Turney Duff is a former Galleon trader turned memoirist, who wrote about “drug-fueled benders,” feelings of emptiness, and the time he “faked a mugging by rolling on the pavement and into a puddle until he was bleeding and bruised” as an excuse for missing work one day in “The Buy Side.” It seems unlikely that he’ll rejoin the securities industry, but in the event he does, know that he’s watching you.
Keep a mental list. You should have a list of good guys and bad guys. It will come in handy down the road. If you do this over time, two things will happen: You’ll know who NOT to do business with and you’ll increase the number of mutually beneficial relationships you have. Some people actually do much better when you say, “In your hands; do your best.” And these are the people you want to keep close.
It was the last trading day of 2002. I gave one of my sales traders 10 buy orders to be executed in the last 10 minutes of the trading year. It’s a common trick to mark up a portfolio at year end to increase your returns by getting paid more on the inflated performance. I gave her my orders with about 30 minutes left in the trading day but with specific instructions to not start buying until the last 10 minutes. I wanted to juice the price of some of the stocks we already owned. But a few minutes after I gave her the orders, I noticed they all started to move up. ALL TEN. I knew that she had leaked my orders to another one of her clients. If someone bought the stocks in front of me, they could reap the benefit of me moving the stocks higher and then turn around and sell them to me on the closing bell with no time to push the stocks as high as I wanted them to go. I was livid. But I didn’t say anything. Nor did I accuse her of leaking my orders. I just said “thank you,” and told her to have a wonderful New Year’s. For the whole next year, I kept her on a tight leash. I never fully trusted her again and probably did about half the amount of commissions as I’d done the year before. So on the last trading day of 2003, I gave her 10 orders — all shorts. There were 30 minutes left in the day and I gave her instructions to not execute until 10 minutes before the close. “I mean it!,” I said. “Do not start until 3:50pm.”
“I got it,” she said.
As I’m watching the stocks, they all start to trade lower. I know she leaked my orders AGAIN. As soon as the clock struck 3:49pm, I called her and canceled all of my orders — they were fake. I could hear her choking. Then, I got on the phone and called another broker and gave him my real orders — same ten stocks, but they were actually BUYS. The stocks ripped higher and higher.She leaked the wrong orders. Her client was losing lots of money. I was giggling. Think you’re going to play me? I’ll play you — HARDER.