|E. Stanley O'Neal, Merrill Lynch's first|
Black CEO admitted white clients
were skeptical of Black brokers
Merrill Lynch, one of the biggest brokerage firms on Wall Street, has agreed to pay $160 million to settle a racial bias lawsuit that wound through the federal courts for eight years, including two appeals to the United States Supreme Court.
The payout in the suit, which was filed on behalf of 700 black brokers who worked for Merrill, would be the largest sum ever distributed to plaintiffs in a racial discrimination suit against an American employer. Merrill, which was acquired by Bank of America after the suit was filed, also agreed to take advice from black employees on how to improve their chances of succeeding as brokers.
“This is a somewhat heroic story because these plaintiffs just kept fighting and fighting,” said John C. Coffee Jr., a professor at Columbia Law School. “This is like a triple-overtime win.” Among the many twists in the case was the admission in a deposition by Merrill’s first black chief executive, E. Stanley O’Neal, that black brokers might have a harder time because most of the firm’s prospective clients were white and might not trust their wealth to brokers who were not. “We are working toward a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisers,” Bill Halldin, a spokesman for Merrill Lynch, said on Tuesday. When the suit was first filed in 2005, only about one of every 75 brokers at Merrill was black and most of them were considered poor producers. The lead plaintiff, George McReynolds, contended that black brokers received little help from their managers early on and were often ostracized by co-workers. The unequal treatment compounded their disadvantages year after year, he contended."'via Blog this'