They had been called into the London International Financial Futures and Options Exchange (Liffe) - the battleground for the cream of young, slick and macho traders - after a freelance dealer was found in possession of a small amount of cannabis.
Despite the raid, well publicised in the press, no more drugs were found, though it was remarked at the time that the police might have stood a better chance of success if they had swooped during the day, not in the evening when everyone had gone home. Liffe claims the police chose the time because sniffer dogs cannot operate with people around. A more cynical view prevails in the City. "It was just a shot across the bows," laughed one City employee yesterday. "They just wanted their people to know they took it seriously. Why else would they do it at night? It would have been terrible for their image if they had actually found more drugs."
It puzzles others that it has taken until the mid-1990s for such a raid to happen. Although there are no official figures, the general City view is that drug abuse - at least of harder illicit substances - was far more pronounced in the boom, bull-market 1980s, when cocaine was as much a part of a City dealer's image as the sharp suit, Porsche 911 Turbo and Thames-side penthouse apartment. "Things are totally different now," reports a City journalist. "The business is much more competitive. There's been an awful lot of job shedding and things are tough. Warburgs axed 2,000 jobs recently. A dealer is just mad not to be on top of things."
But yesterday a survey in People Management magazine suggested that City businesses should follow Liffe's example and take drug abuse among employees more seriously. Dr Michael Turner, chief medical officer for City Medical Services, which runs drug-testing programmes for businesses, revealed that 10-15 per cent of job applicants were currently testing positive for drugs.
So one in seven of those brash young Turks is back snorting the "nose candy" through rolled pounds 50 notes? Not quite. The preferred drug of the remnants of the loads-of-money generation is cannabis. Two thirds of those testing positive prefer a drug more commonly associated with ageing hippies rolling up on hallowed album covers of the Grateful Dead.
Dr Turner will not reveal his clients' names but his research suggests that one in 30 prospective employees interviewed - most of whom are already working for other City firms - are using cocaine, LSD or amphetamines. That hardly seems surprising when recent research shows that 11 per cent of 16-19 year-olds have tried amphetamines and 8 per cent LSD.
Dr Turner said he was surprised by all the media interest in his findings. While he thought there was cause for concern he said the findings reflected the younger age profile of City workers and showed that today's generation had found substitutes for alcohol and cigarettes, their parents' preferred poisons.
There are no comparative figures on drug misuse among the City's 1980s whizz kids. While drug-testing employees is firmly established in the US, British firms - largely those in safety-sensitive industries like oil and transport - only began testing for drugs at the beginning of the 1990s. The first City banks and institutions only began to test in 1992. Those who do are still in the minority.
So what accounts for the City's move towards testing? Surely it is more than a fear that dealers whose drug of choice is now cannabis instead of cocaine will be too mellow - rather than too strung out - to pull off that multi-million pound transaction? Neither can the move be explained away as an attempt to recoup some of the pounds 5bn apparently lost to the British economy from illness attributed to alcohol, drugs and cigarettes. City firms are acutely sensitive about the subject. Those who have have introduced drugs testing are shy about discussing it. Many banks are said to be considering it but their executives prefer to talk off the record.
"Everyone is hypersensitive," said one senior executive at a merchant bank, who preferred to remain anonymous. "It's the low age profile of our employees which makes drug testing particularly interesting to us. We cannot ignore recent research which seems to show that drug use is now so prevalent that by the year 2000 the deviant young people will be the minority who have not taken them. Neither can we ignore that there is a very high prevalence of drug taking among the 21-25 age group."
He adds that a series of international financial scandals - including the collapse of Barings, Britain's oldest bank - have undermined the only thing the City real has to sell - its reputation. If it is to remain an international financial centre it must be squeaky clean. In drug abuse many firms see a disaster waiting to happen. The risk was similar - if not greater - on London's dealings floors in the 1980s but nothing was done about it. "We are just catching up," John explains. "It felt more acceptable then."
Devising a drugs testing policy has not gone smoothly in some City offices. Executives have rowed over the traditional corporate complacency towards alcohol abuse; there have been disagreements, too, over the justification of treating cannabis and harder drugs users in exactly the same way - in almost all cases a positive test for both soft and hard drugs leads to a candidate being turned down.
"Alcohol has always been much more part of the culture," says our anonymous banker. "You are expected to entertain clients by plying them with drink. And of course there is less sensitivity because it is at least not illegal. The problem with treating cannabis differently from other illegal substances is that it would hardly do our image any good. Can you imagine the headline? And anyway there is some evidence to suggest cannabis users move on to harder drugs.
"Like everyone else we are looking at testing just now and I think, like existing schemes, we will treat anyone already working for us who has a problem as if they are suffering from an illness. Treatment is not cheap but it is far cheaper than a scandal caused by a drug-induced mistake."
New York provided the model for many of our 1980s preconceptions about the coke-snorting life of City traders, the "Masters of the Universe" that Tom Wolfe caricatured in his novel The Bonfire of the Vanities. Some things haven't changed. Take a stroll down the canyons of Wall Street on any business day in 1995 and sooner or later your nose will detect that strong smell of marijuana going up in smoke. It wafts from alcoves and doorways like warm air leaking from the centrally-heated vestibules of the great banks.
Precise data on the levels of drug-taking on Wall Street these days is hard to come by. Ask around, however, and most traders will tell you that consumption, notably of cocaine, is nothing like at the pace that it was in the roaring Eighties when snorting a couple of lines between deals was de rigueur. "I don't think we are dashing into the bathroom every half an hour any more like we used to," remarked one trader at a venerable brokerage yesterday.
New York firms are coy about the drugs issue - understandably they don't much want it to be part of their public image. Almost all now require that new recruits take a drug test on joining the firm - "everyone has to pee in the cup nowadays," one spokesperson confirms - and most will offer drug treatment programmes for anyone who asks as a regular part of their package of employee benefits.
Two shocking events last year reminded Wall Street that drugs had not simply disappeared with the Eighties. In June last year, the chief economist of Bear Stearns, one of the most revered and traditional of the New York brokerage firms, went public in the New York Times, admitting that he had a serious alcohol and cocaine problem and was seeking treatment. His reveletation was a reminder that cocaine consumption was not a fad that had passed.
Still more devastating was the discovery a month earlier of Wardell Lazard, dead and face-down on the bed in a Pittsburgh hotel room, an empty bottle of vodka and a mirror covered with the tell-tale traces of powder on the bedside table. Mr Lazard had been lionised as probably the most successful black entrepreneur ever to go it alone on Wall Street. He had been hired originally by Salomon Brothers but, with a loan from that company, had built his own underwriting firm. No one had had any clue that he had fallen victim to the temptations of cocaine.
For a while, at the start of this decade, it was assumed that the twin Eighties cultures of cocaine-sniffing and hostile take-over binges might have vanished from Wall Street. We now know for sure, however, that the take-over urge has taken over again, and cocaine has not simply retreated into extinction.
In London, Liffe announced a welfare and counselling service for employees after its September raid, and our senior executive confirms his company is looking at a similar scheme. The recession has robbed the band of rich young traders of some of its merry men but for many, the work- hard, play- hard cycle continues. "We have a lot of young single men with much more money than almost all their contemporaries. They are worked very hard and put under a lot of pressure. One of the ways to deal with that is turning to drugs. We have to give them other ways of dealing with it."Reuse content