BofA's Merrill Lynch Reaches $160 Million Settlement in Racial Bias Lawsuit
By Hal M. Bundrick
NEW YORK (MainStreet) -- Black brokers at Merrill Lynch have been ostracized, received little help from managers and rarely invited to join broker teams, according to a long running racial discrimination lawsuit that is reaching a settlement, according to published reports. As first reported by the New York Times, Bank of America Corp.'s Merrill Lynch wealth management unit has agreed to pay $160 million to settle the claim.
The class-action lawsuit was originally filed in 2005 by George McReynolds, a 30-year broker for Merrill Lynch in Nashville, Tennessee. The suit grew to include nearly 1,200 current and former employees of the firm.
"We are working toward a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African American financial advisers," Bank of America spokesman Bill Halldin said in a statement, refusing to further discuss details of the settlement.According to the Times report, E. Stanley O'Neal, the firm's first black chief executive admitted in a deposition related to the lawsuit that black brokers might have had difficulty succeeding because most of the firm's prospective clients were white and "might not trust their wealth to brokers who were not." A complaint filed in 2006 referenced a 1974 Equal Employment Opportunity Commission lawsuit against Merrill Lynch that was "based on its refusal to employ women and minorities as brokers." To resolve the lawsuit, Merrill Lynch agreed to the entry of a consent decree (the "O'Bannon Consent Decree") that required Merrill Lynch to increase its representation of African-American brokers to 6.5%. The complaint says "On information and belief, Merrill Lynch never met the goals to which it agreed in the O'Bannon Consent Decree. Indeed, more than 30 years later when this suit was filed, only 2% of the brokers employed by Merrill Lynch are African-American." The settlement, reportedly one of the largest ever in a discrimination case, will be considered by a federal judge in Chicago Tuesday. Bank of America acquired the venerable brokerage firm - then at the brink of failure -- at the height of the financial crisis in 2009 for $33 billion.
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