Whether sincere or motivated by image concerns, Wall Street's heightened passion for addressing the racism in its midst has opened an important conversation about recruitment, promotion, and pay policies in one of the nation's most lucrative businesses. Missing from the dialogue so far, though, are some key questions: When racism does occur, how do firms treat Black employees who complain? And what happens to Black people when they take their complaints to arbitration or to court?
Capel is still looking for a Wall Street job, but the industry is vowing to change. In the wake of last summer's unrest, Merrill parent Bank of America and other giant financial institutions rushed to make commitments to racial justice and in several cases broke an industry-wide silence, releasing statistics that exposed the paucity of Black people and other minorities in their workforces. Merrill, for instance, revealed in August that 780 of its 17,500 brokers are Black, a figure of 4.5 percent. That's a 125 percent increase since 1994, when 2 percent of its brokerage force was Black. But in an industry with sparse Black representation, it is easy to double or even triple a minority group's numbers. More illuminating is that the Black segment of the firm's brokers-also known as financial advisers-grew only 2.5 percentage points over those 26 years.
FINRA Rule 2010: Standards of Commercial Honor and Principles of TradeA member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.
Please, show me the cases those regulators brought in the past 50 years in which member firms were charged with permitting racial or sexual discrimination/harassment. And what's the message? The regulators unwittingly encourage intolerant behavior by not deeming these practices to be conduct that offends basic notions of "high principles" and "honor." Do the SROs see such conduct as nothing more than an indiscretion?. . .I hear these heart-rending stories virtually every day when I am contacted by potential clients. If this cancer is tolerated by Wall Street's regulators, how will we ever destroy it? If the NYSE and NASD see fit to bar folks from the brokerage industry because they have had felony convictions for drunk driving, then it's high time we roll out the same artillery to combat illegal discrimination.
We now have Barack Obama set to enter the White House. We have Mary Schapiro at the helm of FINRA. About 13% of the U.S. population is described as African-American. About 4% is described as Asian (a far more expansive category than South Asian). About 51% is female. I'd love to see the actual statistics, but I'll bet you that I'm right about the following:
If FINRA and its undistinguished Board of Governors truly cared about protecting the industry's employees and ensuring that its members lived the credo of "conduct consistent with just and equitable principles of trade," then the self-regulatory-organization would have promulgated a rule that enshrined the civil rights of the industry's men and women, and, accordingly, Rule 13201 should have insisted that no employment agreement could contain a mandatory arbitration provision pertaining to "statutory employment discrimination claims."