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March 1, 2001

Old Boys Network Reigns, Jackson Says: Still There Are Minority Success Stories

By Sanford Wexler

Also in this article

  • Old Boys Network Reigns, Jackson Says: Still There Are Minority Success Stories
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Making it on Wall Street is tough. If you are a minority, it's even tougher, according to civil rights leader the Rev. Jesse Jackson.

"Historically, Wall Street has had nepotism," he said in an interview with Traders Magazine. "It had an incestuous relationship with the Harvard Club, the Yale Club...They locked people out." [see interview, page 31. ]

Today, minority groups account for about one-quarter of the American work force. Minorities on Wall Street, they complain, too often are working in lower echelon jobs. Minorities in the U.S., in fact, are represented more in professions such as law and medicine than they are in trading rooms and brokerage offices.

A survey by the Securities Industry Association, which campaigns for diversity in hiring practices on Wall Street, noted that African-Americans, Hispanics, Asians and other non-whites, comprise 13 percent of the headcount in institutional and investment banking. Retail brokers and registered representatives account for about six percent.

According to the U.S. Equal Employment Opportunity Commission, some 20,000 African-Americans work as traders or as other securities professionals in the U.S., in an industry that employs hundreds of thousands - mostly white male pros. The Rev. Jackson and other advocates of diversity say minorities are underrepresented in Wall Street upper management.

The reasons why minorities - that is, people identified as non-white - have not caught up with the white population on Wall Street is the subject of debate and much controversy.

Some pros, whites and minority people, believe the days are gone when minorities endured blatant discriminated in the American work force. They argue that efforts to ensure the minority population on Wall Street reflects their numbers on Main Street is a dated and unacceptable form of social engineering.

The Rev. Jackson, however, is adamant that pressure must be kept up to ensure minorities get a fair shake.

"We want a balance of trade," Jackson said. "If you trade with us we want to be part of the board of directors, the management team, the employment, the vendors, the legal team. We want to be trading partners vertically and horizontally."

Some minority Wall Street entrepreneurs agree. "The money management business, the brokerage and trading business, have not been inclusive of women and minorities," said Ted Siedle, founder and president of the minority-owned investment banking firm, Benchmark Financial Services in Lighthouse Point, Fla.

The industry, nonetheless, is changing. More minorities than ever have hung out their shingle. A small number have risen to the very top. An African-American, E. Stanley O'Neil, was named to head Merrill Lynch's brokerage operations about a year ago. Some firms have introduced programs to hire more minorities.