Bank of America Corp agreed to pay $39 million to settle a gender bias lawsuit by female brokers who claimed they were paid less than men and deprived of handling their fair share of lucrative accounts, court papers made public on Friday show.
The settlement was disclosed less than two weeks after news that the bank reached a $160 million settlement with hundreds of black Merrill Lynch & Co brokers who alleged racial bias in pay, promotions and how big accounts were allocated.
About 4,800 current and former female financial advisers and trainees at Bank of America and Merrill, which the bank bought in January 2009, are eligible for the latest settlement.
The lawsuit filed on their behalf accused Bank of America and Merrill of intentionally discriminating by favoring male brokers when awarding pay, allocating client accounts and referrals, and providing professional and marketing support.
According to court papers, such practices created a "cumulative advantage" effect that perpetuated and widened earnings disparities by gender. Bank of America was also accused of retaliating against female brokers who complained of bias.
The three-year settlement agreement requires Bank of America to retain an independent monitor to oversee improvements to its practices, and hire a consultant to study how it "teams" brokers and how its teaming practices affect the allocation of accounts.
Bank of America did not admit wrongdoing in agreeing to the settlement, which requires approval by U.S. District Judge Pamela Chen in Brooklyn, New York.
"The world of financial advisers remains a very male environment in this company and this industry," said Rachel Geman, a partner at Lieff Cabraser Heimann & Bernstein representing the plaintiffs, in an interview.
She said the settlement provides "significant monetary relief, as well as programmatic relief to help insure that women are on a fair playing field."
Bill Halldin, a Bank of America spokesman, said the bank is pleased to settle, and that the accord "will enrich our existing diversity, inclusion and development programs, providing even more opportunities for women to succeed as financial advisers."
Bank of America is based in Charlotte, North Carolina, and said it ended June with nearly 15,800 financial advisers.
The lawsuit dates