Less than 10 years after they settled the infamous “boom-boom room” case, Smith Barney is being sued for discrimination again.
The new case, Fassbender Amochaev v. Citigroup Global Markets, Inc., d/b/a Smith Barney, was filed in United States District Court of Northern California in San Francisco by one current and three former employees more than a year ago on March 31, 2005. The lawsuit says Smith Barney engaged in a pattern and practice of gender discrimination against its female financial consultants in account distributions, sales support, compensation and other terms and conditions of employment throughout the company.
Currently, attorneys for the plaintiffs are preparing to file a brief with the court seeking class certification on Oct. 27. Smith Barney is scheduled to respond by Dec. 8.
Smith Barney accepted no culpability in the boom-boom case, but the 1998 settlement cost the firm millions of dollars and opened the door to improved sexual-harassment and diversity policies.
The new lawsuit doesn’t include sexual-harassment charges, but does address the economics of gender discrimination: The women suing the firm say they make less money than men because they are routinely denied the same opportunities.
The four plaintiffs, Renee Fassbender Amochaev, Deborah Orlando, Kathryn Varner and current employee Judy Weil, specifically charge that Smith Barney branch managers, who have “extraordinary discretion to distribute business opportunities as they choose,” according to the filing, allocated a disproportionate share of account distributions and other benefits to male financial advisors. The alleged discrimination created an unequal playing field in which the women were unable to compete and effectively build their businesses as successfully as their male counterparts.
Smith Barney disagrees. “The firm believes these claims are entirely without merit, and will continue to vigorously defend this position in upcoming proceedings,” Susan Thomson, a managing director of corporate communications at Citigroup, said. “Significant initiatives in the last several years have helped establish Smith Barney as one of the most progressive employers in the securities industry.”
Thomson said the complaints lodged by the women in the lawsuit have nothing to do with their gender. “The issues being raised by this suit are relevant to all financial advisors regardless of gender—all financial advisors are interested in more account reassignments, a better office, the best parking space,” she said.
But Elizabeth Alexander, a partner at Lieff, Cabraser, Heimann and Bernstein, one of the firms representing the claimants, says the results of the alleged gender discrimination are tangible. “It is unfortunate that in 2006, Smith Barney continues to favor male brokers with respect to compensation and business opportunities over their female colleagues who are equally or more qualified,” she said.
Moreover, the problem is widespread, according to another attorney for the plaintiffs, Justin Swartz of Outten & Golden in New York. “I wouldn’t be surprised if women from across the country who experienced the same problems come forward to support these claims,” he said. “Gender discrimination on Wall Street is nothing new. It takes women like our clients, who are willing to stand up for their rights, to get Wall Street to listen.”
The women have also garnered support from outside sources. Dr. Martha Burk, director for the corporate accountability task force and chair of the National Council of Women’s Organizations, says the group is “very much behind the brave women who have brought this suit” and believes that class certification is appropriate. “Smith Barney is an example of how the industry does not learn—after the ‘boom-boom room’ debacle, one would think corrections would have been made,” she said.