A broker who claims that Merrill Lynch denied her at least $1 million in commissions has filed a gender discrimination lawsuit against her former employer, alleging the firm treated its female advisors as second-class citizens.
Betsy Whipple, a Nevada broker who had a book of business worth more than $20 million, accuses Merrill Lynch of failing to live up to its contractual obligations when she joined the firm in October 2011 from Morgan Stanley.
For starters, the firm incorrectly coded her payout at the institutional rather than retail rate, a mistake that impeded her ability to move up the pay grid and attain bonuses, she alleges in a searing complaint filed in federal court in Nevada.
Due to the error, Whipple was receiving a transaction fee of $97 to $200 for each trade she placed, instead of a much higher commission, which at Morgan Stanley yielded between $900 and $2,500.
Whipple was denied the correct amount of her retail commissions for nearly five years when the problem could have been fixed in “less than three minutes,” her attorney, Gayle Nathan of Las Vegas, argues in the complaint.
The incorrect account categorization caused her to lose more than $1 million in income, Whipple claims.
Whipple also accuses Merrill Lynch of a “manipulated strategy to steal her assets” and lower her asset base, so she would not be able to increase her compensation.
She points to an instance in which she brought in a $5.5 million prospect she courted while at Morgan Stanley. Because the firm refused to allow the assets to settle because it was an institutional account, she had to transfer it to Bank of America Institutional, losing the business and all related commissions, she alleges. She also failed to receive a bonus of $250,000 to $350,000 that she says she was entitled to.
Whipple claims that an email from a superior giving her permission to open the $5.5 million account was deliberately erased from her C-drive by an assistant manager. When she asked the assistant manager to retrieve the C-drive, he “began a practice of cornering her in her office and screaming at her that she was a liar and was making up things,” she claims in the lawsuit.
In another instance, the assistant manager reassigned a $3 million account to another broker while she was away on vacation.
Whipple filed two complaints with Merrill Lynch against the assistant manager for his unprofessional conduct and blamed him and another male assistant for losing two pregnancies achieved through in vitro fertilization, according to the complaint.
“Both were compromised by management screaming at her, causing her blood pressure to rise and the fertilizations to fail,” Nathan claims in the lawsuit.
Merrill Lynch disagreed with the allegations. “We have polices to ensure that all employees are treated fairly and regularly make certain that those policies are properly implemented,” said Bill Halldin, a spokesman for Merrill Lynch.
Whipple was placed on heightened supervision after she challenged management about not receiving her bonus, as promised, on the $5.5 million account she brought in. She persisted in her criticism of Merrill Lynch even while on heightened supervision, repeatedly telling management that she was not being paid the correct amount of money on her trades. She also rebuked them for violating the Lilly Ledbetter Act by not paying her the same broker’s fees that other brokers were being paid.
In December 2016, 30 days before her vesting date, she was called at home to say that she had been fired.
Whipple contends that Merrill Lynch brought in brokers only to farm out their assets to in-house money managers and then fire them once they had taken their books of business.
The lawsuit chides Merrill Lynch for policies and procedures that it alleges discriminates against female financial advisors.
"The violations are systemic, based upon company-wide policies and practices, and the result of unchecked gender bias that pervades [Bank of America’s and Merrill Lynch's] corporate culture," it claims.
In addition to pay disparities, the lawsuit blasts the firm for allegedly distributing accounts, partnership opportunities, upfront money, and sales, administrative and professional support on more favorable terms to male advisors than to similarly-situated female advisors.
“Defendants have intentionally implemented these company-wide policies and practices and maintained their discriminatory compensation system in order to pay their male financial advisors more money than their female counterparts,” Nathan alleges.
Whipple, who now works for Newbridge Securities in Hiko, Nevada, and Nathan declined to comment on the litigation, saying they are in discussions with the defendants about a resolution to the case.