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Morning Coffee: When 38-year-old managing directors allegedly abuse 20-something analysts. Swiss bank bonus reprieve


Wall Street has long been dominated by men, but while a wave of sexual harassment allegations has swept across news organizations, Hollywood, Silicon Valley and Washington, the financial services industry has stayed out of the glaring spotlight of the #MeToo movement for the most part.

However, last week a managing director at Bank of America Merrill Lynch in New York was forced to step down – before annual bonuses were handed out – after HR investigated a young female banker’s accusation of inappropriate sexual conduct, according to the New York Times.

38-year-old MD Omeed Malik helped to run BAML’s prime brokerage business that raises money for hedge funds and was an adviser to Jon Corzine, a former New Jersey governor, U.S. senator and founder of doomed broker-dealer MF Global, which specialized in trading commodities and derivatives. Malik, an ex-MF Global employee, who through "splashy parties" attended by celebrities, had been helping to promote Corzine’s hedge fund, which will launch this quarter.

After the young woman, an analyst at BofA Merrill, complained about Malik, HR officials interviewed at least 10 people who have worked with him. Other women alleged that Malik made unwanted advances toward female colleagues and engaged in relationships with female subordinates, according to the Wall Street Journal.

After he was fired, some Bank of America executives allegedly told employees to tell clients that Malik had left the bank to pursue other career opportunities, although it privately told some clients that more was behind the move.

Malik attended prominent hedge fund conferences and threw glitzy parties, but now the party appears to be over.

Two years ago, Bank of America reached a settlement with a female MD in its fixed-income group who had filed a lawsuit who claimed that the bank fostered a “bros’ club” culture, mistreated female employees and paid them less than men in comparable jobs.

That said, BAML is far from the only bank that has experienced such issues.

In November, Morgan Stanley MD Nigel Coe was encouraged to resign after a female colleague claimed he touched her inappropriately at a company event where alcohol was served.

Goldman Sachs quietly fired a VP-level trader last year after he drunkenly bragged at a firm event that he could unhook a bra over a woman’s shirt and tried to demonstrate the technique on a mortified female colleague.

Banks and hedge funds mostly act privately to handle allegations of sexual misconduct, in many cases letting the accused employees leave quietly.

Many victims complain that departing executives can continue careers elsewhere with their reputations intact, while the accused say the rapid-fire process doesn’t allow for all the facts to come to light, according to the WSJ.

Further, mandatory arbitration agreements require employees to waive their rights to bring claims in court as a condition of employment, preventing public class-action suits that roll together claims from various accusers and requiring nondisclosure agreements in individual settlements. That keeps victims of harassment and discrimination from speaking out publicly.

Separately, things are looking up at Credit Suisse, although its bankers shouldn’t set their bonus expectations too high.

Credit Suisse plans to increase its bonus pool at least by a low single-digit percentage from last year as the bank enters the final year of its three-year restructuring plan pivoting toward wealth management and investment-banking advisory, while reducing its reliance on trading. Others speculate that the bonus pool will probably increase by about 10%, according to Bloomberg.

CEO Tidjane Thiam agreed to a lower bonus for 2016, even though the bank’s overall bonus pool increased by 6% over 2015. He said in November that bankers shouldn’t expect a big raise for 2017, since Credit Suisse has been restructuring and cutting costs for two years.

Swiss rival UBS cut the bonus pool for 2016 by 17%, but for 2017, the amount will rise by a single-digit percentage.

Both UBS and Credit Suisse are struggling with historically low volatility and will be negatively affected by U.S. tax reforms, but at least their bankers’ 2017 bonuses will be slightly bigger than last year.


Morgan Stanley boosted CEO James Gorman’s compensation by 20% to $27m, the most pay he’s received since taking the helm eight years ago. (Bloomberg)

Firms fear disclosing their CEO-to-workers pay ratio. (Bloomberg)

The big five Wall Street banks reported an average trading revenue decline of 32% for the fourth quarter and 12% for the full year. As a result, traders’ bonuses could be 10%-20% lower than the prior year, and some could get nothing at all. (Reuters)

What's decimating elite boutiques' trading desks? (Financial News)

Digital disruption, which has changed the face of trading equities, currencies and some government debt, is arriving at the syndicate desk, where corporate bonds are priced and distributed. (Bloomberg)

There’s been no time to rest for weary stock traders. (Bloomberg)

Private equity firms haven't rushed to completely cash out of companies that they've taken public, helping PE executives – who share in a percentage of the deal's profits through carried interest – to get even richer. (Bloomberg)

The Republican tax overhaul has an unpleasant surprise for PE pros. (New York Times)

Talented overachievers once drawn to Wall Street or McKinsey are instead showing up in Silicon Vally with pitches about their start-up ideas, but many lack entrepreneurial hustle. (FT)

A Deloitte consultant wrote a cringe-worthy pop song and sent it to his bosses — now it's being shared around the world. (Business Insider)

Brian “The Points Guy” Kelly, who quit his Wall Street job to travel and write about airline points programs, offers tips for sleeping on a plane. (BBC)

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Photo credit: Georgijevic/GettyImages

AUTHORDan Butcher US Editor
  • An
    4 February 2018

    Interesting article, some points I would make from what I've read are as follows.

    The age of the people involved isn't really a factor on whether or not harassment occurred (although the age of the original complainant isn't given, but estimated from her position), neither it the corporate title particularly relevant, its more whether one party had power over the other, as harassment is more to do with power than gender. In this case, it would be relevant to know whether or not the original complainant directly or indirectly reported to Omeen Malik or was otherwise was subordinate to him. In my experience in finance I've known several women who have had relationships with senior, often older, male staff for a variety of reasons – being attracted to power, financial security, in some cases for career advancement and in some cases because they like the other person. In my opinion there's nothing wrong with this unless one of the people involved is abusing their position to give or receive favours or is trying to compel the other person to do something they don't want to. It isn't clear whether Malik 'abused' the analyst, or whether he was even accused of doing so. The NYT only says he was accused of 'inappropriate sexual conduct', but what this actually means, and whether or not it actually happened or whether he was made to resign just for being accused is unclear.

    It isn't clear whether the dozen people who were interviewed by HR were interviewed in an attempt to build a case against Malik, to build a case in his support, or as part of an impartial investigation to try and establish facts. Gender, relationship with each party (whether they were friends of the accuser or friends of Malik) and possible reasons for giving the information they did is also not given. Its hard to say from the available information, but there does look to be a possibility that due process wasn't followed.

    Although relationships with subordinates (not just female) are discouraged at BAML, they are not against company rules, so it is unclear why the other women complained about Malik having relationships with subordinate female colleagues and whether the complaints would have been made had the subordinate colleagues been male. There may be some merits in the complaints – if, for example, Malik had shown favouritism towards subordinates because he was in a relationship with them at the expense of other females, he could be guilty of discrimination. On the other hand, if these complaints were made because other colleagues were jealous of the fact that Malik was having a relationship with another female subordinate, then the act of complaining about it would be sexual harassment by the complainants and HR. Without further information it is impossible to say who was harassed. Likewise, without further information as to what the 'unwanted advances' were and an investigation into whether they genuinely happened and were genuinely unwanted, it is not possible to say whether any harassment took place.

    In the Coe and Goldman cases it is not clear whether the people involved were made to resign after an investigation which proved sexual harassment took place, or whether it was because an accusation or claim was made, in which case the accused were sexually harassed.

    Mandatory arbitration agreements only apply in the US, not the EU, and are not just used in banks, but across all industries and also in consumer agreements. They cover all claims, not just harassment and discrimination. They represent a significant barrier to workers and consumers claiming their rights, including people who have been sexually harassed (including those who have been sexually harassed by way of being forced out of their job by a false allegation) in the US. They are currently being considered by the US Supreme Court, and it is to be hoped that their use will be successfully challenged. This is something I hope the #timesup movement uses some of its funds to challenge, as before people can speak up and take on their alleged harassers in court, they first need to be have the right to go to court and speak publicly. That said, I believe that BAML don't make widespread use of mandatory arbitration agreements and it isn't clear whether the accused and accusers in the Malik case or the Coe or Goldman cases had signed mandatory arbitration agreements.

    The article highlights well the concerns of accused and accusers about the way allegations are currently handled. I would add that in the current climate, there seems to be a massive incentive for any male accused of sexual harassment to be fired without due process under the guise of 'taking the complaint seriously', and no incentive to find someone not guilty and question the accuser's behaviour. This means that often the accused becomes the sexually harassed. I've even seen HR departments sexualise work related conflicts between male and female staff on occasion when inexperienced HR staff are involved. It is important that any investigation is fair and respects both the accuser and accused.

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