CHICAGO – 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 the 1,200 plaintiffs would be one of the largest ever in a racial discrimination case, Chicago-based attorney Suzanne E. Bish said.
Bank of America-owned Merrill Lynch – one of the worlds largest brokerages with more than 15,000 financial advisers – issued a statement Wednesday saying only, Were 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 added. She said she hopes the case will help ensure the kind of equal opportunity King spoke about in Washington, D.C.
Im getting goosebumps 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 in the eight-year-old lawsuit.
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.
Robert Gettleman, the U.S. district judge overseeing the case in Chicago, had denied the suit class-action status. But the Court of Appeals for the 7th Circuit in Chicago granted the status in 2012 – reviving the case and vastly extending its reach.
Gettleman must formally approve the deal, a process that could take months.
A status hearing in the case is scheduled for Sept. 3.