuse going on in the City and the extreme level of cocaine consumption,” says Brendan Quinn, The Causeway’s chief executive officer and a specialist nurse in recovery treatment. “More and more people are coming in, putting their hands up and saying: ‘I’ve got a problem and I need help.’ ”

Bonus Binge

The spread of cocaine in the City is driven by ample supplies at cheap prices. Cocaine, the glamour drug for jet- setters in the 1980s, has dropped in price to about 40 pounds a gram from almost 70 pounds a gram in 1997, according to figures from the U.K. Home Office. The price drop reflects dealers’ success in diluting the product and opening up new supply routes, authorities say.

The number of cocaine users in the U.K. has doubled to 1 million in the past decade, according to the United Nations World Drug Report 2009. The UN says British cocaine use peaked in 2007 -- the year after City bonuses reached a record 8.8 billion pounds. While bonuses will plummet more than 60 percent from that high to 3.2 billion pounds this year, the London-based Centre for Economics and Business Research Ltd. predicts, there’s still plenty of money to buy cheap coke.

Some recovering addicts seek help in the company of others secretly struggling with a drug habit. On a rainy day in July in the wood-paneled vestry of St. Michael’s Church, a stone’s throw from the Bank of England, about a dozen bankers and traders sit around a mahogany table, talking about their addictions. With an antique wooden clock ticking in the background and takeout sandwiches on the table, men in pinstripe suits and women in conservative dresses -- using first names only -- share stories of the daily challenge of keeping clean.

After-Work Challenge

One equities salesman and recovering addict at St. Michael’s says the greatest challenge to keeping clean comes at the end of a workday. “I could take you to four or five pubs a few minutes from here, walk up to the bar and buy a pint and a gram of coke,” says the man, who asked that he not be identified. “If you continue using, you become suicidal.”

A short underground train ride away, on a warm Thursday evening in August, thousands of bankers spill out of pubs and restaurants in London’s Canary Wharf, clutching cold beers and mixed drinks. At a bar around the corner from the London headquarters of Citigroup Inc., Credit Suisse and Morgan Stanley, a man repeatedly brushes his right nostril with his thumb while waiting for the barman. In the men’s restroom at the back of the bar, there’s a smudge of white powder on the wooden lid of the toilet. When the lid is wiped with a cloth from London-based testing company Drug-Aware Ltd., a bright-blue spot emerges, indicating a positive cocaine sample.

Tabloid Coverage

City bankers are merely a part of Britain’s culture of hard living. In September 2005, London’s Daily Mirror newspaper published photos purporting to show model Kate Moss snorting cocaine along with her then-boyfriend, musician Pete Doherty. Moss lost contracts with Burberry Group Plc and Chanel SA after the incident and attended a rehabilitation clinic in Arizona. Police didn’t charge Moss after questioning her about the incident.

At least one cocaine user at a financial firm was brazen enough to deal the drug from his desk. David Frith, a 28-year-old banker who worked at Barclays Plc’s office in Basingstoke, England, was convicted in 2007 of selling drugs from his desk and received a jail sentence of seven and a half years.

Tracking Drug Deals

Police listened to Frith’s phone calls, which had been routinely recorded by the bank, and tracked his drug runners, according to a police spokesman. Barclays declined to comment on the incident. Frith’s Basingstoke-based solicitors, Talbot Walker LLP, declined to comment.

For some, the only escape from addiction is to quit their City career. Five years ago, Seth Freedman was a 24-year-old private-client broker executing equities trades for wealthy individuals when his coke habit became all-consuming. His dealer would roll up to his office in a station wagon with his latest stash.

“I was buzzing at work because of flickering screens, and I was managing lots of money,” Freedman says, as he smokes a cigarette and nurses a glass of water at a pub in North London. “When the market shuts, how do you keep that buzz going?”

In 2004, Freedman was sitting on the roof terrace of Coq d’Argent restaurant, in the heart of the Square Mile, with both a 30-year-old receptionist and a 16-year-old bottle of Lagavulin single-malt Scotch whisky in his lap. Thanks to the coke in his nose, he felt like the king of the City. Yet he woke up the next morning sporting two bleeding nostrils and a determination to get out of his drug hell.

‘Money Worship’

“I didn’t want to be caught up in the vicious circle of money worship by day, hard drugs by night, and little to no structure past the next trade I put on or the next gram I scored,” he says.

Instead of checking into rehab, Freedman decided to join the Israeli army -- solidifying his connections with a country he had regularly visited as a child. In a 15-month tour, he used the enforced discipline of the military to get fit, learn to work as a team member and find a higher purpose than money. Freedman quit the Israeli army in 2006, disturbed by his stint in the West Bank, to write a book about his experiences called Binge Trading: The Real Inside Story of Cash, Cocaine and Corruption in the City (Penguin, 2009).

Freedman says City bosses push employees to take a short- term view on both trading and living. “You’re encouraged to be a gambler and a risk taker,” he says.

Middle-Class Secret

Junor, the addict who decided to seek help rather than hang himself, says his addictions thrived in the City. In 1999, he was earning 1 million pounds a year as an analyst at BT Alex. Brown and enjoying boozy lunches with clients. At that point, he only dabbled in cocaine.

“Everyone knew I had a drinking problem when I was in the City,” Junor says. “There were a couple of times where I showed up to meetings pissed, but that was Neill.”

After Deutsche Bank AG took over BT Alex. Brown in 1999, Junor helped establish the digital unit at Emap Plc, the U.K. publishing company that he had covered as an analyst. He began using coke heavily as he jetted between homes in Los Angeles, London and New York.

“I had a fire in me that was alcoholism and it had an accelerant thrown on it that was cocaine,” he says. “Cocaine allows you to keep drinking; it sobers you up.” He quit the publisher in 2001 and continued taking cocaine while living in a West London penthouse loft.

“I’d go to dinner parties where the host was chopping up a big line of coke on the cheese board,” he recalls. “Cocaine is London’s middle-class dirty secret. It’s pervasive.”

Rural Retreat

Junor sought treatment in a rehab center in southwest London without success. Then he tried yoga and Alcoholics Anonymous, attending 90 meetings in 90 days in 2006. He’s been clean ever since.

Salvation came two years ago when he moved to a farm in Dorset, southern England, to raise free-range chickens for a living. He still wakes up at 6 a.m. -- only instead of boarding a train, he feeds the chickens raised in white sheds spread across his farm. Junor, who now earns less than 100,000 pounds a year, has remarried and his new wife recently gave birth to a daughter.

Some drug addicts hit rock bottom after losing their jobs. One former associate at a global law firm in Canary Wharf used his salary to support a decade-long cocaine habit. In January, he lost his job and had 30,000 pounds in tax-free severance money with nothing to do all day.

Family Intervention

“I used lots of coke and gambled,” says the lawyer, 28, who asked to remain anonymous. “I had early onset of cocaine psychosis. You start to go mad. In the last three months of using, I saw, or imagined I saw, insects crawling on me.”

After an intervention from his family, the lawyer checked into a Priory detox clinic in London. The recovering lawyer is staying clean by going to daily addicts’ meetings.

At the recovery facility The Causeway, a helicopter pad sits next to a turreted Edwardian manor house, which sports a gym, a 200-year-old billiard table and a recording studio. Wealthy City bankers take the 20-minute helicopter ride to the secluded 400-acre (162-hectare) Osea Island and pay up to 10,000 pounds a week for treatment.

“Half the referrals this month have come in for people in the City who’ve lost their job, lost their car, everything, because they’ve leveraged themselves too high,” Quinn says. “We had a guy come to the island on a helicopter, and he took 6 grams of cocaine on the 20-minute journey.”

Hiding the Problem

Although the major insurers, such as Aetna Inc., Axa SA and British United Provident Association Ltd., cover rehab programs at the Causeway and ensure confidentiality, Quinn says clients from the U.K.’s financial sector are reluctant to claim for their treatments.

“People won’t use their company insurance policy for mental health or addiction for fear that it will go back to their employer,” he says. “They go sick for a month and pay for it themselves with no record of it happening.”

Moved by the scarcity of treatment choices in Britain, private equity executive Jon Moulton tried to establish a modern rehab facility -- an effort thwarted by the credit crisis. In October 2007, his charitable foundation opened Winthrop Hall, a 25- room hotel-style center in the Kent countryside, southeast of London. Many of Winthrop’s patients were from the City: lawyers, hedge fund managers and even the CEO of a major foreign bank who spent a lot of time in the U.K.

In January 2009, Winthrop Hall shut its doors as City job losses cut people’s ability to pay, says Moulton, who resigned as managing partner of London-based private equity firm Alchemy Partners LLP in September. The facility wasn’t up and running long enough to have treatments covered by private insurance companies.

Cost Issue

“It’s one thing to spend 100 pounds on a consultation for a drug or alcohol problem,” he says. “It’s another thing to spend 800 pounds a day on residential rehab.”

A company that does not offer help to deal with a drug or alcohol problem could face a lawsuit for wrongful dismissal if it fires someone who has admitted an addiction, says Marco Martinez, a former Salomon Brothers investment banker who checked himself into the Priory in 2000 to treat an addiction to alcohol and codeine.

“The driving force for banks is fear of litigation,” Martinez says. “If someone is selling drugs to a mate on the trading floor and the police find out about it, they will go after the people concerned, but they’ll also go after the employer.”

Online Help

Martinez is now working with Tactus, a Dutch treatment provider, to offer banks a new online program to deal with alcohol abuse called lookatyourdrinking.com. He’s planning another Web site for drug users next year.

U.K. law requires employee consent for any drug testing. Although pre-employment urine testing is now standard in the City, says Jason Kennedy, of the London-based headhunting firm Kennedy Associates, the screenings only show evidence of cocaine use in the previous 72 hours.

“Drug tests are usually booked days in advance, which in theory gives a candidate time to clean himself up,” Kennedy says, adding he’s never had anyone fail a test.

Eight City Meetings

Bankers seeking help can find it right around the corner. At the eight weekly meetings of drug addicts in the City, bankers talk about the daily struggle to stay clean.

In the safety of a lunchtime Cocaine Anonymous meeting in St. Michael’s Church, one woman with a blond bob and a fat string of pearls says she was terrified of attending for fear of bumping into a bank colleague. “Then I thought -- who cares? I want to quit my job anyway,” she says, echoing the sentiments of ex-City fliers Junor and Freedman.

Those survivors say they’re speaking out now to show thousands of anonymous addicts still working in the City that it’s possible to escape before going to the brink of suicide. Although Junor has lost his London townhouse and no longer drives a Porsche, he’s regained something more valuable -- his life.

Stephanie Baker is a Bloomberg News senior writer in London at stebaker@bloomberg.net; Thomas Penny is a reporter in London at tpenny@bloomberg.net

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