Edward Jones last week agreed to pay $34 million to settle a lawsuit brought by a former broker almost three years ago that claimed widespread, intentional racial discrimination in the firm’s policies and practices.
The ex-broker, Wayne Bland, is African American and worked at the company from 2014 to 2016.
The lawsuit, which was filed in 2018 in U.S. District Court in Illinois, alleged that Edward Jones “employs company-wide policies and practices regarding training, compensation, partnerships, and the assignment of territories, business opportunities and sales support that unlawfully segregate its workforce and den[ies] African Americans the income and advancement opportunities because of their race.”
The settlement agreement covers African American and Black field-based financial advisers employed by Edward Jones in the United States between May 24, 2014, and Dec. 31, 2020, according to the filing, which was from last Friday, March 19. There are about 800 former and current financial advisers who meet the criteria to be part of the class-action settlement, according to the filing.
That's a payment of $42,500 per adviser before subtracting legal fees and costs.
"We reached this agreement because it is in the best interest of Edward Jones and allows our firm to move forward," a company spokesperson wrote in an email. "We remain committed to creating a place of belonging for our associates and our clients and making a positive impact in our communities."
Edward Jones has also recently announced a new plan to focus on equitable hiring, training and promotions, the spokesperson added.
As part of the settlement, Edward Jones will create a new financial adviser council to address diversity issues and senior management will be kept informed of those initiatives. The firm is also lowering the amount that advisers must repay in training costs, to $50,000 from $75,000, if they jump ship to another firm.
For years, large firms have been hit with racial discrimination lawsuits by advisers, who often claim they have been passed over when the firm is doling out client accounts. Just last year, Morgan Stanley was sued by its former head of diversity for allegedly discriminating against Black women who work at the bank.
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