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September 30, 2003

The Life and Hard Times Of a Former Sales Trader

By John A. Byrne

The high-profile career of an ambi tious sales trader is still in the news. It is a drama that has rocked the trading industry because of its leading character, Deborah McCrann, 49. She was once an influential OTC managing director at Smith Barney.

The details of her 12-year career were recently laid bare when McCrann alleged she suffered gender discrimination at Citigroup's brokerage unit. She lost all but one of her claims against the firm in arbitration but is considering an appeal.

In one claim over pay, a three-person alternative dispute-resolution panel noted that the "overwhelming weight of the evidence indicates that the compensation system, despite including a number of highly subjective factors, actually operated very much in McCrann's favor."

Now comes the latest significant chapter. The case is shaping arguments in the last of the so-called Boom Boom Room class-action lawsuits, according to legal experts.

The controversial Boom Boom Room case, filed in 1996, stems from allegations of sexual harassment against a group of Smith Barney female workers. Some 70 out of about 1,900 cases have now been settled, costing Citigroup about $100 million. McCrann's was the most prominent. She rose to the top ranks of Smith Barney, one year earning nearly $1 million. McCrann's career was capped by a major accolade. She was featured on the cover of Traders Magazine seven years ago as part of the Dream Team, a group of successful Wall Street women professionals.

But her career was all but a dream, according to McCrann's own testimony. She claimed she was sidelined for promotions, had a title yanked from her and then restored soon after she returned to work after a bout with cancer. McCrann claimed she was denied the power due her even as a managing director. In 1997, a pregnant Ms. McCrann was a leading contender to run the OTC desk at Smith Barney. Another strong contender, Greg Voetsch, was picked instead. She blamed her setbacks on a pervasive male-dominated trading culture. McCrann left Smith Barney in 1999 and filed her lawsuit.

The panel, citing evidence of illegal gender bias, pointed to testimony about McCrann's pregnancy by her former supervisor, Robert DiFazio. "I know she was going to have to take time," said DiFazio, who in 1997 ran Smith Barney's equities division. "It didn't bother me at all that she was pregnant. But whether or not she was going to be able to spend the time to actually perform the job and to be a mom and do all that, yeah, we factored it in, sure. We were concerned."

The panel found it, "hard to imagine sentiments more universally regarded as symbolic of illegal gender bias." The panel ordered Smith Barney to pay Ms. McCrann's legal fees associated with her claim that she was passed over for promotion. But it didn't award punitive damages.