On March 31, 2005, plaintiffs in northern California filed a nationwide class-action lawsuit on behalf of female Financial Consultants who alleged that Smith Barney discriminated against them in allocating accounts, business leads, referrals, partnership opportunities, and sales support. In November 2006, an amended complaint was filed, which added additional plaintiffs from southern California and Florida, and amplified and clarified the allegations in the complaint with evidence the plaintiffs had obtained through extensive discovery.
Settlement. On August 13, 2008, U.S. District Judge Phyllis Hamilton granted final approval to a four-year settlement agreement that provides for comprehensive injunctive relief and significant monetary relief for the following settlement class. The settlement class included all women employed as Financial Advisors in (i) any United States branch of Smith Barney’s retail brokerage division at any time from August 30, 2003 through March 1, 2008; or (ii) the California branches of Smith Barney’s retail brokerage division at any time from June 25, 2003 through March 1, 2008.
The settlement requires programmatic relief – changes to Smith Barney policies regarding account distributions, partnership arrangements, branch manager promotions, retention, diversity training, and complaint processing, among other things. An independent Diversity Monitor and an independent Industrial Psychologist were appointed to effectuate the terms of the settlement. Attaining the programmatic relief and the independent oversight of its implementation guaranteed our clients the opportunities they have earned and ensures that female Financial Advisors employed by Smith Barney in the future will not face the same discriminatory environment. When Smith Barney and Morgan Stanley merged, the programmatic relief in this settlement was combined with the programmatic relief in a related case against Morgan Stanley.
In addition, the settlement provided financial relief, establishing a class settlement fund of $33 million plus accrued interest.