US’s Wells Fargo ends row with brokers

Wells Fargo & Co settled a dispute with a group of black brokers claiming that the bank had failed to give them the same career opportunities as their white colleagues.

The bank will pay $35m to more than 500 financial advisers and trainees, according to a settlement agreement filed on Friday. Wells Fargo also agreed to add employees tasked with recruiting and coaching black brokers, and to set up a $500,000 business-development fund.

“We do not agree with the claims in the lawsuit, but believe that putting this matter behind us is in the best interests of our team members, clients and investors,” Helen Bow, a spokeswoman for the San Francisco-based bank, said.

Wall Street’s biggest brokerages have faced lawsuits in recent years alleging sex or racial discrimination. Bank of America’s Merrill Lynch brokerage agreed in 2013 to a $160m settlement with black brokers and a $39m payment to female employees. Morgan Stanley agreed in 2007 to pay $16m to a group of black brokers, court records show.

The Wells Fargo case was brought by six black brokers who said in a complaint filed on Friday in Chicago federal court that the bank “engaged in an ongoing nationwide pattern and practice of race discrimination”.

DISCRIMINATION CLAIMS

Black employees were passed over when brokers picked teammates or successors, and lucrative client accounts were often steered towards advisers who were not black, they said. Black workers were assigned to territories or branches that generated less money, according to the complaint.

Wells Fargo has more than 15,000 financial advisers, making it one of the biggest US brokerages.

US District Judge Harry Leinenweber is scheduled on January 24 to consider giving the agreement preliminary approval.