Bank of America-Merrill Lynch (BAC) is moving to settle a lawsuit initially filed on behalf of some 700 black brokers who charged the firm with discrimination, the bank said Wednesday. The news came before President Barack Obama spoke at the Lincoln Memorial commemorating the 50th anniversary of Martin Luther King’s “I Have a Dream” speech.
The amount of the preliminary settlement, which will not be reviewed by a federal judge until Tuesday, is reportedly $160 million.
“We are working toward a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisors,” the bank said in a statement. It declined to confirm the amount of the settlement or disclose the current number of black advisors at the firm.
As of June 30, the number of financial advisors at Bank of America-Merrill Lynch was 15,759, while the total headcount for client-facing financial professionals was 19,689.
The Chicago legal firm representing the advisors, Stonewall & Friedman, did not return phone calls about the lawsuit.
Nashville-based advisor George McReynolds brought the case to the courts in order to address the lack of support he said he received from management and co-workers. His allegations date back to 2001.
Ironically, many of the suit’s claims stem from issues that arose during the leadership of Stanley O’Neal, who is black. O’Neal joined Merrill in 1986, was CFO from 1998 to 2000 and became head of the private-client operations in 2000, though he had never been an advisor.
In 2001, O’Neal was tapped as president of Merrill, and he moved into the role of CEO and chairman in 2003, a role he held until 2008. He was forced out for starting merger talks with Bank of America and Wachovia without first consulting with Merrill’s board of directors.
In a deposition, O’Neal said that it was possible that black brokers could have a difficult time building a book of business at Merrill since many of the firm’s prospective clients were white and might not trust brokers who were of a different ethnicity, according to a New York Times report.