Snow Job: Coked-Up Bankers Caused the Financial Crisis?

Stock traders (copyright Digital Vision/SuperStock)

by: Bruce Kennedy

Comedian Robin Williams, always good with a one-liner, once summed up his struggle with drug abuse via a punchline: “Cocaine is God’s way of saying you’re making too much money.”

 

Well, TV’s Mork may have been on to something. David Nutt, a controversial British professor, psychiatrist andneuropsychopharmacol​ogist – who was also the U.K.’s most senior government adviser on drug abuse — believes cocaine contributed to the recent global financial crisis.

 

“Bankers use cocaine and got us into this terrible mess,” he said in a recent interview with the U.K.’s Sunday Times (subscription required) — adding that cocaine made many people in the financial sector overly confident and more open to taking additional risks.

 

Cocaine, he says, is a perfect drug for the industry’s “culture of excitement and drive and more and more and more. It is a ‘more’ drug.”

 

Nutt was dismissed from his government role in 2009 after commenting that there wasn’t much difference between the harm caused by horseback riding and taking the drug Ecstasy, so some people are dubious about his conclusions.

 

But there is plenty of evidence to support the global financial sector’s long-standing love affair with cocaine. A stimulant that is a status symbol and that is readily available around Wall Street, the City of London and other financial districts, coke has for years been the perfect drug for bankers.

 

“It’s the same rush from doing a deal and doing cocaine,” former equities analyst Neill Junor told Bloomberg in 2009. “The adulation from doing a deal spills into going for a beer and then a party — it’s an amorphous blob of energy.”

 

And while managers may have known about a cocaine problem in their office, according to the Bloomberg report, many ignored it — so long as the abusers continued to make money for their firms.

 

Just last year Business Insider put together a collection of some amazing but true stories regarding cocaine and financial types. Some of the low-lights include:

  • Court papers say Bernie Madoff, the former investment adviser and financier convicted of one of the largest fraud schemes in U.S. history, used to have so much cocaine at work that his colleagues called his office “The North Pole.”
  • An account manager at Barclays (BCS -1.33%) was sentenced to more than seven years in prison for selling cocaine from his work desk in an affluent London suburb.
  • Authorities raided a T.G.I. Friday’s in Lower Manhattan in 2009, after reports that clientele from nearby Wall Street firms were buying large amounts of marijuana and cocaine at the restaurant’s bar.
  • In his book “The Sellout,” author Charlie Gasparino relates a tale of how former Bear Stearns CEO Jimmy Cayne kept an antacid bottle full of cocaine on his desk.

And then there’s the feature published last summer in The Guardian, in which a young man who worked in “The City” for five years recounts how the financial sector’s culture of drinking, cocaine and other drugs nearly did him in.

 

“There are striking parallels between drug addiction and aspects of banking,” he told the newspaper. “Every junkie will say they’re not addicted, they just want to take ‘one more hit.’ Many bankers say they want to get out of the industry, but not before one more bonus.”

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