Skip navigation

Where the Women At?

Stephanie Villalba is a high-ranking Merrill Lynch executive, but on a recent business trip, she found herself in a more humble position. While flying on the firm's corporate jet with some male colleagues, Villalba, who heads up Merrill's European private client group, was directed by them to sit with the plane's cabin crew and to serve drinks during the flight, according to court papers filed in

Stephanie Villalba is a high-ranking Merrill Lynch executive, but on a recent business trip, she found herself in a more humble position.

While flying on the firm's corporate jet with some male colleagues, Villalba, who heads up Merrill's European private client group, was directed by them to sit with the plane's cabin crew and to serve drinks during the flight, according to court papers filed in June. She is now in the process of suing Merrill in an employment tribunal in Croydon, England, a suburb of south London.

Villalba's is a particularly salacious case, but it is hardly the only recent example of the securities' industry's ongoing struggles with its boys behaving badly. At Morgan Stanley, a Santa Fe, N.M.-based broker named Anne Kaspar has filed a gender-discrimination claim against the firm with the Equal Employment Opportunity Commission. In July, Morgan settled a separate case, brought by the EEOC and a former bond saleswoman named Allison Schieffelin, for $54 million.

Meanwhile, in April a former Merrill broker named Hydie Sumner won a $2.2 million award from a panel of arbitrators that found the firm guilty of sex discrimination on a classwide scale (see the accompanying story on page 44).

This might be just the beginning. As more cases are settled, the large dollar awards are likely to entice others to file more suits, legal experts say.

In the eight years that have passed since the heyday of Boom-Boom Room activities, the securities industry has done much to guard against replays of such incidents. Sexual harassment training, gender-equity hiring efforts and the adoption of no-nonsense rules regarding gender interaction have helped. The Securities Industry Association says the vast majority of large and midsized firms have instituted such initiatives. Though hard numbers on the volume of sexual harassment claims are hard to come by (because most settle out of court), firms and legal experts say serious abuses have been significantly curbed.

Living in the Past?

Yet, Wall Street is still a man's world. The SIA says over 80 percent of the industry's managers are white males, as were more than 70 percent of investment bankers, traders and brokers.

This begs a couple of important questions: What makes the brokerage business such a stubbornly male-oriented place, and will it ever be a place in which women can feel comfortable? The firms would ardently argue that the industry is well on its way to making itself a welcoming place for women. In addition to the initiatives mentioned above, many firms are keeping a sharp eye out for ways to hire and promote more women.

When it comes to addressing abuses, they hasten to note that they consider most of the bad-boy behavior a vestige of a bygone era, and in some cases — like Sumner's, which involve incidents from years in the past — they can assert this credibly.

“The firm described in the panel's decision is not today's Merrill Lynch,” said Merrill spokesman Mark Herr in an official comment on the Sumner ruling. “We agree, and regret, that nearly a decade ago there was inappropriate behavior … it should not have occurred and would not be tolerated today.”

Still, not everyone is convinced that the firms have effectively consigned discriminatory practices to the past. Lisa Neuman, a former Morgan Stanley broker, who is currently part of a sex discrimination suit against that firm, says few women in the securities industry would answer positively to the question, “Has your firm's work environment changed significantly in the last three years?” Many complainants claim the firms have just become subtler in their discrimination, rigging teams, for instance, so that when men retire or change firms, the most lucrative of the accounts they leave behind get assigned to other members of the old-boy network, not to the most senior broker in the office.

There is ample evidence that the brokerage industry is trying to address its gender issues by increasing the number of women it employs. But even if that were to prove an effective way to attack the problem, improving the male/female ratio has proven surprisingly difficult.

The SIA found that the percentage of securities-industry employees who are women has actually fallen, from 43 percent in 1999 to 37 percent at the end of 2003. The Bureau of Labor Statistics, whose definition of a securities industry employee differs slightly from the SIA's, shows the percentage of women as even lower — 28.5 percent at the end of 2002, down from 29.7 percent a decade earlier.

Among brokers, women's ranks are even thinner. According to the SIA, about 16 percent of brokers at large firms were women at year-end 2003, up from 15 percent 2001.

So, is there a “correct” percentage? That's hard to say, but firms have been focused on adding to the female ranks. In the wake of the 1998 class-action discrimination cases against Merrill and Smith Barney (which resulted in each of the firms paying out over $100 million), the SIA dedicated itself to “actively working with membership to increase the ranks of women in the industry.”

The SIA states in its 2003 report on diversity, 100 percent of big firms now have diversity initiatives, and nearly as many midsized firms do as well. Many of the firms have developed diversity advisory boards and councils, diversity training courses and business networks for women.

On the other hand, the brokerage industry does not have a reputation for family friendliness, and many think this could be keeping some women from pursuing brokerage careers. A three-year study, commissioned by Smith Barney as part of its discrimination settlement, supports this notion. The study, performed by the New York-based research firm Catalyst, found that among men and women at seven leading securities firms, with comparable average ages (41) and years in the industry (14), 69 percent of women said “commitment to personal and family responsibilities” was a barrier to advancement at their current firm. Only 53 percent of men felt this way. Additionally, only 50 percent of women had children as opposed to 74 percent of the men, and only 67 percent of the women were married as opposed to 86 percent of the men.

Still, Louise Roth, an assistant professor of sociology at the University of Arizona, studying gender and Wall Street, doesn't buy the argument that women are avoiding Wall Street for purely family reasons.

“Assumptions that women will make ‘personal choices’ to be less career-committed when they have children are used as a basis for discrimination that is unjust given the actual evidence,” Roth says.

Been There, Missed That

Subha Barry, head of Merrill's multicultural and diversified business development group, has firsthand experience with the stress a brokerage industry job places on a family-oriented woman.

“The first five years are brutal, because all of your time is devoted to building a successful business,” she says, adding that she rarely saw her first child when she started in the business.

Barry believes women are underrepresented in the industry and at her firm, but she makes it clear that she's not in favor of hiring women for its own sake.

“It's not about quotas,” she says. “The idea is that it has to be organic.”

Even though the outlook is improving on some fronts, Nancy Thomas, one of the original complainants against Merrill, says that the regulators must do more than assume that their punishment of egregious offenses will result in self-reform.

She thinks objective benchmarks are necessary and that a manager's compensation should be connected to them. Absent such a system, Thomas says, women are likely to continue to be unfairly passed over for accounts, walk-ins and referrals, which then places them at risk of firing for low performance.

In the opinion of some, Merrill's “organic” approach has been slow to improve matters. Women have remained at 15 percent of the advisory force since 2000, when they increased by 1 percent. As of 1999, according to a statistical review by Sumner's counsel, Merrill had one female district director, 11 regional vice presidents and five sales managers among a network of about 14,000 brokers. Merrill says the number of women managing its office complexes has increased from 4 percent in 1997 to 15 percent in 2000, but did not furnish the underlying numbers. It also declined to provide more recent data.

Mary Stowell, co-counsel for the plaintiffs in both Merrill and Smith Barney's 1998 settlements, says she's seen some improvement. Of Smith Barney, Stowell says “management is taking it [discrimination] seriously and enforcing the policy.” The percentage of woman “sales workers” increased at the firm from 26 percent in 2000 to 29 percent at the end of last year. Within the “officials and managers” category, women climbed from 40 percent to 46 percent over the same span.

Jeff Brodsky, head of human resources for Morgan Stanley's individual investor group, says his firm “has seen significant growth in our number of entry level female hires and branch managers,” though he declined to furnish the specifics. According to statistics on Morgan's Web site, 18 percent of the firm's “sales workers” (financial advisors) were women in 2003, as were 44 percent of “professionals” (analysts and associates) and 35 percent of “officials and managers.”

Barry maintains that attracting more women is in the firms' best interest: “Better business decisions are made when you have diverse people,” she posited.

A broker with more than 30 years at Smith Barney notes that the brokerage industry has always been male-dominated, and he isn't holding his breath for a sudden shift to equal representation of men and women.

“Frankly, I don't think it [the industry] will change,” he says. “A lot of men feel comfortable talking with other men. Is that sexist? Yes, it is. But it's a testosterone-heavy place and I think the decks are stacked against women, that's all.”


Hydie Sumner says Merrill harassed and discriminated against her — and now she's ready to give working there another go.

By John Churchill

Hydie Sumner's response to a routine question about her age testifies to the all-consuming nature of her legal battle with Merrill Lynch: “I was in my 30s when my litigation began. I'm now into my 40s.”

A former broker in Merrill's San Antonio branch, Sumner was part of a class-action gender-discrimination case filed in 1997 and settled in 1998 without any admission of wrongdoing from the firm.

Unfortunately, the settlement was only the beginning for Sumner. Her individual claim took six years to wend its way through an independent arbitration system. Earlier this year she was awarded $2.2 million in damages, and the firm was found guilty of sexual harassment, a hostile work environment and retaliation (she was fired after other women began to complain).

But here's the kicker in her case: She wants to go back to work at Merrill.

Given the details of her case — she alleged discrimination in the way accounts were distributed and unwanted sexual advances from her branch manager — it's hard to imagine her wanting to return.

But after hearing her reasoning, it's easier to understand:

“It's not about retribution,” she says. “There are very few people — men or women — with my credentials,” and she merely wants the opportunity to do what she was trained to do — manage at Merrill Lynch.

Sumner says she believes in the value proposition of the firm and is prepared to take claims that it has changed at face value.

Her ability to return is in the hands of the arbitrators who issued her $2.2 million ruling in April. For now, she'll continue working at her current firm (whose name she's bound not to disclose) while awaiting a response to her request for a reinstatement hearing.

It's likely to be several months before she gets the date, but after what she's been through, what's another few months?


Wall Street, it has been said, is an old boys network, a place so competitive and potentially cruel that only alpha males need apply. (Some complain the corporate culture is about as sophisticated as a college fraternity.) Despite the institutional constraints, plenty of women have worked their way toward the top.

Jessica Bibliowicz
CEO, National Financial Partners

As head of one of the industry's most successful independent firms, Bibliowicz has guided NFP through the acquisition of 139 companies and has contacted more than 4,000 others in an effort to create a national network of financial planning advisories. Since the firm went public in 2003, its stock has risen 26 percent, and now other independents are aping its business model, which uses a combination of cash and company stock to win planners to its program.

Mary Farrell
Managing director, senior investment strategist, UBS

Farrell once said: “There isn't some secret for women. The difference should be in the financial planning.” It's that kind of no-nonsense attitude that has helped Farrell shoot up the ranks at UBS and make her into a frequent CNBC panelist and best-selling author.

Janet Hanson
Founder, president/CEO, Milestone Capital Management

After working for Goldman Sachs for 14 years, Hanson founded Milestone Capital, which manages more than $2.3 billion in assets. Her biggest achievement, though, might be her founding of 85 Broads, a network of female financial professionals.

Abigail Johnson
President, Fidelity Management

After taking over for future-MFS Chairman Robert Pozen in 2001, Johnson has guided Fidelity safely through scandal-infested waters to record profits, including a 12 percent rise last year. Of the scandals Fidelity has so far managed to avoid, Johnson says, “The best I can figure out is that the people who did the stupid things were thinking about the one-year financial performance of their companies.”

Deena Katz
Owner/president, Evensky, Brown, Katz, & Levitt

The founder of one of Florida's largest retirement planning-firms, Katz also has authored several books on financial planning, and her past two books have appeared on The New York Times best-seller lists.

Sallie Krawcheck
CEO, Smith Barney.

Restoring Smith Barney's and Citigroup's reputation to pre-Grubman levels is Krawcheck's charge, and she is attacking the task with characteristic persistence, diligence and humility. “The public is like a jilted lover,” Krawcheck has said. “It's going to take some time to win them back. We've got to start by saying we're sorry.”

Deborah McWhinney
President, Schwab Institutional

Charles Schwab & Co. has poured more capital into its institutional unit in recent years, and McWhinney sits at the center of that effort. The unit recently reached an all-time high of $300 billion in assets — a whopping 30 percent of Schwab's total assets. “People are no longer sitting on the fence,” McWhinney has said. “The deer-in-the-headlights syndrome is gone.”

Mary Schapiro
President, regulatory policy and oversight, NASD Regulation

You might not want to receive a letter from Mary Schapiro, but as the main writer of securities legislation for the NASD, it's impossible to ignore her importance. After nailing three Wall Street banks with a $15 million fine for improper commissions on the sale of IPOs, Schapiro and the NASD have recently targeted 529 college savings plans, investigating 15 different major investment firms for potential malfeasance. (See profile on page 32.)

Judith A. Shine
President, Shine Investment Advisory Services

Not only is she considered one of the nation's top financial advisors, Shine's also considered one of the foremost experts on retirement planning.

Margaret Tutwiler
Executive vice president, NASD

One of the most important aspects of any regulatory organization is communicating with the public and the media, and Tutwiler, the former U.S. Undersecretary of State for Public Diplomacy and Public Affairs, is about to take the job for the NASD. That might sound easier than answering questions from grizzled political reporters — Tutwiler was notoriously tough during State Department press conferences — but don't be so sure.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.