Society

Merrill Lynch To Pay $160 Million to African-American Stockbrokers In Race Bias Lawsuit Settlement

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After an eight-year legal battle that included two trips to the Supreme Court, George McReynolds is finally vindicated in his claim that the brokerage firm Merrill Lynch discriminated against African-American stockbrokers.

McReynolds (pictured), now 68 and who has continued to work for Merrill Lynch throughout the legal ordeal, was the lead plaintiff in a suit against his employer that was joined by about 700 other African-American employees. He claimed that the company, which in 2005 employed only one African-American stockbroker for every 75 on its payroll, ostracized and discouraged its African-American brokers, placing them as a severe disadvantage compared to their white colleagues.

Yesterday, lawyers announced that Merrill Lynch agreed to pay out $160 million to compensate victims of its racial discrimination. The pool of money will be distributed among all African-American brokers, including trainees who worked at the firm since 2001.

The size of the payout is 10 times larger than the one forked over by another brokerage firm, Morgan Stanley, in a similar racial bias suit in 2008.

Merrill Lynch currently has an African-American CEO, E. Stanley O’Neal, who testified in a deposition that with most of Merrill Lynch’s clients being white, black brokers might be perceived as untrustworthy that could account for the discriminatory policies.

A representative for the brokerage firm’s current parent company, Bank of America, which bought Merrill Lynch after the suit was filed, said only, “we’re working toward a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisers.”

"It's been a long journey," McReynolds told the New York Times. "I never gave up. As long as it was alive, I thought we had a chance."

He said his colleagues took bets on the outcome of the case.

"I found out they bet against me a couple of times," he said.

SOURCES: New York Times, BBC, MSNBC