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By MITCHELL PACELLE
mitchell.pacelle@wsj.com
Staff Reporter of THE WALL STREET JOURNAL
April 1, 2005; Page C4
Nearly a decade after a high-profile lawsuit drew
attention to the treatment of women at Citigroup
Inc.'s brokerage unit, a group of brokers at the
bank's Smith Barney unit filed a new lawsuit accusing
it of systematically passing over women when doling
out lucrative accounts.
The lawsuit, filed in U.S. District Court in San
Francisco by one current and three former California
employees of Smith Barney, alleges that the brokerage
firm discriminated against women when its "virtually
all-male branch management" assigned accounts
to brokers.
The complaint seeks class-action status on behalf
of all Smith Barney female brokers in the U.S.,
as well as some former brokers, a total of about
5,000. If class-action status is granted by the
federal judge handling the case, it would raise
the stakes for Citigroup, which already is busy
trying to resolve problems stemming from several
unrelated scandals.
"These claims are entirely without merit,"
a Citigroup spokeswoman said. She maintained that
"significant initiatives" undertaken in
recent years had made Smith Barney one of the industry's
"most progressive" workplaces with respect
to equal opportunities.
Charges of gender discrimination on Wall Street
are nothing new. Smith Barney already has suffered
through an embarrassing previous legal battle. A
class-action lawsuit filed in 1996 grew out of complaints
from women at the firm's Garden City, N.Y., office,
who said they were harassed in a fraternity-house-style
party room. Since settling the case in the late
1990s, Citigroup has paid out tens of millions of
dollars to women who participated in the suit.
Citigroup isn't alone in facing such allegations.
Last July Morgan Stanley agreed to pay $54 million
to settle claims from dozens of women who accused
the firm of systematically denying them promotions
and pay increases. The settlement with the federal
Equal Employment Opportunity Commission came before
a federal discrimination trial was set to begin.
The lead plaintiff in that lawsuit was represented
by one of the law firms that filed the suit yesterday.
The new suit against Smith Barney doesn't portray
vulgar behavior toward women. Instead, it focuses
on the way in which "leads" and "referrals"
on promising investment accounts are distributed
to brokers, who are called financial consultants.
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