Last week, JPMorgan Chase & Co. agreed to pay $19.5 million to settle a class action racial discrimination lawsuit with more than “200 current and former black financial advisers and their attorneys.” Additionally, the bank agreed to spend $4.5 million to “in-house development programs over the next three years to recruit advisers and help them be successful in those positions.”
Last week, JPMorgan Chase & Co. agreed to pay $19.5 million to settle a class action racial discrimination lawsuit with more than “200 current and former black financial advisers and their attorneys.” Additionally, the bank agreed to spend $4.5 million to “in-house development programs over the next three years to recruit advisers and help them be successful in those positions.” But why? What kind of discrimination did the class action suit allege?
For starters, the suit against the New York-based bank was filed by “six current or former black financial advisers at the bank” over allegations that they were “mistreated because of their color,” according to the suit. However, in total, more than 200 former and current African American financial advisers and their attorneys will benefit from the settlement.
The plaintiffs in the suit included current or former advisers across a number of different states, “Jerome Senegal in Texas, Erika Williams in Illinois, Brent Griffin in Wisconsin, Irvin Nash in New York, Amanda Jason in Kentucky, and Kellie Farrish in California,” according to the suit. In the complaint, the plaintiffs alleged that “JP Morgan sent white advisers to wealthier sites while assigning black peers to branches that were not as successful.” Additionally, the plaintiffs argued that “black employees received lower pay and had fewer licensed bankers to support them.”
“These racial disparities result from Chase’s systemic, intentional race discrimination and from policies and practices that have an unlawful disparate impact on African Americans.”
The bank agreed to the settlement as a way to avoid going to court. In fact, Tom Kelly, a spokesman for JP Morgan said:
“This allows us to continue to focus on the diverse and inclusive environment that is critical to our success. We’ll keep work with our black advisers through recruiting, development, coaching and management training.”
Linda Friedman, a lawyer for the plaintiffs, chimed in by saying:
“Our clients are proud of this outcome and acknowledge that JPMorgan had a choice to fight…Each case builds on the last. This is how progress is made.”
This isn’t the first time a major financial institution has come under fire over similar allegations. Just last year, Wells Fargo agreed to a $35.5 million settlement with a group of African American financial advisers who alleged the bank discriminated against them because of their race. Then, five years ago, Merrill Lynch was at the center of another racial discrimination suit that eventually settled for $160 million.