Drugs led a banker towards insider trading
John Femenia orchestrated an insider trading operation that yielded millions for himself and his associates prior to their incarceration. The journey commenced with extended hours in the investment banking sector, coupled with a debilitating dependence on Adderall. At the age of 28, Femenia was employed as an investment banker at Wells Fargo when he disclosed insider information regarding confidential transactions the bank was engaged in to his acquaintances. His associates would purchase stakes in firms poised for acquisition, capitalizing on the profits once the transactions were disclosed, subsequently sharing a portion of the earnings with Femenia.
Over a span of two years, Femenia and his associates reportedly generated in excess of $11 million by leveraging privileged information, according to prosecutors. He was incarcerated for approximately three years. He claims to have devised the scheme during a period of Adderall misuse, which he began using to cope with the demanding hours at Wells Fargo. In December, The Wall Street Journal highlighted the prevalent consumption of ADHD medications among Wall Street professionals and the psychological transformations experienced by those who misuse them.
“I hold myself accountable for the events that transpired,” Femenia states. ‘…However, I genuinely believe that I would not have encountered difficulties or made those decisions had I not engaged in that activity. “I obtained a prescription for Adderall to facilitate extended work hours and maintain concentration,” stated Femenia, now 43 years old. “However, it transformed the individual I became during that period.” This is a serious pharmaceutical substance. It is a pharmaceutical-grade form of methamphetamine.
Since his release from prison in 2018, Femenia has established a suburban life with his wife and two children, while also founding a real-estate lending enterprise. However, Femenia asserts that his offenses will perpetually remain just a Google search away. Rather than concealing the past, he aims to alert others to the potential devastation that prescription drug abuse can inflict on lives and careers. “I hold myself accountable for the events that transpired,” he stated. “I was the individual who voluntarily consumed Adderall. However, I genuinely believe that I would not have encountered difficulties or made those decisions had I not engaged in it.
Femenia, hailing from Long Island, describes himself as having been a well-behaved youth. He achieved the rank of Eagle Scout before enrolling in the Merchant Marine Academy. Following his graduation, he enlisted in the Navy reserves and dedicated several years to working on vessels in the Pacific Ocean. During his tenure in the engine room of an oil tanker, he developed a keen interest in finance, prompting his decision to pursue an education in business. At Columbia Business School, Femenia aimed for a career on Wall Street. His peers cautioned him regarding the extensive hours associated with investment banking and discussed the use of Adderall, an amphetamine, to maintain concentration and enhance productivity.
Femenia commenced his career in investment banking in 2009 at Wells Fargo, initially in North Carolina before relocating to New York City. The hours proved to be challenging for him from the outset. He describes himself as a “PowerPoint jockey,” engaged in the laborious tasks typical of an investment banker from 9 a.m. to midnight, at least six days a week. Femenia was raised on Long Island and achieved the rank of Eagle Scout prior to attending the Merchant Marine Academy.
Despite his initial skepticism regarding attention-deficit hyperactivity disorder, Femenia quickly obtained an Adderall prescription from a physician who appeared to conduct a rather cursory evaluation. “I became disheartened upon observing others endure 18-hour workdays and sleepless nights, leading me to conclude, ‘I cannot navigate this without assistance,’” he remarked.
Approximately one year later, he located a different physician who provided him with a second prescription. He was consuming approximately 80 milligrams daily—double the recommended maximum dosage. He recognized his addiction and made several attempts to quit; however, the intensity of the withdrawal symptoms rendered him unable to rise from bed and attend to his professional obligations. He continued to consume the medication.
The Adderall had rendered him frenetic, aggressive, and inclined to embrace new risks—a frequent manifestation associated with substance abuse. “Once an individual develops an addiction, the region of the brain responsible for sound decision-making is effectively disabled,” stated Samuel Glazer, a psychiatrist based in Manhattan who has advised numerous Wall Street bankers on issues related to substance abuse.
In 2010, during a late-night work session fueled by Adderall, Femenia perused the bank’s internal folders stored on a shared computer drive. He observed that project folders modified over the weekend were probably associated with active transactions. “My thoughts while on Adderall would diverge into various tangents, leading to the formulation of intricate schemes, and that is essentially how it all commenced,” Femenia remarked. At that moment, Femenia found himself liable for tens of thousands of dollars on a friend’s mortgage, having cosigned due to the friend’s financial difficulties.
Femenia advised his friend to purchase shares in a company he believed had a strong likelihood of being acquired in the future. He recruited an additional college acquaintance to invest in the stock as well. According to court records, Femenia’s associates realized profits exceeding $500,000 from their trading activities related to the deal. It transformed my identity during the period I was engaged with it. “This is a serious drug,” Femenia remarked.
The operation persisted for approximately two years, during which Femenia’s childhood associate utilized a shell company equipped with a corporate bank account to engage in stock transactions. Femenia claims he was unaware of the extensive nature of the operation and received substantial sums in kickbacks, amounting to hundreds of thousands of dollars. The most significant achievement occurred in 2012, when Femenia uncovered Chicago Bridge & Iron’s acquisition of Shaw Group for $3 billion. Approximately 10 individuals associated with Femenia acquired Shaw stock and call options in the weeks leading up to the transaction, as indicated by court documents. On the day the agreement was revealed in July, the stock of the Shaw Group experienced a twofold increase. The total profit from the ring amounted to $7 million, according to court records.
Following the announcement, Femenia’s childhood friend and his girlfriend transferred over $1 million to a precious-metals dealer in Manhattan for the acquisition of 550 gold bars. The following day, they traveled to Las Vegas and funneled over $100,000 through a casino. However, the FBI was pursuing them closely. Agents arrived at Femenia’s residence, asserting their awareness of his dissemination of confidential information and soliciting his cooperation in their investigation. Femenia initially closed the door on them decisively. Subsequently, he began to engage in cooperation.
In December 2012, Femenia was apprehended and subsequently entered a guilty plea to five counts of fraud and money laundering in 2013. In 2015, he commenced a five-year term at a federal penitentiary. Additionally, eight other co-conspirators also served time in prison.
Upon his arrival for his inaugural day in incarceration, he presented a bottle of Adderall; however, the correctional personnel informed him that he was prohibited from retaining the medication. He reported spending two weeks in jail as he underwent withdrawal from the substance, noting that it took more than a year to fully overcome the cravings. Ultimately, he reduced his sentence by 20 months due to participation in drug rehabilitation and adherence to established behavioral norms.
He expressed that discussing his past with friends and family remains a challenge, as he was resolute in his desire to forge a new life for himself and his wife following his time in prison. “Each day, I contemplate my actions,” Femenia remarked. “I continue to feel frustration towards myself. However, I have discerned a method to generate income once more, even in the face of significantly unfavorable conditions. I find that quite satisfactory.
He advised individuals using Adderall solely to excel on Wall Street to reconsider their choices before it becomes detrimental. “Consistent consumption of this substance will fundamentally change one’s personality and influence decision-making,” he stated. “Take the necessary steps to extricate yourself from it.” Taking a couple of weeks off is inconsequential. Proceed as necessary.
