JPMorgan Settles FAs’ Racial Bias Lawsuit for $24 Million
JPMorgan has agreed to pay $19.5 million to members of a class action suit who accused the firm of mistreating them because they’re African-American, according to Bloomberg.
The suit was brought by Jerome Senegal in Texas, Erika Williams in Illinois, Brent Griffin in Wisconsin, Irvin Nash in New York, Amanda Jason in Kentucky and Kellie Farrish in California, the news service reports.
The suit accused JPMorgan of creating “racial disparities” such as paying African-American advisors less, placing them in less lucrative branches than their white counterparts, providing African-American advisors with little support from licensed bankers and restricting African-American advisors from a program for wealthier clients, according to court papers cited by Bloomberg.
As part of the settlement, JPMorgan agreed to also contribute $4.5 million to a fund set up for recruiting, bias training, a coaching program for African-American advisors and a review of how it assigns advisors to branches, according to the news service.
The firm denied any “wrongdoing of any kind whatsoever” as part of the settlement, Bloomberg writes.
Tom Kelly, a spokesman for JPMorgan, says the “settlement eliminates the need for litigation” and that the firm will "enhance the careers of our black advisers,” according to the news service.
Linda Friedman, the lawyer for the advisors, tells Bloomberg in an email that her “clients are proud of this outcome and acknowledge that JPMorgan had a choice to fight.”
Financial advice firms have been facing accusations of racial discrimination in recent years. A former JPMorgan advisor who resigned from the firm sued in May alleging JPMorgan caused him to lose out on opportunities at affluent branches, as reported.
In late 2016, Wells Fargo agreed to pay $35 million to more than 500 African-American advisors and trainees who alleged the firm was engaged in an “ongoing nationwide pattern and practice of race discrimination.”
And in 2013, Merrill Lynch settled for $160 million with African-American financial advisors.
Friedman, of Chicago’s Stowell & Friedman, was also the lawyer representing the Merrill Lynch and Wells Fargo African-American advisors in those suits, as reported.
Friedman also worked on the gender-discrimination suit known as the “Boom-Boom Room,” filed in 1996 against Smith Barney, Bloomberg writes. Jamie Dimon, JPMorgan’s current chief executive officer, was a defendant in that case, as well as the head of the firm at the time, according to the news service.