Bank of America Merrill Lynch agreed to pay $39 million to settle a class-action lawsuit filed by female financial advisers.
The case, originally filed in 2007 against Bank of America, but since amended to include Merrill Lynch brokers, alleged that a "deep rooted and pervasive gender discrimination" existed at Bank of America and Merrill Lynch, and the firms "treat female advisers as second-class citizens."
The lawsuit claimed the firms’ “largely male branch managers systematically favor male brokers” in distributing accounts and other sales leads, and in providing pay and support services.
Bank of America’s brokers were later folded into Merrill Lynch after the Charlotte, N.C., based banking company bought Merrill in 2007.
“We are pleased to resolve this matter,” said Merrill spokeswoman Susan McCabe.
The case covers about 4,800 advisers and trainees who worked at Merrill since August 2007, or Bank of America since March 2006, according to a court filing Friday.
The settlement agreement calls for an independent monitor to study and track policies regarding teaming and account distribution, and requires Merrill Lynch to assess managers’ performance in ensuring opportunities for women advisers. The oversight will run for a period of three years.
Federal judge Pamela Chen of the U.S. District Court, Eastern District of New York, is expected to consider final approval of the deal later this month.
News of the settlement was first reported by Reuters.
The case marks another milestone in the firm’s efforts to clean up long-festering employee suits.
In August, Merrill agreed to pay $160 million to settle a discrimination lawsuit filed by African-American financial advisers in 2005.