By Pam Martens: October 20, 2019 ~
Unbeknown to most Wall Street reporters today, Jamie Dimon played a major role in the 1990s in allowing for the perpetuation of an institutionalized system of sexual harassment and verbal degradation of women on Wall Street. Dimon’s role, which we will detail later in this article, is a critical backdrop for the recent Ken Fisher humiliation of women at an investment conference.
On the afternoon of Tuesday, October 8, the money manager Ken Fisher of Fisher Investments was on stage at the Tiburon CEO Summit with Chip Roame, the Managing Partner of Tiburon Strategic Advisors, the host of the investment conference. Attendees at the conference were made up of approximately 200 men and 20 women. Against that backdrop, Fisher apparently felt comfortable on stage to humiliate the women in the audience by comparing the acquisition of investment clients to “trying to get into a girl’s pants.” Another nugget of wisdom from the keynote speaker was that it’s necessary to talk about genitalia when talking to investment clients, a brain-twisting statement which might possibly have a connection to another reference he made to tripping on acid. Fisher also suggested from the stage that his employees were so loyal that he could brand their “a**” with the Fisher company name.
One male investment professional at the conference, Alex Chalekian, was so outraged by Fisher’s remarks that he posted a video about the diatribe on the same day. Other attendees have confirmed Chalekian’s characterization of the remarks. Chip Roame, on the other hand, representing the host of the conference, made no effort on stage to chastise Fisher or stop his insulting and humiliating remarks, despite being the only other person on the stage with Fisher in what was styled as a “fireside chat.”
Only after Chalekian’s video went viral and media reports of Fisher’s outrageous conduct proliferated, did Roame announce that Fisher was being barred from any future Tiburon investment conferences. CNBC reported that, indeed, Fisher had been talking about his own genitalia in a speech he gave at the “Evidence-Based Investing Conference” in 2018. CNBC reports he has also been banned from that investment conference.
Fisher manages over $100 billion for individuals and institutional accounts according to his filings with the Securities and Exchange Commission. Significant portions of that money are made up of pension funds for public workers, where the fiduciaries have a legal obligation to protect the assets from mismanagement.
We wanted to hear Fisher’s full remarks so we emailed Chip Roame suggesting that he had an ethical obligation to release the full audio of Fisher’s remarks so that each of Fisher’s statements could be heard in their full context. For example, was Fisher referring to someone else tripping on acid or was he referring to himself. Surely every pension fiduciary who has money with Fisher has a legal right to know what was said in that regard. Roame did not respond to our email. (If the Securities and Exchange Commission wants to uphold its mandate, it will obtain the full audio and release it so that Fisher’s 65,000 private clients can decide for themselves if this is the man they want to handle their life savings.)
A number of pension funds have subsequently yanked their money from Fisher and the Mayor of Boston, Martin Walsh, is to be complimented for his letter to the Boston Retirement Board explaining why he pulled the account. In that letter he said that Fisher had displayed “a profound lack of judgment.” Walsh added that “there remains a risk that such thinking runs deeper than this specific commentary, and this is not a risk to which I believe the Retirement System should expose itself.”
As someone who managed investment risks for clients for 21 years on Wall Street, I believe Mayor Walsh exemplifies extremely prudent thinking: if in doubt, get out. If a money manager’s instincts are so mummified and judgment so perverted as to think this is acceptable behavior from a stage at an investment conference, should the same man really be managing public money?
We had questions about Ken Fisher’s money management business as far back as 2012. We wrote about it here.
Now for the Jamie Dimon connection.
Dimon, when he sat at the helm of the brokerage firm, Smith Barney, in the 1990s, employed a branch manager named Nick Cuneo who made Fisher look like a third-rate misogynist. As myself and other women from that branch wrote in a Federal court filing in 1996, this is how Cuneo conducted himself, frequently before a large audience:
“a. At one of Smith Barney’s Christmas parties, Cuneo boasted to the attendees, ‘[w]e achieved the status as the biggest whorehouse in Garden City.’ b. In 1994, Cuneo left a female broker in tears after commenting to her, ‘[t]here must be a lot of pressure on you to spread your legs.’ c. Cuneo once paraded a female sales assistant around the office who had worn culottes to work that day and told her to spread her legs at each male broker’s desk so that the male broker could vote on whether the culottes violated Cuneo’s females-only dress code. d. On another occasion, after hiring an attractive female as a trainee, Cuneo openly boasted that he ‘had just hired a playboy bunny.’ Likewise, he referred to attractive females as ‘slits and tits.’ e. Cuneo told a male broker that they should all give the sales assistants a few bucks for Christmas and that the women would [engage in sex acts]. f. Cuneo yelled that an employee should ‘eat his d***.’ g. During the Anita Hill/Clarence Thomas hearings, Cuneo shouted throughout the workplace, ‘I left a pubic hair on my coke can’…
“As branch manager at Garden City [NY] Cuneo’s conduct set the tone for the office…by constructing a room in the basement of the Garden City Branch Office which he named the ‘Boom Boom Room.’ Cuneo decorated the ‘Boom Boom Room’ in a fraternity house style, including hanging a toilet bowl from the ceiling. From an oversized garbage can, Cuneo served bloody mary’s to male brokers who were summoned to the ‘Boom Boom Room’ over the PA system. There they would joke amongst themselves that female employees who did not behave would be ‘dealt with’ in the ‘Boom Boom Room’ or that sexual harassment charges would be ‘deliberated’ in the ‘Boom Boom Room.’ ”
On August 31, 1994, Cuneo took his degradation of women to the next level. He called two meetings of the 24 low-wage, all-female sales assistants who worked for the nearly all-male brokers in the branch. Approximately half of the sales assistants attended each meeting to allow for phone coverage. At his side during both meetings was a Vice President for Human Resources from the corporate offices of Smith Barney in New York City, Robin Leopold. (Remember that name because it is going to raise serious questions about Jamie Dimon’s judgment – the same “judgment” issue that Mayor Walsh of Boston so quickly honed in on in the Ken Fisher matter.)
Cuneo, with Leopold at his side, told the sales assistants that he didn’t know if what he was going to tell them was legal but he didn’t care. They were going to be required to donate their personal time to his personal charity and if they didn’t like it, they shouldn’t let the door hit them in the a**. As further detailed in the Federal lawsuit, “Cuneo told the women that they were required to work at his charity golf tournament and dress in short skirts to serve coffee to male brokers. Cuneo threatened the women that if they refused this request or his request that they do volunteer work for his charity, they would be denied raises, bonuses, or time off with pay. Cuneo also threatened to dock their pay if they took breaks to smoke.”
Immediately after these meetings with the sales assistants, Cuneo had scheduled a meeting with the brokers in this office, of which I was one of only two females present. Prior to the meeting with brokers, I had heard from multiple sales assistants what had transpired at their meetings. This was the final straw for me. If the corporation, through the silence of Leopold, was actually condoning mandatory unpaid work by the low-wage sales assistants who desperately needed their jobs, there would be no stopping the future horrors of this branch.
As the brokers filed into the expensively appointed conference room, Cuneo took his place at the podium with Leopold by his side. Before he could begin speaking, I startled both Cuneo and Leopold with a lecture that went like this: Cuneo had just destroyed the morale of this office in a single meeting. His demands of the sales assistants who desperately needed their jobs was “extortion” and he was treating them “like indentured servants.” I told him he wasn’t going to get away with it because this time there were 24 eyewitnesses. I confessed my own shame for tolerating his filthy mouth for a decade while focusing on building my own business. (In truth, I knew I had no choice but to build my business to a level that was profitable enough to escape this nut house.)
Cuneo told me that I would be thrown out of the office and there would be a celebration like the one that had occurred when another female broker had been driven from the office. My ousting occurred a little over a year later, two days after a big country club celebration was held by brokers and regional managers for Cuneo’s retirement party. Cuneo retired with full benefits. My projected $60,000 annual pension at retirement became $385.22 a month.
Fortunately, during those 11 years of Cuneo’s filthy, misogynist mouth, I had learned from books and courses and licensing exams how to invest wisely. I moved my business and my clients a few blocks down the street to A.G. Edwards and had a very happy existence there for the next decade. I retired from the industry in 2006 and began immediately writing articles on the ingrained corruption in the industry.
Throughout the three meetings on August 31, 1994 Robin Leopold, Jamie Dimon’s Vice President of Human Resources, stood silent and took no action to counter or correct Cuneo’s grossly illegal conduct. I obtained multiple, written, independent statements from eyewitnesses to confirm this.
Today, Robin Leopold has moved up the ranks under Jamie Dimon. Her title according to her LinkedIn profile is Managing Director of Human Resources at JPMorgan Chase, the largest bank in the U.S. at which Jamie Dimon serves as Chairman and CEO.
Over the next year, I spoke with enough women at other Smith Barney branches and researched its employment statistics to determine that there was a practice and pattern of driving female brokers from the branches and keeping female sales assistants from moving into the ranks of brokers.
On May 20, 1996, myself and two of the female sales assistants who were present at that August 31, 1994 meeting brought a Federal class action lawsuit against Smith Barney, also naming as defendants Cuneo, Dimon, the New York Stock Exchange and the National Association of Securities Dealers. The latter two were named because they backed a process where Wall Street firms ushered all claims for sexual harassment and illegal conduct toward workers into a private justice system called mandatory arbitration. (While the New York Stock Exchange and FINRA, the successor to the NASD, have dropped their mandatory arbitration requirements, they’ve looked the other way as the Wall Street firms impose their own requirements. Thus, that private justice system is alive and well today on Wall Street. All workers, and customers, must sign an agreement waiving their right to the nation’s courts to work for a major Wall Street firm or have an account there. Mandatory arbitration has none of the procedural protections of a courtroom, including the legal right to file an appeal.)
Our lawsuit instantly became big news because of the so-called Boom Boom Room Cuneo had created in a storage room in the basement. The case was featured on the front page of the New York Daily News two days in a row and was reported in every major business publication. Eventually, women in rogue branches of Smith Barney across the country came forward with their own horror stories and were added as named plaintiffs. The National Organization for Women named Smith Barney a “Merchant of Shame.”
Despite the numerous letters I had written to Dimon, with supporting documentation from current and former workers in the branch about Cuneo’s hideous behavior, Dimon’s media team lied to the press about the legitimacy of our claims.
In a BusinessWeek article the month after the lawsuit was filed, Mary McDermott, Dimon’s spokesperson, said this about our claims: “The suit is about one former broker and two sales assistants who are unhappy with one branch manager.” McDermott also made this absurd justification for Cuneo in the article: “There are a lot of people who think Nick is terrific.” McDermott did acknowledge in the article that at the time, with Dimon at the helm, only 8 of the firm’s branch managers were female.
What Dimon did to make sure it would be business as usual at Smith Barney, with his big producing brokers protected from charges of sexual assaults and sexual harassment, was to hire not an employment lawyer, but a tough and ethically-challenged lawyer from the big law firm, Paul, Weiss, Rifkind, Wharton & Garrison. That lawyer was Mark Belnick.
After Belnick had settled the case for Dimon, he went on to become General Counsel of Tyco International. His legal work there landed him an indictment for grand larceny and securities fraud. He was acquitted at trial but only after he had inked a retention agreement that guaranteed Belnick a payment of at least $10.6 million should he commit a felony and be fired before October 2003. [Quite prescient for an innocent man.] Any disputes arising out of the retention agreement could not go to the nation’s courts but – wait for it – had to go to mandatory arbitration.
The terms of the Smith Barney settlement were so egregious that myself and Judith Mione, two of the three original women who filed the lawsuit, didn’t want our names associated with its terms. We opted out of the settlement and never received a dime from the case.
Although we had set out to ban civil rights claims from mandatory arbitration, the settlement created an even more onerous mandatory arbitration system. One of the named plaintiffs from Florida who took her case into that kangaroo court system was humiliated by having her former friends in the branch, out of fear for their jobs, disparage her in their testimony before the arbitrators. She was awarded nothing. The lawyer representing Smith Barney in that arbitration was Brad Karp, also of Paul Weiss, who became the go-to guy for getting Smith Barney’s parent, Citigroup, out of one fraud charge after another.
The settlement extinguished all claims against the individual brokers – even those who were credibly alleged to have sexually assaulted women in the workplace. Those men continued to work for the firm for years. The settlement also imposed gag orders on claimants.
The New York State and New York City Chapters of the National Organization for Women both opposed the settlement and asked the Federal Court to reject it. In an Amicus brief filed by NOW-NYS, a lawyer and President of the organization, Lois Shapiro-Canter wrote:
“Denial of an employee’s right to have access to a judicial system confers with it the intent to deny said employee the full panoply of constitutional rights available in a free society. If this is not in fact the case, then why does Defendant Employer insist on abridging plaintiff’s right to proceed in a civil court while at the same time enabling Defendant Employer the option of doing so? Why has Defendant Employer proposed in this settlement such an onerous process for a claimant to exercise her rights, such procedure which requires unrealistic demands, deadlines, confusing requirements and a nearly impossible burden of proof to obtain punitive damages.
“The proposed stipulation is burdensome, unfair and denies workers their civil rights. The National Organization for Women-New York State, Inc. respectfully requests the Court to reject the proposed stipulation and lead the nation and disapprove mandatory arbitration/mandatory alternative dispute resolution systems in the workplace.”
The second named plaintiff on the lawsuit, Judith Mione, wrote the following in her objection to the settlement with the court:
“By settling this suit despite my opposition to the terms, proposed class counsel (Linda Friedman and Mary Stowell) have violated the test of adequacy for class representation required under Federal Rule Civ. P. 23(a)(4). Upon information and belief, I am the only named plaintiff who holds a Branch Manager’s license. The proposed Stipulation of Settlement purports to represent all females working in retail sales, et al. This would include female branch managers. By removing my voice from the terms of the settlement, by filing a motion before this Court to dismiss me from representation because of my opposition to the adequacy of the terms, proposed class counsel has violated proper representation for female branch managers while still sweeping them into the proposed class…
“Equally important, I continue to work in the infamous ‘Boom Boom Room’ branch where I have the clearest perspective on the sincerity of Smith Barney’s ‘promises’ for diversity initiatives. Despite my branch manager’s license, I am required to work as a sales assistant and fill in as a switchboard operator. Other licensed females in the branch are also required to sit at the switchboard.”
A lawsuit titled Martens v. Smith Barney, was being settled by a Federal District Court against the advice of two of the three women who had filed the case, myself and Judith Mione.
In another objection to the settlement filed with the court by a named plaintiff who had joined the suit later, Edna Broyles, a long-tenured former broker at Smith Barney, wrote this:
“$6 million becomes fixed and payable to the plaintiffs’ attorneys prior to any class action plaintiff awards for damages are paid. In addition, another $3.5 million is payable to the plaintiffs’ attorneys whether or not any damages are paid to the plaintiffs.”
The settlement was unique in the fact that no lump sum amount was guaranteed to the broader class of women but the plaintiffs’ attorneys were guaranteed a very large amount of money for settling a case before the defendant Smith Barney had even filed an answer to the complaint with the court. The plaintiffs’ attorneys were Mary Stowell and Linda Friedman (Stowell & Friedman) of Chicago.
With the claimants having to sign gag orders for any monetary settlement, it was left to Stowell & Friedman and Smith Barney to make future statements on how much the women had been awarded in their newly-fashioned private justice system. In recent years, Linda Friedman has started representing to the media that the Smith Barney settlement resulted in $150 million in awards to the claimants. No evidence of any kind exists in the public record to substantiate that claim. The $150 million has as much credibility as Stowell & Friedman’s characterization of the settlement being a “landmark” win for women on Wall Street.
Dimon, as Chairman and CEO of Smith Barney at the time the lawsuit was filed, had the power to genuinely make this a landmark win for women and open the doors to talented, ethical women from our nation’s colleges and universities seeking their rightful seat within the corridors of money and power on Wall Street.
By taking the low road, Dimon helped to unleash an era of unprecedented greed, depravity and corruption on Wall Street, culminating in the greatest financial crash since the Great Depression in 2008.
Dimon has the further distinction of having sat at the helm of JPMorgan Chase as it pleaded guilty to two criminal felony counts in the Bernie Madoff Ponzi scheme matter in 2014 and it pleaded guilty to another criminal felony count in 2015 for its role in rigging foreign exchange markets. Just last month, one of its trading desks was labeled a criminal enterprise by the U.S. Department of Justice and three of its traders were charged in the same matter under the Racketeer Influenced and Corrupt Organizations Act (RICO), a statute typically reserved for organized crime.
The bottom line here is that as long as there are men like Ken Fisher and Jamie Dimon allowed to sit at the helm of big investment firms, the United States of America will continue to lose stature and competitiveness against more forward-thinking countries around the globe.