By Rob Copeland, Liz Hoffman and Rachel Louise Ensign
Late last year, a woman at Bank of America Corp.'s
hedge-fund-focused, prime-brokerage division complained to human
resources about her boss. Other women soon followed suit.
These women alleged that a senior banker and firm managing
director, Omeed Malik, made unwanted advances toward female
colleagues and engaged in relationships with female subordinates,
without the knowledge of Bank of America's top brass, people
familiar with the matter say.
After the initial complaint, the bank mobilized a group of
internal investigators who began interviewing employees, the people
say. With the investigation continuing, Mr. Malik was fired earlier
this month, some of the people say.
The bank told staff internally only that he left to pursue other
opportunities, though it privately told some clients that more was
behind the move, some of the people say.
Bank of America personnel policy states that personal
relationships among employees in which one has influence over
another can lead to "real or perceived conflicts of interest" and
"should be avoided when possible."
This is how such allegations of inappropriate conduct are
handled on Wall Street in 2018. Like other large corporations,
major financial institutions such as banks and hedge funds mostly
act privately to handle with midlevel allegations of misconduct, in
many instances allowing the accused employees to leave quietly.
This can have the effect of satisfying neither the alleged
victims, many of whom complain that departing executives can
continue careers elsewhere with their reputations intact, nor the
accused, who say the rapid-fire process doesn't allow for all the
facts to come to light.
While entertainment, media and technology firms are currently
generating major headlines about inappropriate behavior, banks had
their moment in this spotlight around 20 years ago. At that time,
the infamous "boom boom room" lawsuit at Smith Barney contained
shocking allegations about the treatment of female employees in the
basement of a branch. The brokerage firm settled some complaints,
paying $150 million, including fines and settlements, and pledged
to revamp its culture.
In the wake of that scandal, firms across Wall Street say they
have built procedures to identify potentially inappropriate conduct
that, whether they work or not, almost always ensure the incident
is handled with a minimum of public attention.
Some broader factors also have kept allegations at major
financial firms out of the limelight.
Mandatory arbitration agreements, which require employees to
waive their rights to bring claims in court as condition of
employment, are now ubiquitous across financial-services firms.
Such waivers also prevent public class-action suits that roll
together claims from various accusers. The arbitration process also
commonly involves the use of nondisclosure agreements in individual
settlements, effectively muzzling alleged victims of harassment and
other discrimination from speaking out.
Details on terminations sometimes emerge later through
regulatory filings on brokers who leave their jobs.
Goldman Sachs Group Inc. quietly fired a trader, who was a vice
president of the firm, last year after he boasted at a firm event
that he could unhook a bra over a woman's shirt and attempted to
demonstrate on a female colleague, according to people familiar
with the incident. After the woman reported the incident to human
resources, the trader was fired, the people say.
That incident, not previously reported, preceded the abrupt
departure of a top Morgan Stanley research analyst in November
after a female colleague claimed he touched her inappropriately at
a company event where alcohol was served, according to people
familiar with the matter. The Morgan Stanley executive, Nigel Coe,
a managing director with responsibilities to research General
Electric Co. and other industrial companies, wasn't fired for
cause, but was encouraged to resign, one of the people said.
Mr. Coe said in a brief interview that his departure was "by
mutual consent," and declined to comment on its circumstances.
"We're getting quadruple the calls ever since Harvey Weinstein,"
said New York discrimination attorney Derek Smith, referring to the
movie mogul accused of inappropriate conduct. Mr. Weinstein has
denied allegations of nonconsensual sex. "Maybe gone are the days
where brokers hold up scorecards for women who walk by...but sexual
harassment is still prevalent in the financial industry," added Mr.
Smith.
Inappropriate behavior at financial firms also may be dissuaded
by the post-financial-crisis reality that emails and chats of bank
employees at all levels are now routinely monitored by an army of
compliance workers.
Wells Fargo in July centralized harassment investigative work
"to ensure cases are reviewed quickly and with the utmost care," a
spokeswoman said in a statement. She added that the bank believes
"it is important to assess the root cause to help determine if
there are underlying issues that require additional attention."
--Lisa Beilfuss and Emily Glazer contributed to this
article.
(END) Dow Jones Newswires
January 19, 2018 21:00 ET (02:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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