Stacy Passeri was looking for a promotion. Pacific Life Insurance was hiring someone to lead sales of its insurance products to stock brokers across the country. Passeri thought she was perfectly positioned as a field vice president at the firm, marketing these same products to brokerage firms in a western region of California that stretched from San Luis Obispo to Eureka, and she was eager for a bigger role. She’d heard that Mike Dahlquist, who held her same job title, was a contender too. But there were whispers about Dahlquist, who had a reputation as a partier. Women in the office talked about how he’d made unwelcome sexual advances. Passeri’s female colleagues had taken to rolling their eyes in reaction to his inappropriate remarks at work. Figuring that a man with his profile wouldn’t be taken seriously for a management role, she liked her odds for getting the job.
Passeri was wrong. She soon got the news from a senior vice president, Mike Bell, that Dahlquist had gotten the nod — and he would now be Passeri’s direct manager. She says she told Bell she wouldn’t be comfortable reporting to Dahlquist and tried to talk him out of making the hire, briefing him on Dahlquist’s reputation and suggesting he reopen the search. As Passeri would later describe it in court filings, Bell said she could trust him to keep tabs on Dahlquist and then offered some advice about her new boss: “Give him a chance,” he said. If anything went wrong, she recalls him telling her, “Let me know and I will help you.”
When Passeri had joined Pacific Life several months earlier, in April 2000, as a single mother of four with a flourishing career, she had high hopes. With a resume that included five years as a stock broker at Shearson Lehman Brothers and another 10 years in the insurance industry, “I was pretty tailor-made” for a job marketing insurance products to brokers, she recalled.
The dream job soured quickly once Dahlquist became her boss. She said the harassment began, full throttle, in March 2001.
The court filings allege that during a series of client meetings over a two-day period at four San Francisco restaurants, Dahlquist groped Passeri’s knee and thigh and played “footsies” with her under the table, sometimes after slipping his shoe off. On occasions when she and Dahlquist made eye contact as he was touching her, he would “signal her by raising his eyebrows,” according to a declaration she filed with the court. According to the filings, one client later told Passeri he’d noticed her “look of discomfort” during a meeting. Another recalls testifying that he saw Dahlquist put his hand up Passeri’s skirt.
Passeri’s complaint alleges that as she walked with Dahlquist in downtown San Francisco after one unnerving encounter, Dahlquist advised her that he now had a say in deciding whether to continue her contract. When she responded by telling him he had no such power, he reached over and grabbed her, saying, “Oops, I think I just grabbed your butt.”
She couldn’t even get relief from the harassment when top management was around. During a break at a conference two weeks later, with Bell, the senior vice president, nearby, Dahlquist approached Passeri from behind and rubbed his hands over her hips. Instead of telling Dahlquist to keep his hands to himself, as he’d promised, the complaint says, Bell offered Passeri some advice: Be nice to him.
The investigation showed her that the company was more interested in protecting itself and its male managers than protecting her from assault.
By May, she had had enough. Word got back to her that during a recent conference call with clients at Morgan Stanley, Dahlquist had called Passeri — who’d begun her career the same year Dahlquist did — “a rookie.” Passeri sent Bell a five-page memo that detailed Dahlquist’s pattern of harassment and made it clear that she no longer felt safe reporting to him. She also demanded an investigation.
She got the investigation; an investigator from HR interviewed Passeri and several other women who had professional interactions with Dahlquist. One witness told the investigator that she would not want to be left in a room with Dahlquist and that he was “touchy-feely.” Another simply refused to answer when asked if Dahlquist had made unwanted physical advances on her. The probe clearly raised red flags inside Pacific Life: Dahlquist was sent a warning letter and required to attend sensitivity training. Yet the investigator found “no evidence” that Passeri had been sexually harassed.
“I believed that my company was on my side,” she said. But the investigation showed her that the company was more interested in protecting itself and its male managers than protecting her from assault. Making matters worse, as one of Dahlquist’s direct reports, Passeri was still required to submit her “call sheets” to him, which gave him access to daily information about her whereabouts. Her anxiety, and sense of vulnerability, “kicked into full gear.”
“I was like, ‘Oh my God, nobody is gonna help me here.’”
In June 2001, she filed a lawsuit against Pacific Life, Dahlquist, and Bell in San Francisco Superior Court. Pacific Life, through spokesperson Jesse Page, said by email that the company did not wish to comment “except to reinforce that we take issues such as sexual harassment very seriously and prohibit all forms of unlawful harassment and discrimination.” Bell and Dahlquist both declined to comment.
In 2003, a jury found Dahlquist guilty of sexual battery, quid pro quo sexual harassment, and creating a hostile work environment — though it did not find that he’d done so with the intent to harm or offend. The jury awarded Passeri $2.5 million.
Wall Street’s #MeToo Moment
Passeri’s case was just one in a wave of lawsuits and arbitrations filed in the 1990s and early 2000s by women at financial firms that had tolerated a culture of rampant sexual harassment and gender discrimination. By the time Passeri filed her case, women had already filed complaints against Chicago brokerage Rodman & Renshaw and Detroit brokerage Olde Discount Corp., along with finance behemoths such as Smith Barney and Merrill Lynch. Their claims and others that soon followed alleged pay, promotion, and pregnancy discrimination, and in some cases contained explosive allegations of hostile work environments, rampant sexual harassment, and even rape. The biggest cases of that era, which collectively drew thousands of participants in class actions, led to large settlements: $54 million against Morgan Stanley, $150 million against Smith Barney, and $250 million against Merrill Lynch.
The lawsuits created a public relations nightmare for the securities industry, which hustled to assure the public that serious reform was in the works. Surveys and awards were launched to track gender advancement; regulatory reforms were implemented. And there were signs, at first, that it was all paying off. A securities industry official testified to a House subcommittee that 44 percent of Wall Street’s employees were women in 2005, up from 37 percent in 2003. But behind the scenes, the public show of accountability for women in finance in fact marked a dark time, as companies innovated ways to protect themselves from future claims.
At a time when the long-term consequences of #MeToo on women’s careers is an open question, the lessons from Wall Street’s moment are sobering. We scoured court records, tracked down women plaintiffs and defendants in those marquee lawsuits, examined records in the arbitration database kept by the Financial Industry Regulatory Authority, or FINRA, and spoke with a dozen employment lawyers who had collectively handled thousands of discrimination cases over the years.
What we learned is that most of the accused men we were able to identify stayed in their careers. In one instance, a senior executive remained at his bank for 16 years after the firm lost an arbitration over his sexual harassment of a female colleague. We also found that, thanks to a broken system that allows brokers to exclude harassment and discrimination cases from their regulatory records, some became serial offenders who hopped from job to job in finance while continuing to harm female colleagues.
In sharp contrast, the careers of most of the women who brought harassment and discrimination claims were disrupted.
Employment attorneys confirmed that pattern. Several lawyers said that in their experience, most women across industries who spoke up about harassment wound up leaving their jobs — whether they got fired, quit, or agreed to leave in a settlement — while most of the men who created a hostile environment either stayed on at the same firm or quickly found employment elsewhere.
Douglas Wigdor, whose New York law firm Wigdor LLP has represented women in cases against Harvey Weinstein and the accounting firm Ernst & Young, said it’s “very uncommon” to see a woman stay at her company after complaining. Tammy Marzigliano, a partner at the New York employment law firm Outten & Golden, said women’s outcomes can be brutal: “Women who are brave enough to stand up against sexual harassment often find themselves ostracized and jobless,” while harassers often “walk away unscathed.” The very act of going public can poison a woman’s chance of finding future employment. According to Gary Phelan, a Connecticut employment lawyer who represented several women in the Smith Barney case, a job candidate with a public record of suing her former firm “often scares an employer off.”
Academic research bolsters these findings. A study published in Gender & Society in 2017 found that 79 percent of women who were the subject of unwanted touching or multiple harassing behaviors left their jobs within two years, compared to 54 percent of women who did not experience harassment. Harassment led to women experiencing “significantly greater financial stress,” the authors wrote, adding that victims often suffered substantial career disruption. A 2016 report on women in finance from the consulting firm Oliver Wyman found that some millennial women were stunned when they discovered how few women were in the business. The experiences of millennial women, the report said, “remain disappointingly similar to those of more senior women who joined the financial services industry in the 1980s and 1990s.”
The Doors Are Kicked Open
Wall Street only opened its doors to women in any numbers in the wake of a landmark settlement against Merrill Lynch in 1976, in a case filed by a woman with impeccable business credentials, the late Helen O’Bannon. O’Bannon had graduated from Wellesley College and earned a master’s degree in economics from Stanford; she’d worked for the House Banking and Currency Committee, the Treasury Department, and the Office of the Comptroller of the Currency. Despite her background, she did not make the cut at Merrill Lynch when, in 1972, she applied for a broker position in the firm’s Pittsburgh office. Yet four men, none of whom had more than a bachelor’s degree, landed broker jobs in the same office. One had dropped out of college due to poor grades. Two had flunked the company’s aptitude test, according to Merrill’s 1976 consent agreement with the federal Equal Employment Opportunity Commission. In the settlement, Merrill agreed to spend $1.3 million on recruitment and advertising in order to bring on more women and people of color as brokers.
Marybeth Cremin, lead plaintiff in a class-action gender discrimination lawsuit against Merrill a generation later, in 1996, knew that she owed her job there to the O’Bannon case. When she applied for a position at the firm in the early 1980s, “Merrill Lynch at that point was under EEOC guidelines and the agency was checking numbers.” Women suddenly had opportunities at other brokerage firms at risk of EEOC scrutiny. At a 1985 job interview in the Garden City, New York, branch of Shearson Lehman — a predecessor to Smith Barney — broker Kathleen Keegan recalled that then branch manager Nicholas Cuneo was blunt about why she got an appointment to meet him. He said the firm was “forcing quotas of women” on him.
Women of that era thought the biggest battle was over once they’d gotten in the door and finally had a chance to prove themselves. For many, the worst was yet to come.
At firm after firm, women were met with a corporate culture that tolerated cruel or brutal harassment, offering protection to abusive rainmakers, according to lawyers who filed cases on their behalf. The women who made it through the doors “were not wanted,” said Linda D. Friedman, whose Chicago law firm brought several of the earliest gender discrimination cases against Wall Street firms, including Rodman & Renshaw, Olde Discount, Smith Barney, and Merrill Lynch. Their male colleagues made that clear, finding a variety of ways to make the women arrivals feel uncomfortable. Friedman recalls one client whose colleagues pitched in for a male stripper to perform in her office on her birthday. Dressed as a police officer, the man said he was there to discuss the woman’s parking tickets; Friedman said he then handcuffed her client to a chair and “stripped in front of the entire office.”
Finance has always been notable for its potent combination of money and power, a toxic mix that can fuel hostile work environments and aggressive harassment. A pair of Cambridge University neuroscientists found in a 2008 study that while traders were making money, they had elevated levels of testosterone, a hormone associated with aggression and irrational behavior.
At firm after firm, women were met with a corporate culture that tolerated cruel or brutal harassment, offering protection to abusive rainmakers.
The industry’s tendency to coddle and protect its star rainmakers is so pronounced that many in the insurance industry exercise caution when deciding whether to underwrite a brokerage firm for a sexual harassment policy. In a report earlier this year, insurance expert Richard S. Betterley noted that eight of the 32 insurance companies he polled said they were not underwriting financial firms for policies that protect them against sexual harassment claims.
In the 1980s and 1990s, the culture of misogyny was pervasive. Nancy Thomas, a named plaintiff in the Cremin class action, said that she received a gift box at the office one day in 1991 and opened it to discover a dildo and lubricating cream. Darlene L., a vice president on the municipal bond desk at Shearson Lehman Brothers, told arbitrators during hearings in 1994 and 1995 that her colleagues hooked up a bra on the trading desk into which the guys shot tennis balls.(We are omitting the last names of women complainants we could not locate or who chose not to participate in this story.) When a male colleague suggested she look in his desk drawer, she opened it to find a dildo. A woman who was called as a witness in Darlene L.’s case testified that two male colleagues sent her a calzone in the shape of a penis.
Even star producers were targeted — in ways that devastated their careers. Susan Bell, now O’Rorke, one of the litigants against Olde, said she was regularly and publicly berated by the firm’s founder and CEO Ernest Olde despite — or perhaps because of — her status as a top earner, a “Super Broker,” in company parlance. At one meeting, he said he’d be happy to replace women with computers, because computers “don’t have periods.” At another, during a year when she was the single largest producing broker at the firm, she recalls Olde screaming at her in front of her colleagues and suggesting she look for a new job. “Ernie had made it very clear from the very first time I ever met him that he didn’t like women working at his firm,” she said, “and this was just the culmination of a lot of anger about my success.” Ultimately, Olde sabotaged O’Rorke’s career, transferring her to a new location and redistributing her clients to other brokers. Ernest Olde is now deceased, and Ameriprise Financial, which absorbed Olde through a chain of acquisitions, declined to comment. Morgan Stanley, which absorbed Shearson and Smith Barney, did not respond to queries for this story.
Having lost the clients she had worked years to accumulate, O’Rorke was forced out in 1993, later filing an arbitration claim that alleged she was forced to resign as a result of untenable job conditions and had been subject to sexual harassment and a hostile work environment. She said she later settled, but cannot discuss the terms. Her career since then, she says, has been a challenge. While she has worked in the industry for more than half of the intervening 26 years, it’s mostly been in positions where she dealt with institutional investors or worked as support staff — not doing the job she loved, working directly with retail investors.
The cases of that era, like O’Rorke’s, were not exclusively about sexual harassment. But many women who filed claims alleging that their careers had been undermined by inferior pay, limited chances for promotion, misogyny, or brazen theft of their accounts say that harassment lurked in the background.
In a memo she prepared in the 1990s, and in a recent interview, Keegan, the Shearson Lehman broker, recalled that in the late 1980s, men in the bullpen often belched, passed gas, and told off-color jokes. When she returned from attending a friend’s funeral one morning, she looked up at the blackboard in the room to see that a colleague had written in chalk, “Kathleen gives good head.” Furious, she reported the incident to Cuneo, the branch manager, only to hear him feign surprise that such behavior went on at his branch. “He started to tell me something about how he was upset to hear what happened and that it was aberrant,” she said recently. “I said, ‘Please, don’t even do that crap with me.’”
There was never much love lost between Cuneo and Keegan, who had a reputation for pushing back. She once told her boss that an initial public offering he was pushing — for a friend’s company — was “a piece of crap.” And she refused to succumb to pressure to drum up transactions just for the sake of pocketing commissions, preferring to be protective of the interests of her conservative clients. Cuneo got his revenge. At morning meetings, she said, “he’d humiliate me because I wasn’t pushing commission business.”
After months of berating Keegan in front of her colleagues and asking her when she’d resign, in 1988, Cuneo put a male broker in charge of the accounts she had worked for years to accumulate, effectively putting her out of business, Keegan said.
Keegan left to set up a solo brokerage operation out of her home, from scratch. Her earnings plummeted. “It was tough for a long, long time,” she said, until she finally successfully rebuilt her client list. “I never wanted to leave Shearson.”
Yet seven years after she was pushed out of Shearson, Cuneo — who has since died — retired with full benefits.
Cremin, the Merrill plaintiff, also lost her accounts, after spending 13 years building them up. When she came back from a maternity leave in 1995, her boss started pressuring her to give up her clients. With the writing on the wall, Cremin says she agreed to switch to a job in financial planning if she was able to determine who got her accounts. She spent three months transitioning her clients to new brokers; once they were all reassigned, she was fired. Like Keegan, Cremin says it was a slow, tough recovery, marked by substantial lost earnings. Though she now has a successful retail client business at Morgan Stanley, she says it took her eight or 10 years to get back to where she’d been.
“We All Felt Lucky”
Stacy Passeri came from a home where education mattered. Her mother got a law degree at 21, and her father was a college administrator. From an early age, she was taught that straight A’s and a college degree were the passports to a successful career. But Passeri also got another message from her mother: “Carve out your ability to take care of yourself,” to avoid being financially dependent on a man. Passeri was finishing her junior year at the University of California, Berkeley when she dropped out to start selling real estate. Eventually, a stock broker she’d sold a house to set her up with some interviews in the brokerage business. The branch manager in Shearson Lehman’s Larkspur office was so impressed that, in 1986, he invited Passeri into the company’s elite training program.
Shearson rolled out the red carpet. The firm flew her from San Francisco to New York City for a trainee orientation. She and the other out-of-towners were thrilled by their first trip to the city. They went to the ice rink at Rockefeller Center, ate at restaurants in Little Italy, and were wowed by an elevator ride to the top of the World Trade Center. “We really felt it was very magical,” she says. “We all felt lucky to be in the program. We all felt nervous and excited.” Shearson’s CEO, Peter Cohen, appeared at a gathering of all 400-plus trainees — Passeri estimates only five of them were women — to welcome them and warn that their ranks would shrink week by week as it became clear who would, and would not, make the cut. Cohen was welcomed, Passeri recalls, “like he was God entering the room.”
She survived orientation to become one of only two women in the Shearson bullpen in Larkspur. But then, bound by management expectations that women wear skirts or dresses, she became the recipient of unwanted attention from a broker who sat nearby and routinely dropped comments about wanting to find out what was under her skirt. A few male colleagues told the broker to knock it off, but he’d have none of it. “He was like, ‘I’m the biggest producer in this office — I don’t have to stop,’” she recalls. It was a refrain that would become familiar to women at Shearson.
Eventually, a higher-level manager found Passeri a spot at another branch, closer to where she lived. There, she thrived, arriving at work before 6:30 each morning and mining the phone book for potential investors she’d cold call and persuade to buy bonds.
Her baptism by fire paid off. First, the insurance company Connecticut Mutual tapped her; later, Ohio National recruited her to be a regional vice president. After that, she took the job at Pacific Life, where sexual harassment brought her insurance career to a grinding halt.
Even as many women in finance were being relegated to arbitration, Passeri was able to file her claim in court, so the public record in her case is more robust than most — and her jury award was more substantial.
Still, she describes her court experience as harrowing. Each morning, as she rode the elevator up to the courtroom in downtown San Francisco, she would brace herself. Dahlquist would be “standing there when the doors opened,” she said, “and harass me all the way into the courtroom.” Sometimes he would remark on how she looked. Other times, he’d attack the merits of her case, telling her, “You know you’re not going to win this.” One morning he blocked her way into the courtroom to tell her that what she’d gone through “wasn’t that traumatic.”
The stress of the trial, and the months of anxiety preceding it, took a toll. “At one point, I remember just walking down the street crying — just crying — because I felt so isolated and so alone,” Passeri said. Although her lawyers had taken her case on contingency, the trial was still expensive. She said she almost lost her home paying for more than $100,000 in depositions and other litigation costs. “I decimated my 401(k),” she said. And the full $2.5 million award never materialized. Pacific Life threatened to appeal, pushing Passeri into settlement talks that ended with a confidential resolution whose terms she’s barred from discussing.
Plaintiffs in such cases, employment attorneys say, typically settle for a reduced amount.
An Opaque Regulator
Since 1972, rules have been in place requiring all disputes between firms and their brokers to be heard in arbitration. Get a license to be a broker, or any other financial position where you deal with the public, and you were cut off from the courts. The mandatory arbitration agreements didn’t affect every Wall Street employee — only those who needed a license to do their jobs. That number was just over a half million Wall Street workers in 1995, the year before the explosive sexual harassment lawsuit was filed against Smith Barney.
One of most dramatic institutional changes sparked by Wall Street’s #MeToo moment in the 1990s was a decision by the Securities and Exchange Commission: broker licensing documents issued by the National Association of Securities Dealers, a FINRA predecessor, would carve out an exemption for discrimination claims, opening a window for individual women to have their cases heard by a jury.
But most women never got that chance. Firms revised or established their own mandatory arbitration policies to keep claims out of the courts, a maneuver that would not only limit liability — awards are historically much smaller in arbitration — but keep sexual harassment claims out of the public eye. Passeri was only able to sue in court because Pacific Life was late to the party.
Once brokerage firms began to implement sweeping in-house arbitration policies, public allegations of sexual harassment on Wall Street became increasingly rare. In arbitration venues, the media and the public are shut out, the public has no access to the documents, and brokers found liable for harassment are not required to disclose it in the public database called BrokerCheck. While FINRA requires its brokers and other licensees to disclose “investment-related” complaints filed by customers, the association has no parallel requirement if a licensee has been sued for harassment or assault. Even when a broker is charged criminally for an action unrelated to investing, FINRA only requires disclosure if it’s a felony charge.
The only public-facing documents about arbitrations are the arbitrators’ summaries of awards they make in cases they hear. Using these, The Intercept and Type Investigations dug into 30 years of harassment cases heard by arbitrators at FINRA. Our review of these cases, from 1988 to 2018, reinforces a pattern: Here, too, the careers of most women complainants appear to have stalled, while perpetrators typically skated by without public consequences.
Of the 55,000 arbitrations during that period, we used search terms to identify a total of 97 harassment claims. Women prevailed in only 17 of them, an average of only one every two years in an industry known for fostering hostile work environments for women. Academic research has shown that most employment arbitrations settle before hearings begin, meaning the vast majority of disputes never made it to FINRA’s slim public arbitration record at all.
Once brokerage firms began to implement sweeping in-house arbitration policies, public allegations of sexual harassment on Wall Street became increasingly rare.
Within the 17 cases where women complainants prevailed, we found only nine named perpetrators, all of them men. Of these, not a single one had a BrokerCheck disclosure referencing the decisions against him — until we brought one of the cases to FINRA’s attention. And we found only two alleged perpetrators who may have lost a job as a direct result of his sexual harassment. One of them, George Tamborello, a former broker at Empire Financial Group, was, in February 2007, “permitted to resign from Empire during an internal investigation” into violations of company policy, including claims brought by two former female employees, according to state securities records.
Tamborello declined to comment. Asked to comment on these findings, FINRA spokesperson Michelle Ong said FINRA believes harassment “has no place in the work environment,” but points out that its industry oversight “is based on our statutory mandate and focuses on investor protection and market integrity.”
That same year, another accused broker, Douglas A. Potter, and his firm, A.G. Edwards & Sons, were ordered by arbitrators to pay a female broker $3.5 million related to sexual harassment and retaliation — the single largest arbitration award for sexual harassment in FINRA’s database, which includes records from two FINRA predecessors.
In December 2005, while the sexual harassment claim was still moving through arbitration, Potter was “permitted to resign” due to a “violation of firm policy” unrelated to securities, according to state securities records. A disclosure like that is a red flag for a potential harassment case.
Yet Potter was hired just three months later by Raymond James Financial, where regulatory records show he worked until last year, long after his record-shattering arbitration judgment for harassment entered the public record in 2007.
Potter remained at Raymond James until March 2018 — when he was let go just two days after The Intercept and Type Investigations emailed the firm queries about Potter’s harassment history. The firm declined to comment but reported to regulators that Potter was simply laid off as part of a “reduction in force.”
Neither Potter, nor the woman who won the case, today a broker at Wells Fargo, responded to inquiries — though she, unlike many of the women whose cases we examined, has remained employed as a broker at the same firm where the harassment occurred. A spokesperson for Wells Fargo, which acquired A.G. Edwards, confirmed that the award was paid by the predecessor firm and said that “harassment of any form is not tolerated” at Wells Fargo.
In our research, broker after broker remained employed after losing a FINRA harassment case. San Francisco-based Sutro & Co. spent so much paying out a sexual harassment settlement to the sales assistant of one of its brokers, Raymond K. Bramer, that the firm filed a case against Bramer to recoup some of the costs. But the harassment was still no career-killer: Records show he transitioned seamlessly in 1995 from Sutro to Wells Fargo, where he stayed for more than two decades. His only employment gap since then was for six weeks, between the time he left Wells Fargo and joined Securities America in 2017. He was one of the few accused brokers who spoke with me; when I asked about the Sutro case, he said, “I don’t know about that. That was long ago. We settled everything.”
“I didn’t harass anybody,” he insisted, adding, “If a woman says anything about anybody, you’re gone.” When I then asked whether he was claiming he never harassed her, he said, “I don’t think I did. Who knows?”
Sutro was acquired by the Royal Bank of Canada, which declined to comment.
Frederick A. Hessler, a former managing partner at Smith Barney, lost a sexual harassment case before arbitrators brought by health care analyst Alicia DeGaetano. Hessler, she said in an interview, grabbed her and kissed her, and promised career advancement if she would agree to go on a getaway with him. But Hessler, who did not respond to queries by phone or mail, remained at Smith Barney for another 16 years before retiring in 2013 and joining the boards of directors of several nonprofits. DeGaetano, in sharp contrast, lost her career. Today she runs a gluten-free bakery in Southern California and sells her products at farmers markets.
She said in an interview that she loves her life now but the experience “brought me to my knees.” For a time after she left Smith Barney, she was living on unemployment checks and worked as a cashier at a local deli. After years of lost earnings, she lives with “a lot of fears about how to take care of myself when I get old.”
We heard such regrets from other former plaintiffs. “I never realized my full potential,” said O’Rorke, the former Olde broker. “I just wanted to be a broker. I really loved my clients. I loved my job.” Another woman who lost her career as a broker after filing a complaint was humiliated to admit that she now supports herself as an Uber driver.
“You Don’t Know Who You’re Fucking With”
Another A.G. Edwards broker, a rainmaker named Mario Ferrari, also kept his career in the wake of damaging allegations — in his case, for sexual harassment and retaliation. His sales assistant, Sandra D., sued the firm in federal court in Orlando in October 2001, saying that Ferrari had “on a continual and constant basis” made sexually vulgar comments, touched her inappropriately, and asked her to have sex with him. According to her civil complaint, the firm fired her in retaliation after she filed a 10-page internal complaint about Ferrari. The case was sent to arbitration, where — despite claims by A.G. Edwards that Sandra D. had made mistakes on the job and Ferrari “cherished” his wife — arbitrators ultimately awarded her $1.8 million. Ferrari, reached by phone, declined to comment. Wells Fargo, which now owns A.G. Edwards, declined to comment on Ferrari’s case.
Transcripts of the arbitration closing arguments, filed in the firm’s court appeal of the arbitration award, provide a rare glimpse into the stories that are locked behind FINRA’s closed doors. Sandra D.’s lawyer, Bradford Gucciardo, painted a damning picture of A.G. Edwards, arguing that the firm had gone to great lengths to protect its star broker — and the firm’s culture of abuse. Indeed, Gucciardo said, A.G. Edwards didn’t even call Sandra D. as part of its investigation into the complaint she’d sent to management. Nor did the firm take action, Gucciardo said, when Kimberly L., another woman in the office, complained about Ferrari’s harassment. Gucciardo said the branch was so out-of-control that employees with complaints often took them to officials at a different office, on the assumption that they’d get no satisfaction at a branch so highly dependent on Ferrari’s big commissions. Management at the branch even tried to push Kimberly L. to recant her grievance. Gucciardo said the day after Kimberly L. complained to human resources about Ferrari, Ferrari confronted her and said, “You don’t know who you’re fucking with.”
When Kimberly L., who declined to comment, complained about Ferrari to an office administrator, Gucciardo said, she got a blunt response: “There’s nothing we can do. Mario is Mario. Deal with it.”
Despite Ferrari’s history, anyone looking up his state regulatory records today will find only that he was “permitted to resign” from Edwards in October 2001, the same month Sandra D. filed her suit, because of “unacceptable business practices.” (Ferrari had also racked up three customer complaints over issues such as unauthorized trading in the previous three months.) He landed a new job at another brokerage firm just five days after being shown the door at Edwards and stayed in the securities business for another 13 years.
Sandra D., reached through her attorney, declined to comment. But FINRA records contain no indication that Sandra D. remains in the industry. And arbitration transcripts indicate that the experience was devastating for her. Her lawyer described the harassment as so traumatic that, in an attempt to stave off future abuse, she underwent breast reduction surgery. She also faced a barrage of claims during the proceedings, with Edwards alleging that she had been fired for poor telephone etiquette, improper dress, and surfing porn sites. That last claim, her lawyer said, was based on the slim fact that pop-up porn had appeared on her screen while she was checking stock prices on a free website.
After Edwards appealed, Sandra D. settled for an undisclosed, likely lesser, amount.
The careers of other alleged serial harassers have thrived. Take the case of Mark Grant, who was the target of complaints by multiple women at two separate firms in the 1990s.
Grant had been an executive vice president and head of the bond department at Chicago’s Rodman & Renshaw Inc. in 1992 when Susan Jaskowski, now Mendelson, the firm’s former head of human resources, sued the brokerage firm, saying she’d been demoted after returning from maternity leave and replaced by a man who was paid 40 percent more. She did not name Grant as a defendant, but alleged that while she was in her HR role, Grant had instructed her to present only “young, attractive females” as job candidates, and, during her pregnancy, touched her stomach and made comments about women’s breasts getting larger when they were pregnant.
The following year, amid reports that several other women had filed harassment complaints against Rodman with the Equal Employment Opportunity Commission, state officials in Illinois said that they would bar the firm from participating in a state bond deal, an embarrassing setback for the firm.
Just days later, another allegation against Grant emerged. Jeannine F., a sales assistant at the firm, filed a civil complaint in U.S. District Court claiming that Grant had made unwelcome sexual comments to her and referred to her as “white trash.” Jeannine F., who could not be reached for comment, described one incident when she bent down to put scratch remover on the leg of Grant’s desk only to realize that he was looking down her blouse. “You are going to make a good little housewife someday,” she recalled him saying.
A year after that suit, another Rodman sales assistant, Caroline B., filed a lawsuit naming Grant as a defendant. She alleged in her complaint that Grant told her that her job description was “flat on her back” and that he “leered at and made comments about” pregnant women’s breasts. Caroline B. left the industry and today sells real estate in Washington State; she did not respond to requests for comment.
Despite the growing trail of complaints against him, Rodman told regulators that Grant was discharged due to “mana[ge]ment restructuring,” and within a month, Grant had landed a job at a New York brokerage, Josephthal Lyon & Ross. While he was at Josepthal, the Mendelson and Jeannine F. cases settled.
Within six and a half months at Josephthal, Grant was the target of no less than six sexual harassment claims, according to a complaint the firm filed against him with the National Association of Securities Dealers, a FINRA predecessor. Documents show that Josephthal was seeking $387,596 to cover settlement and legal costs related to Grant’s alleged campaign of harassment. Though Grant denied harassing one plaintiff and said he’d taken “no inappropriate action” with respect to the others, the FINRA panel found him liable to pay the firm “compensatory damages” — a mere $22,000. As the summary referenced other claims against Grant, such as breach of contract, these modest damages may not even have related to sexual harassment. And Grant’s records show that he left the firm voluntarily, moving on to Prudential Securities shortly after he left Josepthal.
Buried in the award summary was a troubling line. Arbitrators noted that Josephthal’s president had discussed the previous allegations with Grant when he was hired in 1994 and that “Grant agreed to be careful so that similar allegations would not arise,” meaning the firm was well aware of the past allegations about his behavior when it made the hire.
Despite the history of allegations against him, Grant’s career thrived. In January 2018, after Grant had done stints at six different firms since becoming a broker in 1975, the Los Angeles-based investment firm B. Riley FBR announced that he had joined as managing director and chief global strategist. A press release quoted the CEO saying, “We’re thrilled to have Mark join the firm” and boasted that Grant had been selected as one of 15 “Bloomberg Prophets” — Wall Street gurus who offer insights on the markets.
Grant declined to comment, saying, “I have nothing to say, thank you. Don’t call me again, ever.” Oppenheimer & Co., which absorbed Josephthal, also declined to comment, as did Wells Fargo, which absorbed Prudential Securities. Rodman & Renshaw is today under common ownership with H.C. Wainwright, which did not respond to queries. Neither did B. Riley Financial.
But Mendelsohn told me she has since left behind her career in finance, working as a university fundraiser instead. She said she felt sad to learn that the series of complaints of sexual harassment had never impacted his career. “Money is power,” she said, “and power gets rewarded.” Of the five other identifiable women who filed complaints against the firm or Grant — Jeannine F. and Caroline B. at Rodman, and the three women whose claims were mentioned in the Josephthal complaint — there is no indication in FINRA records that any of them remained in the industry.
In another case, a trader arrested on a rape charge managed to survive with his career intact.
In the weeks after the collapse of Lehman Brothers, traders on Wall Street were hitting the bars. On one high-stress day, a female support staffer on a Merrill Lynch sales desk in New York got together with a few of her colleagues to unwind at a P.J. Clarke’s after the market closed. She and three others had drinks at the bar, shared a bottle of champagne at the apartment of a colleague, and then wandered over to Fanelli’s Cafe in SoHo. After the group called it a night, she invited a co-worker from another desk, Ken S. Kim, to stop by her apartment to smoke a joint. While at there, she would later tell police, he raped her.
Kim was arrested on a charge of third-degree rape, according to his FINRA records, and Merrill terminated him. But Kim pled down to “coercion in the second degree,” a misdemeanor. It took him only five months to find a new job, as a director in the New York office of Samsung Securities, where he still works. Kim’s victim was not reachable for comment, but FINRA records show no indication that she ever returned to the industry after leaving Merrill in 2011. Queries sent to Kim by certified mail to Samsung Securities, his current employer, went unanswered; Samsung itself did not respond to emailed queries; and Merrill Lynch declined to comment.
You’ll Never Work in This Industry Again
Whether after FINRA arbitrations or major class action suits of the 1990s and 2000s, it was exceedingly rare to find a man who suffered lasting consequences for harassing women. But we found striking instances of men who paid a price for speaking out on behalf of harassed women.
That is how trader Jay Hohmann claims to have lost his job at DLJ Securities in 1998. Hohmann testified in an arbitration case on behalf of his colleague Marlene Jupiter, a senior vice president who says her male colleagues mocked her constantly, calling her a “bitch” and a “lesbian.” Jupiter recalls one trader telling her that if she were the only woman on a Navy battleship and arrived nude with $100 bills pasted to her breasts, she “still couldn’t get laid.” A winner of DLJ’s coveted “Super Achiever” prize, she quit her $850,000 a year job quietly. Only later, when she was up for a dream job at a new firm and her old boss, called for a reference, allegedly described her as utterly incompetent did Jupiter, furious, decide to file an arbitration claim.
Hohmann, who said he overheard the manager smearing Jupiter that day, would wind up as a key witness. But in a closed-door meeting at DLJ headquarters, Hohmann said two company attorneys became “very hostile and argumentative” and stood over him, “toes to toes, knees to knees, so close that if I had tried to stand up from the couch they would’ve been in my space.” Feeling intimidated, he lied when they asked if he had had any contact with Jupiter; in fact, he says, he’d called her to report her manager’s disparaging comments. DLJ fired him and added a note to his regulatory records that he had “made intentionally false statements.”
Jupiter lost. A lone dissenting arbitrator, the only woman on the three-person panel, found that Jupiter had been humiliated and degraded by colleagues and noted that Jupiter took a $600,000 pay cut to leave DLJ, adding, “It defies common sense to believe that any reasonable person would leave such an economically beneficial situation unless the working conditions had become too painful to endure.” Karina Byrne, a spokesperson for Credit Suisse, which acquired DLJ, said by email that the bank can’t comment on a 20-year-old arbitration related to allegations against a predecessor company “as none of the individuals currently work for Credit Suisse.”
Twenty years later, Jupiter lives in Florida and is involved in two private equity ventures. She said that recalling what happened to her and Hohmann “still gets me sick to my stomach.” Harassers don’t get hurt, said Jupiter, “and the women get destroyed.”
Hohmann said that he, too, is out of the industry, unable to find a job in finance once that “false statement” mark was put on his regulatory record. Today, he relies on income from renting an apartment in his home and taking on handyman jobs.
A man who stood up for Stacy Passeri met the same fate. Jim DeMuynck, an insurance executive at New York Life Insurance Co., became friends with Passeri after the two met at a conference; he also did occasional business with her. One time when they got together with Dahlquist for a business meeting at a restaurant, DeMuynck said he saw Dahlquist “put his hand under the table and start putting his hand up her skirt” — an episode DeMuynck would later recount to Passeri’s jury.
Passeri suddenly excused herself to go to the restroom, DeMuynck recalls.
In the weeks leading up to the trial, DeMuynck’s name landed on the witness list, and he recalls several frightening, anonymous calls that came into his work phone. One caller told him that if he testified in the case, he wouldn’t live to see the weekend. Another said that the “fancy blue tie” he was wearing that day might wind up turning red. Yet another threatened that if he testified, he would never work in the industry again. Sometimes the voice would be mechanically altered. “It got to the point where as soon as it got dark, I didn’t want to go outside of my house,” he said.
Despite the calls, he testified at trial, weathering an effort by the defense attorney to discredit him by falsely claiming he’d had a romantic relationship with Passeri. Shortly afterward, New York Life fired him. DeMuynck believes that his tight-knit industry was blackballing him for testifying. “I had never done anything wrong or anything to ruin my name,” he said, “and all of a sudden it was like I had leprosy.”
“Any allegation that Mr. DeMuynk was retaliated against is totally false,” said Jacqueline Meere, a spokesperson for New York Life, adding that the company has “strong policies against sexual harassment and retaliation.”
But Nancy Erika Smith, a New Jersey employment lawyer who has represented such high-profile women as Gretchen Carlson in harassment cases, said that’s the way the system works: “An employee of one company who helps or supports an employee of another company will be retaliated against,” she said. “It violates the code.”
DeMuynck ended up becoming an EMS first responder, and later moved into a sales job in another industry. He calculates his cumulative lost income at more than $1 million.
A Long Island Country Club
The most legendary case of Wall Street’s #MeToo era was the one that became known as “The Boom-Boom Room” suit, filed two decades after O’Bannon’s historic settlement with Merrill that had ushered women into the industry.
It involved a hard-partying Long Island branch of Smith Barney, where the larger-than-life branch manager, Nicholas Cuneo, called the branch “the biggest whorehouse in Garden City” — and brashly informed female job candidates that he didn’t pay them the same stipend he paid the men. Down in the branch’s dingy basement, Cuneo and his cohorts had set up a party room where they hung a toilet bowl from the ceiling and kept a plastic garbage pail to ice the beer. Male brokers said women would be “dealt with” in the party space, which they christened “The Boom-Boom Room.”
Pamela Martens, a female broker at the branch, entered the Boom-Boom Room once, only to have Cuneo grab her and kiss her on her lips. Martens had been challenging gender discrimination at the branch since 1988, when the firm was known as Shearson Lehman Brothers, before it was bought by Smith Barney, writing to the CEO at the time that women were “not wanted” and that a male broker had recently told a visitor they’d be getting rid of all the women because “they’re not working out.”
Six years later, after no meaningful interventions from management, things had only gotten worse, and Martens decided to reach out to Smith Barney’s new chief operating officer, an up-and-coming executive named Jamie Dimon. On Oct. 3, 1994, she sent Dimon a six-page missive: “I am writing to request your review of a systemic problem of sexual harassment, sexual discrimination and lewd conduct” by Cuneo, her letter began. After the letter to Dimon — who directed Smith Barney’s HR and the legal departments to look into her allegations — the retaliation against Martens was immediate. She got word that Cuneo had told several brokers he would snap her neck if her complaints hurt his career.
In the end, management sent Martens a letter telling her to stop making trouble and then found a reason to fire her — that she’d refused to attend mandatory meetings where colleagues who had allegedly harassed her would be present. Although she would wind up as the lead plaintiff in the historic 1996 lawsuit against the firm, she objected to the settlement terms and opted out. Smith Barney ultimately paid out $150 million, but Martens never received a dime.
Martens was ultimately able to rebuild her business; now retired as a broker, she writes a blog that exposes wrongdoing on Wall Street. Another of the three original plaintiffs quit and never worked in the industry again. Only one managed to keep her job at the branch.
As for Cuneo? Seven years after Martens first spoke out, dozens of Smith Barney moneymakers toasted Cuneo at his retirement party. At a Long Island country club, with an exquisite golf course as a backdrop, brass from New York City headquarters and Long Island managers feted Cuneo’s decades at the firm. Management had already wrapped up what the firm described as an “intensive review” of Cuneo and his branch. Yet Cuneo’s departure, according to his regulatory record, was a “normal retirement.”
“They protected him right up to the end,” says Keegan.
A Trail of Abuse
If it weren’t for the extraordinary opacity surrounding sexual harassment at financial companies, Passeri might never have crossed paths with Mike Dahlquist.
Ten years before Dahlquist assaulted Passeri at those client meetings in San Francisco, a colleague of his, Erin R., filed a civil complaint against him. The two had worked together at an insurance firm, Equitable Life Assurance. Erin R.’s lawyer described the complaint as so graphic that it “needed to be delivered in a paper bag.”
Like Passeri, Erin R. had reported to Dahlquist, who in the late 1980s was a district manager for the firm in San Francisco, where Erin R. was a sales agent. Like Passeri, she had to accompany Dalhquist on field calls to clients.
Erin R. had just graduated with an MBA in the summer of 1989 when she interviewed with Equitable. On August 7, she signed a three-year employment agreement.
She said in her complaint that only two weeks after her hire, while she was in the passenger’s seat of Dahlquist’s car returning from a business meeting, he exited the 101 freeway, stopped his car on a side street, and pulled his erect penis from his trousers. With the doors and windows locked from the driver’s side, he reached over “and pushed her head on his erect penis in an attempt to force her to orally copulate with him,” according to her complaint. He then ejaculated.
Erin R.’s horrifying depiction of sexual assault went on for pages. There was the ride back to the office after a client visit two days later, when Dahlquist again tried to force her to touch his penis and “almost careened into a commercial eighteen-wheel vehicle.” Another time in the car, this time in standstill traffic, he took his erect penis out of his trousers and shoved her left hand back and forth on it, again ejaculating. In the complaint, she says she tried to free her hand but “was unable to overcome his strength.” In another incident, he called her into his office, locked the door behind her, and tried to force her to have sex. That time, the complaint says, she “managed to escape his grasp.”
A month after that frightening incident, Erin R. was fired by Dahlquist, purportedly for “an attitude problem, aversion to directions, resistance and resentfulness.” She told the office supervisor about Dahlquist’s assaults and suggested that the “attitude problem” Dahlquist had referred to was her resistance to his assaults. The supervisor told her that sort of workplace conduct was considered “normal,” according to the complaint.
Dahlquist denied Erin R.’s allegations in court filings, but she, Equitable, and Dahlquist later reached a settlement — a confidential one.
While Erin R. did not respond to queries, her complaint describes the traumatic impact the experience had on her. She was “unable to sleep at nights and often awoke screaming because of nightmares,” according to the complaint, and suffered from depression, irritability, nausea, migraine headaches, and paranoia in the wake of the assaults.
Dahlquist remained at Equitable for 17 months after the lawsuit was filed, and started a new job, at Transamerica Financial Resources, immediately after he left.
The settlement was confidential, and Erin R.’s civil complaint was not disclosed in Dahlquist’s regulatory record. Neither Equitable nor Transamerica responded to queries.
When Passeri later learned that she would have to report to Dahlquist at Pacific Life, she was only aware of whispers about him in the office and his proclivity to make inappropriate remarks. It wasn’t until Passeri filed suit herself that her lawyer obtained several depositions that Erin R.’s lawyers had taken and Dahlquist’s full history as a serial predator came into view.
Officially, Passeri had won. But over time, she began to see that win as “a scarlet letter.” She found herself mostly unemployed or working as a consultant for 11 years after the trial, returning to the insurance business only in 2013 and then leaving the industry altogether. Today, she is a business analyst for a company that advises small and medium-sized companies on financial and management issues. The interruption to her career and well-being was “huge,” she said, with earnings losses well over $1 million.“I would be in a much better position today,” she said, had Dahlquist never harassed her.
The traumatic work experience at Pacific Life still haunts her. To this day, when business travel takes her to airports near where Dahlquist lives, she gets nervous. Her fear is so unrelenting that when we met at a restaurant near her home, she asked that I not reveal the location in this article.
Despite the two cases against him, Dahlquist’s career appears to be intact. He declined to comment for this story, but records show that, apart from a nine-month period of unemployment after the Passeri trial, he has remained gainfully employed in the financial industry. He left Pacific Life in May 2003, a month and a half after the jury verdict against him. By February 2004, he was working in the industry again and has been affiliated with brokerage firms, investment advisory firms, and insurance companies in Georgia, Maryland, Connecticut, and Colorado ever since. Today he is registered as a broker with the Leaders Group in Colorado, which did not respond to queries.
Still, today, FINRA’s public dossier on him makes no mention of his earlier settlement with Erin R. or of Passeri’s jury verdict. According to his regulatory records, his departure from Pacific Life was voluntary.
The financial industry wrote the book on silencing the claims of aggrieved employees, winning Supreme Court battles over mandatory arbitration three decades before the New York Times and the New Yorker told the harrowing stories of women who’d been subject to the predations of Harvey Weinstein. In the years since the court’s pro-arbitration decisions in 1987 and 1991, both involving brokerage firms, Wall Street has had plenty of time to make gender discrimination complaints disappear into an opaque arbitration system where the names of violators rarely appear and legal precedent isn’t strictly binding. While on September 20, the House of Representatives passed the Forced Arbitration Injustice Repeal, or FAIR, Act, which would ban companies from using mandatory arbitration clauses in contracts with consumers and employees, that bill now faces a tough hurdle in the Senate.
Was there a Harvey Weinstein on Wall Street? If so, his victims were long ago ordered into private arbitration or gagged by nondisclosure agreements. While Michael Steinhardt, the retired hedge fund founder, made headlines earlier this year for “a pattern of sexual harassment,” he was accused by women at organizations seeking his philanthropic contributions; no allegations emerged from the locked-down world of finance. (In a statement to the New York Times, Steinhardt said that while he’d made “boorish, disrespectful” comments, he had “never tried to touch any woman or man inappropriately.”)
Forty-three years after the O’Bannon settlement, employment lawyers say the flagrant harassment and assaults of the early decades are now far more rare. “It is easy to forget where we came from when assessing where we need to go,” said Linda Friedman, the attorney who played such a large role in the earliest cases against Wall Street. “My clients see light and are proud of their roles in the battle. Like any movement, you make progress and there is a new normal. You then want more progress. But we are quite far from the groping days.”
Yet sexual harassment has not gone away altogether, several employment attorneys say; rather, it has gone into hiding, moving from public scenes in the office to one-on-one encounters where harassers can avoid witnesses.
With regard to gender discrimination in general, it would be hard to make a case that Wall Street has implemented dramatic change. I offered industry officials a chance to supply data showing that women stockbrokers had made progress, but was stonewalled. When I asked the trade group Securities Industry and Financial Markets Association, or SIFMA, what proportion of stockbrokers were women back in 1996, the year the Boom-Boom Room lawsuit was filed, and how that has changed today, spokesperson Katrina Cavalli said by email that she didn’t have those numbers and sent me to FINRA. When I contacted FINRA, which oversees brokers’ records, a spokeswoman said FINRA didn’t have those numbers and suggested I contact SIFMA. Next, I tried Merrill Lynch, which had set a target, in its settlement extension with the EEOC in the O’Bannon case, that 25 percent of its new broker hires would be female. When asked how many of Merrill’s brokers were women today, spokesperson Bill Halldin declined to comment.
A speaker at an industry conference in May cited data from a 2018 SIFMA diversity survey, reporting that only 17 percent of brokers in the industry are women. That’s 8 percentage points lower than the level the EEOC set for Merrill Lynch 39 years ago.
In one of the critical court cases from the 1990s, Merrill Lynch’s 1998 settlement with women in the Cremin case, the firm agreed to substantial changes in its procedures for distributing accounts of departing brokers. When a broker retires, quits, or is fired, the remaining salespeople stand to benefit greatly by taking over the departing brokers’ accounts. The women who sued Merrill had claimed that branch managers, most of whom were men, favored male brokers when it was time to distribute those accounts. In the settlement, the firm agreed to begin distributing those “based on non-discriminatory standards.”
But just as firms found a way to work around FINRA’s decision to allow discrimination claims into court, some male brokers found a workaround to the account distribution reforms. Many now work on teams, said Friedman, and many of those are all-male. If a broker retires or quits, his accounts would simply stay with the team members left behind — unavailable to others in the branch. “This is the reason that the repeated lawsuits are necessary,” she said. “We have to stay vigilant.”
The accountability failures have left their mark. A survey of financial advisers earlier this year by Investment News found that nearly 80 percent said sexual harassment remained a problem in the industry. A solid majority of women surveyed — 60 percent — said they had personally experienced sexual harassment at work.
Meanwhile, the leaders in a position to drive institutional change remain stubbornly male. Data from the Government Accountability Office paint a distressing picture of women’s ability to advance into management on Wall Street. GAO reports show that women’s share of management positions in the securities industry has been flat. One GAO report found that women held 32.4 percent of management positions in the securities industry in 2015; an earlier GAO report found that women held 33.8 percent of management positions in 2004.
Likewise, women who bring harassment cases today face the same hardball tactics that employers used in the 1990s and early 2000s, according to employment attorneys. “I don’t see any change,” said Nancy Erika Smith, the New Jersey employment lawyer. “It’s still attack the victim, obstruct discovery, delay the trial. That’s the playbook.”
Research assistance: Elena Mejia-Lutz, Richard Salame.