Inquiry in SAC Sex Harassment Case Nearly Complete
A federal investigation into sexual harassment charges by a former trader at SAC Capital, a powerful Greenwich, Conn. hedge fund run by financier Steve Cohen, is in its final stages and should be completed in the next two or three weeks, CNBC has learned.
The case, first reported in October, involves a lawsuit filed by a Andrew Z. Tong, a former junior trader at SAC Capital, who says he was forced to take female hormones and was sexually assaulted by his male supervisor, Ping Jiang, one of SAC’s top producers.
People with knowledge of the investigation said the Equal Employment Opportunity Commission conducted a wide-ranging, two-month inquiry of the charges made by Tong. A New York State judge had sealed the lurid details of the allegations in which Tong claimed that Jiang pressured him to take female hormones so he could be more feminine and become a better trader.
Tong alleged that he then began wearing women's clothing and had difficulty having sex with his wife. Tong also alleged that he was sexually assaulted by Jiang.
Through an SAC spokesman, Jiang vehemently denies the charges. SAC said in a statement that it "conducted a thorough investigation and found these scurrilous accusations to be false. We will vigorously defend ourselves and are confident that these claims will be swiftly rejected in arbitration."
People with knowledge of the EEOC's inquiry say the commission hasn't made up its mind about whether there is "reasonable cause" to believe Tong's claims or whether it will join his lawsuit.
The EEOC receives several hundred requests to join sexual harassment cases each year, and finds only 10% to 15% of them believable. It litigates an even smaller number, about 5% of all the cases that it reviews.
One common charismatic of the cases it brings against many big Wall Street firms is the issue of retaliation, specifically that the firm fires or takes other action against the employee who allege either racial discrimination of sexual harassment.
In his suit, Tong said he was fired after complaining about Jiang's harassment, also denied by SAC and Jiang.