Bloomberg News

Merrill Financial Advisers Rebuffed by Top Court on Bias Suit

October 03, 2011

Oct. 3 (Bloomberg) -- The U.S. Supreme Court refused to revive a bid to sue Bank of America Corp.’s Merrill Lynch unit for allegedly paying 700 black financial advisers less than their white counterparts.

The justices today turned away an appeal by 17 current and former company financial advisers who sought to press a class action race-discrimination suit against Merrill, which Bank of America bought in 2009.

The plaintiffs told the Supreme Court in their appeal that Merrill, from 2001 to 2006, was responsible for a “large and statistically significant wage gap” between black and white advisers. The appeal said blacks fared poorly under Merrill’s policy of letting advisers work together on teams and under the company’s system for distributing the accounts of retiring or departing financial advisers.

A federal trial judge said the 700 advisers didn’t have enough in common for the case to proceed as a single class action. An appeals court then said the advisers couldn’t appeal that ruling.

Merrill contended that the case bore similarities to the Wal-Mart Stores Inc. class action suit rejected by the Supreme Court in June.

Bank of America, the biggest U.S. lender, is based in Charlotte, North Carolina. Merrill’s parent company wasn’t named in the suit.

The suit is one of two pressed against the company by George McReynolds, a Nashville broker. The same trial judge, U.S. District Judge Robert Gettleman in Chicago, earlier this year threw out a second suit by McReynolds focusing on retention bonuses.

The Supreme Court case is McReynolds v. Merrill Lynch, 10- 1534.

--Editors: Justin Blum, Bob Drummond

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.


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