Merrill Lynch Reaches $160 Million Agreement With Black Financial Advisors
Merrill Lynch, a unit of Bank of America, has reached an agreement that will settle a lawsuit filed in 2005 for $160 million. The settlement, which a Merrill Lynch spokesperson wouldn’t confirm, according to The New York Times, would be available to all black brokers working for the firm since May 2001. The payout “would be the largest sum ever distributed to plaintiffs in a racial discrimination suit against an American employer,” reports the paper.
When the suit was filed, only one in 75 brokers was black. And, according to the lead plaintiff George McReynolds, those brokers got little help from managers and weren’t included as members of the team. These brokers were considered “poor producers” and the atmosphere continued that perception. McReynolds, 68, still works for Merrill Lynch out of Nashville.
“We are working toward a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisers,” said a Merrill Lynch spokesperson, Bill Halldin, yesterday. Merrill Lynch was purchased by Bank of America in 2009 for $33 billion.
Among the evidence presented during the case was a deposition from Merrill’s one-time CEO E. Stanley O’Neal, the organization’s first black chief executive. He acknowledged that it could be a tougher environment for black brokers. The reason he cited, summed up by the Times, was “most of the firm’s prospective clients were white and might not trust their wealth to brokers who were not.”
At one point, about 1,200 names were listed on the lawsuit. McReynolds says it was difficult to get colleagues to sign on to the lawsuit, an issue exacerbated by the fact that 25 US states didn’t have any black brokers in them. The company had 14,000 brokers working as of June 30. Bank of America, as a whole, has 257,158 workers. Merrill has, says the NY Times, been dominated by white men, with its brokerage team called the “Irish marines.”
The firm faced a discrimination suit in the 1970s that was supposed to lead to greater diversity but didn’t. In 1998, the company settled a sex discrimination lawsuit with 900 women.
This case was meant to go to court in January 2014, but Bank of America decided to settle. Separately but related, Merrill Lynch is the firm that intern Moritz Erhardt worked for before he collapsed and died after working three straight all-nighters. That happened in London, but it’s clear this company needs to do something about its corporate culture ASAP.