The credit crisis appears to have sobered up Wall Street in more ways than one.
A review of drug-test data compiled by drug testing firm Sterling Infosystems Inc., shows that cocaine is losing its favor among investment professionals. What drug is their choice? Marijuana.
Last year, cocaine showed up in 7% of the positive tests at Wall Street firms, down from 16% in 2007, according to Sterling, a New York-based firm that screens about 5,900 employees a year for some 270 finance shops.
Meanwhile, the prevalence of marijuana in failed tests jumped from 64% to 80% between 2007 and 2009.
“I think the incidence of hard drug use is lower today than it was 10 or 15 years ago,” says Adam Zoia, CEO of executive recruiting firm Glocap Search LLC. “The banks, in particular, are pretty persnickity on background checks.”
In all, finance seems to be a relatively clean profession. Only 2% of the industry failed drug tests last year, compared with 3.6% of the working world at-large, according to Sterling. Retail workers, in comparison, were red-flagged 4.1% of the time.
The highest levels of abuse seem to be at real estate investment trust companies, a sector that, incidentally, does more random testing than others.
But the test results generally capture drug use among new hires, candidates who knew that they would likely be tested. Random drug testing is rare, according to a spokesman for a bulge-bracket bank who asked to remain unnamed.
Among existing employees, psychologists and counselors said that drug abuse has not slackened. Some even said it is peaking, exacerbated by the credit crisis and the volatile and tenuous recovery that has ensued.
Seabrook House, a 24-bed luxury rehab facility in Pennsylvania, has been crammed with Wall Street refugees in recent months, according to Clinical Director William Heran. They are paying $24,000 for a three-month program to get clean.
Mr. Heran has been around long enough to discern a forex trader from an M&A banker. He says the rage these days is a Pez dispenser with the head of a red devil. Inside? Pills of Oxycodone or Percocet.
“We’re in crisis mode,” he says. “Many of these drugs are so accessible to the average person, let alone the person who is well-spoken and professional.”
Indeed, amphetamines seem to be gaining cache, showing up in 10% of Sterling’s positive tests this year, compared with 3% in 2007.
Across the U.S., cocaine and marijuana use has been static since 2002 at least, according to federal Health Department data. But New York is a hot-bed for illicit drugs and Manhattanites are particularly heavy users.
In a 2001 survey, 9.6% of Manhattan residents said they had used marijuana in the previous year, compared with 6% of people across the country; 5% of the island’s residents had done cocaine in the previous month, compared with 2.3% U.S.-wide.
Turning Point For Leaders, a Connecticut-based intervention and rehab company, is also seeing a steady stream of clients from Wall Street. Robert Curry, who founded the business, says that the industry is still a hot bed of abuse.
“Investment bankers — gunslingers, as we call them — are highly prone to addiction,” he explained. “And there’s a lot of denial among employers. The attitude is: ‘If they can’t fix themselves, then they’re going to have to live with it. We’re not going to put any time and effort into it.’”
Many counselors says that finance workers feel entitled to illicit drugs, given their paychecks and stress of their jobs. They are also allegedly very good at masking their addictions, the counselors say.
Heavy users, however, are seldom fooling their employers, says Brad Lamm, president of New York-based Intervention Specialists. Lamm has also seen a surge in substance abuse on Wall Street – in his words “a lot of crack and coke.”
“The titans of Wall Street normalize crazy behavior all the time,” he says. “If somebody’s delivering and showing up and doing the work, they almost have to catch on fire for someone to sound the alarm.”
The upside is that none of Mr. Lamm’s clients has been fired for abuse. In fact, he typically contacts the employer before an intervention with a sort of mantra that he uses to get through to both the user and the boss: “Dead guys don’t bonus.”
By Kyle Stock
AUGUST 20, 2010, 12:30 PM ET