Friday, 29 May 2015
Last updated 15 min ago
Dec 4 2009 | 11:55am ET
Newly-uncovered documents from the salacious sex scandal that rocked SAC Capital two years ago include explosive new allegations, including another accusation of market manipulation at the hedge fund giant.
In 2006, Andrew Tong, who worked at SAC’s New York office for less than a year, sued the hedge fund and his former boss, Ping Jiang, for sexual harassment. According to Tong, he was sexually assaulted at work and ordered to take estrogen pills and cross-dress to curb his aggressive tendencies. He also alleged that he and Jiang has a sexual relationship.
The case ended in arbitration last September, with Tong receiving no payment from SAC. A parallel Equal Employment Opportunity Commission probe closed in April of 2008, without sanctions against Jiang, who last year left SAC to found his own New York-based hedge fund. Both SAC and Jiang have denied Tong’s allegations.
The breadth of those allegations become clear in court documents that were quietly unsealed last year, after the case ended. They include graphic details of Jiang’s alleged “violent sexual advances,” as well as potentially more serious allegations of market manipulation.
According to a letter sent by Tong’s attorney to SAC three years ago, “Mr. Jiang enmeshed Mr. Tong in an elaborate scheme, which involved manipulation of [Chinese diesel engine manufacturer China Yuchai] stock and manufacturing false negative analytical reports about CYD in order to facilitate this manipulation.”
That allegation caught the eye of the Federal Bureau of Investigation agent looking into similar allegations against SAC made by Canadian insurer Fairfax Financial Holdings, Reuters reports. Nothing came of that investigation.
In his complaint against SAC and Jiang, Tong alleges that Jiang warned him that “one’s training program, salary, payout contract, and trading methods are strictly confidential.”
“You must not discuss things with anyone, including other members of the group including Steven Cohen or anyone else at SAC,” Tong claimed Jiang said. “Steven Cohen only wants us to make money, he doesn’t care or want to know our secrets to make money—SAC doesn’t need to know and doesn’t want to know.”
The case also offers new about that “strictly confidential” training program, and Jiang’s alleged “abusive and perverse demands.”
Not only did Jiang make him cross-dress at work, Tong’s lawyer wrote, “on more than one occasion, Mr. Jiang summoned Mr. Tong into an empty conference room after business hours and forced him to disrobe and model various feminine outfits as well as put on make up.” Jiang allegedly told Tong that he looked “cute” and “sexy” during the “humiliation sessions.”
Not content to leave the humiliation in the conference room, Tong claimed that Jiang would openly refer to him as “miss,” “whore,” “piece of shit” and “stupid girl” in front of co-workers. A picture of Tong in “feminine attire and makeup” was alleged posted on the SAC Intranet in the fall of 2005. And Tong said that Jiang would also pinch his buttocks in front of other employees.
Tong’s lawyers allege that senior executives at SAC, including President Brian Cohen, knew what Jiang was up to. What's more, the late Ari Kiev, the psychologist hired by Steven Cohen to train his traders, “observed Mr. Tong wearing feminine attire during business hours but did not say anything to him or to Mr. Jiang.”
Tong’s lawyer depicts the alleged sexual relationship between the two men as little short of rape. “Mr. Jiang forced Mr. Tong to perform oral sodomy,” the letter states. “In or about the beginning of March 2006”—a month before Tong’s dismissal—“Mr. Jiang committed assault and battery, as well as false imprisonment, upon Mr. Tong by restraining him with ropes and forcibly introducing certain foreign objects into Mr. Tong’s rectum.” Later that month, the letter alleges, “Mr. Jiang again restrained Mr. Tong with ropes and forcibly urinated in his mouth.”
On at least one occasion, Jiang allegedly made oral sex a condition of authorizing a trade Tong wished to make. “You’ll have to give me a blow-job if you want to make that trade,” Tong’s lawyer quotes Jiang as saying.
Apparently not content to focus exclusively on Jiang’s alleged behavior towards his client, Tong’s lawyer, Parisis Filippatos, includes several other damning allegations against Jiang in a footnote.
“Throughout his employment with SAC, Mr. Tong witnessed Mr. Jiang make several other discriminatory or bigoted comments, such as: ‘Jews are good to each other’; ‘be careful with blacks and Jews in the workplace because they are troublemakers and will sue you’; never hire women, while they learn well they are not dedicated and take off too much time when they get pregnant,’” the letter claims. “Indeed, once Mr. Tong was once assigned the task of finding candidates for a junior analyst/trader opening with Mr. Jiang’s group and when he proffered the resume of a female candidate, Mr. Jiang responded: ‘why would we even consider a woman?’”
May 27 2015 | 2:15pm ET
Support Hedge Funds Care, also known as Help For Children (HFC), by participating in this year's raffle. All proceeds go to support HFC's mission of preventing and treating child abuse. Read more…