File this one under "damned if you do, damned if you don’t." Over the past few months, Merrill Lynch executives have met with African-Americans financial advisors to settle a class-action lawsuit alleging systemic racism on the part of the firm.
This week, when news got around that Merrill CEO Stan O’Neal, who is black, personally attended the meeting with about 15 of the litigants, charges of sexism abounded. Seriously. Some readers of Registered Rep. magazine contacted this magazine saying, in effect, that Stan didn’t meet any of the 900 women in their 1996 class-action lawsuit, alleging discrimination. Of course, that would have been difficult for him to do, since O'Neal's responsibilities didn't then include Merrill's brokerage unit.
The current lawsuit, which was filed in November, claims that Merrill Lynch engages in systemic race discrimination and retaliation against African-Americans, as well as unequal pay practices and opportunities. George McReynolds, the lead plaintiff in the case, who is still working as an FA at Merrill, says he was treated as an inferior and subjected to abusive treatment, comments and behavior in his Nashville, Tenn. office. (For more, click here to see Registered Rep.’s current March cover story.)
“We didn’t know O’Neal was coming,” says Mary Stowell, whose firm, Stowell & Friedman, in Chicago, is representing the class of about 60 African-American brokers. “I was pleased that he thought this was important enough to show up to,” Stowell says. In the meeting, O’Neal acknowledged the challenge of working in the securities industry as a minority, according to Stowell.
William Halldin, a spokesperson for Merrill Lynch, says, “We think the meeting was very constructive. There was a good deal of give and take.”
Hydie Sumner, a former Merrill Lynch broker who was awarded $2 million for her gender discrimination suit in 2004, told Registered Rep. that she was surprised by O’Neal’s visit, but didn’t think it showed sexism on his part. “I think it’s unusual that a particular class is acknowledged,” Sumner says. “I never met with [O’Neal]. He’s made public statements about my case, but not directly to me.” Still, she says, “I think it’s progress when the top CEO will meet with a group of claimants. (For more on Sumner’s case and her quest to be reinstated at Merrill, click here.)
There are still gender discrimination cases that have yet to be settled against Merrill Lynch. Valery and Janine Craane, a mother-daughter broker team in New York, were part of the large suit including more than 900 women filed in 1997 but held out on the settlement offered in that case. The Craanes feel they lost much more money than what was offered in the settlement, according to reports, and are awaiting a separate settlement. (For more on women and Wall Street, click here.)
Sumner says that while there is a feeling of disillusionment among women whose cases have not yet been settled, O’Neal shouldn’t be criticized for meeting the racial class-action suit. “If O’Neal didn’t meet with the group, you’d being saying he’s not paying attention to the case,” she says. Of course, O’Neal’s personal appearance is meaningful only if the move showed how seriously Merrill now takes such discrimination cases. Sumner says, “Now that he does meet with them, you hope it’s not just a public-relations move.”