City traders have long suffered from a reputation for testosterone-fuelled excess but now a leading US hedge fund is facing a lawsuit over a surfeit of different hormones - a trader is suing SAC Capital Advisers, alleging that he was forced to take female hormone tablets in an attempt to make him less aggressive.

Andrew Tong, who worked for a team with a relaxed trading style, has accused his former boss of ordering him to take the tablets because his moneymaking skills would be enhanced if he became more feminine.

Mr Tong, 37, claims the hormones, which he bought on the black market, caused him physical and emotional distress and led to him wearing women’s clothes.

According to the lawsuit, filed in the Manhattan Supreme Court, Ping Jiang told Mr Tong to take the hormones because he was too aggressive to fit in with his team’s more laid back trading style. The two men are reported to have briefly entered into a sexual relationship.

Mr Jiang, 41, who is said by Trader Monthly to earn over $100 million a year, remains a senior trader at SAC, which has denied the accusations.

The fund said: “SAC 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.”

Parisis Filippatos, Mr Tong’s lawyer, said: “The allegations are neither scurrilous nor false, in fact they are absolutely true and corroborated by scientific evidence.”

Mr Filippatos refused to comment on what kind of compensation his client was seeking from SAC or on any other details of the case.

SAC, founded and run by Steve Cohen, has a reputation as one of America’s most successful hedge funds. A recent article in Business Week said that the fund’s traders routinely accounted for as much as 3 per cent of the New York Stock Exchange’s average daily trading volumes.

According to court papers, Mr Tong and Mr Jiang, who are both computer scientists, previously worked together at Lehman Brothers.

Both moved on but kept in touch and were eventually reunited at SAC, which is said to control at least $10 billion in funds from offices in Connecticut and New York.

A courtroom showdown between the two men looks unlikely after a judge ordered the two sides to try to settle the case in private arbitration.

Sources in the US said that the Equal Employment Opportunity Commission, a federal body, has opened its own investigation into the case. The EEOC declined to comment.

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