Financial regulators are treading into matters related to environment, social and governance, or ESG, at an unprecedented pace. But with conservative opponents pushing back, it isn’t clear how far regulators can go. You can learn more in my article today for Capital & Main.
Wall Street firms have been rushing to making commitments to racial justice since the death of George Floyd, but how do the same firms behave when a Black employee comes forward to complain about racism? The answer is discouraging. Black people who complain have been ostracized, harassed, threatened and fired after speaking up. And when they have their cases heard in Wall Street’s private arbitration forum, they lose almost all of the time. I wrote about these issues in an article for The Nation, published today.
You can read it here.
Earlier this month, Securities and Exchange Commissioner Hester Peirce told Politico that she “absolutely” thinks that public companies should have the option to require arbitration, which would strip shareholders of their right to bring lawsuits like the one Kacouris filed. The comments by Peirce, a Donald Trump nominee who took office in January, amplified previous remarks by other SEC officials. Commissioner Michael Piwowar, for example, who departed his post in July, told an audience at the conservative Heritage Foundation last year that he would “encourage” companies to come talk to the SEC about putting mandatory arbitration clauses in their charters.
Read more about this in my story today in The Intercept.
For victims of sexual harassment on Wall Street, the case of Kathleen Mary O’Brien was a bad omen.
In 1988, O’Brien, then a stockbroker at Dean Witter Reynolds, filed the earliest sexual harassment case we could find in a public database maintained by the Financial Industry Regulatory Authority, Wall Street’s self-governing organization, which is overseen by the Securities and Exchange Commission.
The year before, O’Brien had sued Dean Witter in Los Angeles Superior Court, but the brokerage firm successfully argued that she was legally bound to use Wall Street’s closed-door arbitration forum, then run by a FINRA predecessor, the National Association of Securities Dealers. The arbitrators’ decision in her case would turn out to be a common one in harassment cases over the following years: The claim was dismissed. The panel, offering no explanation as to how it came to the decision, charged her $3,000 in arbitration fees.
O’Brien’s case is one of 98 sexual harassment or hostile work environment claims and counterclaims made by women that The Intercept and the Investigative Fund found in the FINRA database over the past 30 years. You can read the full story here.
Jay Clayton, Donald Trump’s choice to run the Securities and Exchange Commission, is a man Wall Street itself might have picked to run its most important federal regulator. Except for two years clerking for a federal judge after graduating law school, he has worked his entire adult life at Sullivan & Cromwell, an elite law firm based in downtown Manhattan that includes many of the country’s largest publicly traded companies as clients.
Enforcement cases and fines have gone down since Clayton was sworn in last May, and the SEC has given Wall Street and corporate America any number of gifts, including the easing of public company disclosure requirements that some experts consider key for investors looking to understand a company. My colleague Gary Rivlin and I wrote about Clayton’s SEC for The Intercept. You can read our story here.
Everybody loves a half-price sale, and if you’re a recruiter on Wall Street, there’s always a markdown on female employees.
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.
Twenty investors await a Finra arbitration hearing in September against two clearing firms that handled their trades in a penny-stock fraud. Did COR Clearing and Wilson-Davis ignore obvious red flags? You can read about it in my column today for TheStreet.com.
On Feb. 11, a puzzled customer of The Vanguard Group noticed that the firm had sent him 72 emails. But only one of them was meant for him.
Vanguard has a history of problems with online security and security of customer information, which I’ve written about here and here.
For its latest glitch, you can read my column today.