Lawyers for hundreds of black financial advisers have reached a $160 million settlement in a lawsuit accusing Wall Street brokerage giant Merrill Lynch of racial discrimination, a plaintiffs' attorney said Wednesday.
If approved by a federal judge in Chicago, the payout by Merrill Lynch to around 1,200 plaintiffs would be one of the largest ever in a racial discrimination case, Chicago-based attorney Suzanne E. Bish said.
Speaking from his Merrill Lynch office in Dallas, one of the first plaintiffs from the earliest days of the suit, Maroc "Rocky" Howard, said he wished he and his fellow black brokers never had to resort to litigation.
"Working in a fair environment, I would have made more money than this settlement is going to make me," Howard, 55, said in a phone interview. "But it is a positive thing."
Another plaintiff who has since left the firm, Marshell Miller, 58, of Little Rock, Ark., also welcomed that eight years of litigation was drawing to a close.
"It's been a long struggle," Miller said. "But it was something that needed to be done."
Bank of America-owned Merrill Lynch -- one of the world's largest brokerages with more than 15,000 financial advisers -- issued a statement Wednesday saying only, "We're not at this point commenting on the existence of the settlement nor the status of a settlement."
Lead plaintiff George McReynolds accused Merrill Lynch of steering black brokers away from the most lucrative business and so, under a compensation system emphasizing production, they earned less than their white counterparts. They made 43 percent less in compensation on average in 2006, plaintiff filings allege.
The settlement coincides with the 50th anniversary of Martin Luther King Jr.'s "I Have a Dream Speech," Bish noted. She said she hopes the case will help ensure the kind of equal opportunity King spoke about in Washington, D.C.
"I'm getting goose bumps thinking about it," she said about the coincidence the settlement came around the anniversary. "What (the plaintiffs) wanted to achieve was the same opportunities for the next generation -- for their children."
Bish said the settlement should force changes beyond the company singled out as the defendant.
"They are leaders on Wall Street," she said. "And increasing opportunities for African-Americans at Merrill Lynch should spill over to the rest of Wall Street."
In its own filings in the case over recent years, Merrill Lynch denied the discrimination allegation and staunchly defended its compensation programs.
"All (financial advisers), regardless of race, are judged by the same metric," one of the company's filings argued. "The rule is simple: produce more, earn more."
Settlements don't necessarily imply that a defendant accepts any wrongdoing. Bish said she could not discuss detailed terms of the agreement with Merrill Lynch.
But plaintiffs claimed discrimination pervaded Merrill Lynch, at least partly because the company employed relatively few African-Americans overall. In a 2009 plaintiffs' filing, they contended that fewer than 2 percent of the brokers at Merrill Lynch were black.
"Far from being a colorblind meritocracy, race permeates policy and practice in a way that creates substantial obstacles to equal employment opportunity for Merrill Lynch's African-American employees," William T. Bielby, a professor of sociology, said in the filing.
Merrill Lynch sometimes relied on stereotypes, the filing also asserted, once allegedly suggesting managers encourage black brokers to "learn to play golf or other activities designed to learn how business gets done in manners (they) might not be familiar with."
The lead plaintiff, George McReynolds, of Nashville, Tenn., began working for Merrill Lynch in 1983 and continues to work for the firm. In his complaint alleging discrimination, he said his managers once took his office away his office after 20 years on the job and moved him to noisy, heavily trafficked cubical by a women's restroom.
Both Miller and Howard say one of their greatest regrets is that younger blacks, who might have pursued work as financial advisers, chose other career because a reputation for discrimination in the industry.
Because of Miller's experience at work, he says his two sons avoided the field. Howard adds, "Even now, we have blacks who have MBAs from Ivy League schools saying they want nothing to do with this business."
But Howard adds he has been loyal to Merrill Lynch, and he praises them for deciding to settle the suit.
"Some of the changes coming will make it a better firm," he said. "They are making an effort to heal."