How Wall Street Keeps Outrageous Gender Bias Quiet 20 Years After the Boom-Boom Room

Everybody loves a half-price sale, and if you’re a recruiter on Wall Street, there’s always a markdown on female employees.

Women in finance last year earned 52 cents for every dollar that men made in a job category the Bureau of Labor Statistics calls “securities, commodities and financial services sales agents.” That’s about as bad as it gets for women workers. It was the biggest pay gap among 119 occupations evaluated in a recent report by the Institute for Women’s Policy Research in Washington, D.C.

But the revealing lawsuits that used to challenge this outrageous pay gap and economically hostile work environment to women are few and far between today – and that’s how Wall Street wants it. The country’s biggest banks have made it harder than ever for women with complaints of unequal pay or treatment to make their cases in a public forum.

 It was 20 years ago last month when three women in the Garden City, New York branch of Smith Barney triggered an industry-wide migraine, filing a class-action lawsuit that exposed egregious sexual harassment and unequal pay. It was dubbed the “boom-boom room” suit, the namesake of a party room in the branch’s basement. Click here for the rest of the story.

Decades After ‘Boom-Boom Room’ Suit, Bias Persists for Women

Twenty-three women sued Smith Barney for sexual harassment and pay discrimination in an explosive class-action lawsuit filed 20 years ago this month. It became known as the “boom-boom room” suit, named after a basement party room at Smith Barney’s branch office in Garden City, N.Y. Nearly 2,000 women joined the case, exposing the sordid antics of Wall Street’s testosterone-driven culture.

Smith Barney paid $150 million in arbitration awards and settlements in the case, and it and other Wall Street firms rushed to set up anti-harassment training, employee hotlines and programs to recruit women.

Twenty years later, permanent change is less obvious.

“You may no longer have strippers coming for afternoon entertainment, but that doesn’t mean you are treated as an equal,” said Anne C. Vladeck of the New York employment law firm Vladeck, Raskin & Clark. “It’s not quite as blatant as what went on in the boom-boom room, but it’s still there in a way that makes it very hard for women to succeed. Companies on Wall Street are just not changing.”

You can read the full story I wrote for The New York Times here.

Why Only Big Bankers Can Flout the Rules and Get Away With It

Did you hear the one about the stock promoter, the lawyer, three figurehead CEOs and seven auditing firm partners?

No, it isn’t a “walks into a bar” joke. It’s a case brought by the Securities and Exchange Commission last month against the players in a sham stock offering. The agency went after all the people involved in what it called ”a massive scheme to create public shell companies through false registration statements.”

No big deal, right? The SEC is supposed to be going after bad guys, making them pay fines and lose privileges. But it tends to do a lot better in cases against no-name boiler room types like the ones in the January case than it does with players at powerful banks.

In my column for TheStreet this week, I discussed the contrast in enforcement results between cases against small players and cases against Wall Street’s elite.

In December, for example, the Financial Industry Regulatory Authority, or Finra, brought cases against ten household name firms for flouting the rules that govern research analysts when their firms are pitching for initial public offering business. In its complaints against the firms, Finra described the actions of specific people who broke specific rules. But we never learned their names. Indeed they weren’t charged at all.  You can read my column here.