Wells Fargo has agreed to pay $35 million to more than 500 African American financial advisors and trainees over allegations the bank favored their white colleagues, Bloomberg reports.
Six black brokers allege the bank “engaged in an ongoing nationwide pattern and practice of race discrimination” in a revised complaint filed in Chicago last week and cited by the news service. The brokers allege black employees were less likely to be selected for advisor teams or as successors and were more likely to be assigned to less lucrative branches, according to the complaint. In addition, large client accounts allegedly often went to advisors who weren’t black, the brokers say, according to Bloomberg.
A Wells Fargo spokeswoman tells Bloomberg over email that the company doesn’t agree with the claims but wanted to put the matter to rest for the sake of other employees as well as clients and investors. A U.S. District judge is scheduled to rule on the settlement later this month, according to the news service.
Several large brokerages have faced sex and race discrimination allegations in recent years, Bloomberg writes. In 2013, Merrill Lynch agreed to pay $160 million in a settlement with black brokers and $39 million more in a settlement with female employees alleging discrimination, according to the news service. Last year an African American employee in the company’s Indianapolis branch sued the brokerage claiming racial discrimination.
Morgan Stanley agreed to a $16 million settlement with black brokers in 2007, according to court papers cited by Bloomberg. Last year, the company’s wealth management unit was sued by another group of African American employees who claimed advisors’ racial background determined their compensation and career opportunities.