Smith Barney Sex Harassment Case Settles Before Arbitration

February 23, 2004 ( - A sex discrimination case against filed by a former broker against Smith Barney has settled out of court just before the matter was scheduled to go a public arbitration hearing.

The former broker, Susanne Pesterfield, was assigned for seven years to Smith Barney’s Robinson-Humphrey unit in Atlantawhere she charged that she had to endure a pattern of sexual harassment and a male-dominated culture that included trips to strip clubs, according to the Wall Street Journal. Pesterfield’s suit also charged that her male colleagues made more than she did and were given better client leads.

Pesterfield joined Smith Barney in 1991 when she went to work at Robinson-Humphrey, an old-lineAtlantafirm. (Robinson-Humphrey’s investment-banking and institutional unit was sold by Citigroup to SunTrust Banks Inc in 2001. The retail brokerage firm was retained by Citigroup and now operates under the Smith Barney name.)

The Pesterfield complaint said she expected a rewarding career as a broker when she joined the company as a 22-year-old. Instead, she alleges that she found “an environment hostile to women and in which women weren’t given the same opportunities to succeed as men were given.”Pesterfield, who is now 35 and works at investment firm Raymond James Financial Inc, detailed a litany of harassment in the office against her colleagues.

A lawyer for Pesterfield, Daniel Klein, told the Journal that his client settled late Friday but declined to provide details. Discrimination accusations have dogged Smith Barney since the 1990s.

In 1996, a group of Garden City,New York, female employees from Smith Barney shocked Wall Street with claims of discrimination and sexual harassment, leading to a class-action settlement in 1998. The case has carried the nickname “Boom Boom Room” because the Garden City branch had a basement named the “Boom Boom Room” where the harassment took place. As part of a settlement in that case, Smith Barney’s parent, Citigroup, has paid out about $100 million.