Tales From the Boom-Boom Room, Women vs. Wall Street by Susan Antilla
Susan Antilla presents a powerful and startling indictment of the sexist behavior of stock brokers working for Wall Street and its offshoots, specifically Smith Barney’s Shearson/American Express office in Garden City, Long Island. Women struggled to be hired, and then found that the men in charge of their careers practiced all sorts of sexual harassment and intimidation, from jokes to displays of sexual prowess, physical contact and threats of rape. As she describes, the bosses sought to bar women or trap them in low positions. While painting the broader picture, Antilla focuses on whistle blower, Pam Martens, who revealed the situation when she sued for damages. This skillfully written book reads like a fascinating novel, so graphic and dramatic that it is more like a screenplay than a report. getAbstract.com believes it will draw intense interest from everyone affected by this issue: female executives who face glass ceilings and harassment, male executives who must determine their own philosophies toward their female colleagues and human resource professionals who are charged with watching out for them both.
- In the early 1980s, a growing number of women began to enter the securities industry.
- Women found a very hostile working environment in the industry.
- One of the biggest securities firms, Smith Barney, had a network of retail brokerage companies through Shearson/American Express.
- Pam Martens, who later became lead plaintiff against Smith Barney, worked in its very successful Garden City, Long Island, Shearson branch.
- Branch manager Nick Cuneo created a fun atmosphere for Garden City brokers, who turned the office basement into the party-filled “Boom Boom Room.”
- Male brokers there subjected women to verbal harassment and inappropriate touching.
- Martens sued and began exposing the security industry’s mistreatment of women.
- When a class action settlement was offered, Martens rejected it as insufficient.
- Martens drew public attention to the abuses and her lawsuit led to improved conditions for women in the securities industry.
- She won no settlement money since her individual civil suit failed.
Tales From the Boom-Boom Room Book Summary
So Sue Me
Most women face a very hostile work environment when they sue for sexual harassment, and that’s what happened to Pam Martens when she litigated against Smith Barney in the 1990s. Women in the securities industry were initially afraid to talk about sexual harassment, but when they did, their stories of discrimination were strikingly similar.
“The most egregious sex discrimination cases settle for generous amounts, with plaintiffs promising in exchange not to disclose what happened to them – or the price they were paid for their silence.”
These women were scared to come forward for good reason: public attention provoked retaliation from their companies, ranging from subtle social and business exclusions to withdrawal of privileges. A woman who claimed emotional distress – in a climate charged by lawsuits – risked having her psychological, marital and gynecological records subpoenaed and presented to an arbitration panel. The pressure caused emotional problems for many women. Yet, those who pressed their harassment suits found that the most outrageous cases of sexual discrimination were usually settled for fairly high amounts. However, the plaintiffs had to promise to keep quiet about what happened and what amount they were paid.
“Smith Barney became less tolerant of hostile workplace incidents after the women’s lawsuit and was not shy about releasing information about firing men who were involved in improper behavior.”
As this case against Smith Barney proceeded, neither the firm nor many of the plaintiffs would discuss it. However, once the lawsuit was settled, the company became more strict about preventing sexist incidents, changed its policies and fired men who engaged in inappropriate conduct. Before that transition, women encountered difficult, oppressive conditions in the company and in the securities industry.
Insecure in the Securities Biz
By the time Pam Martens first joined the Shearson/American Express office in Garden City, New York, it had already developed a culture as a party center for hard-driving, competitive brokers. The branch was located in an attractive upscale New York City suburb, but in the office, women were treated like tramps and prostitutes by male co-workers who called them names such as “bitch” and “whore.” The men even discussed their sexual exploits in front of their few female colleagues.
“Just about everybody loved Cuneo, because he believed in fun and he believed in having his staff, mostly male heads of households, make money. Big money was spent on entertainment, too.”
The greatest bull market in U.S. history began in 1982. It was a boon for the Shearson/American Express network of 352 retail stock brokerage companies. Garden City was a celebrated office with one of the highest outputs in the system. The head of the office, branch manager Nicholas F. Cuneo, reflected the old style approach to retail sales. He was “loud, direct, demanding and frequently crude in the office,” and the men he managed were much like him. He was displeased when women started working in the office, as were many of the other men. He even told women applicants not to expect to be paid as much as men.
“The early 1980s was a time when men in branch offices of brokerage firms were encountering significant numbers of female colleagues for the first time. For some of them, it was unsettling.”
Cuneo’s hard working, hard partying office performed quite well – ranking in profitability among the top ten percent of the company’s branches. He encouraged a fun atmosphere, where drinking was common at the office and at the local saloon. After the branch moved to a flashy new site, a former furniture store, the brokers set up a party room in the basement where the furnace was located. The “Boom-Boom Room,” as they called it, was adjacent to the conference room where brokers were praised or scorned at mandatory weekly meetings. The office emphasized making the highest commissions possible, with little concern about customers. The brokers often engaged in dubious practices, such as pushing questionable stocks and exaggerating or concealing the performance of mutual funds. Punishment for such actions was rare. At the time, illegal practices, such as insider trading, were common. Speculators such as Ivan F. Boesky would soon become household names. The public was mostly unaware of boiler room tactics, such as cold call scripts filled with exaggerations.
“Cuneo’s flock of hard-charging brokers worked the phones each day in their highly competitive jobs.”
Throughout the security industry, generally, and at Shearson/American Express, in particular, women were often treated poorly, as Pam Martens found when she joined the office in 1985. She came from West Virginia’s Appalachian mountains, and had been raised in an environment that mistrusted big employers. At 35, she sought a job where she could make good money to support her young son, Sean. But when she started in the brokerage’s training program, she earned $19,000 a year while male trainees were paid $30,000.
Taking It at Shearson
Over the next decade, Martens did the best she could to survive and do well despite Shearson’s difficult environment. Her workplace was characterized by continual harassment, mistreatment of customers and fights between competing brokers. She frequently heard the salesman around the corner from her scream at paying customers. The salesmen often shouted and pounded their fists as they argued about who got what account. Marten’s first assignment was to work in the basement bullpen making cold calls for the more experienced upstairs staff. Meanwhile, veteran brokers were stocking the room with party supplies to turn it into the “Boom Boom Room.” Along with eight male brokers, she worked at first with two other women and, later, with three. They helped make her job more enjoyable.
“Up to 1984, the year that Pam Martens set her sights on Wall Street, not much punishment had been meted out for stock transgressions, which were done with a strong dash of arrogance – that is, with a win, a nod, and a quick call to a Swiss bank.”
However, these women encountered harassing incidents over and over. For instance, one broker ranted about not only women, but also blacks and Jews. Even after Martens graduated from the bullpen to her own private office, the outrageous behavior around her continued. Once, the men held a belching contest. Another time, they wrote disparaging comments on the board about the sexual practices of one of the female workers. Cuneo tried to reduce Pam’s earnings after she started doing very well. He attempted to limit her to a $40,000 a year salary after she earned $80,000 in commissions, though she refused. He also transferred some of her accounts to other brokers. Still, she managed to survive and prosper.
The Battle Begins
An event in 1994 precipitated the process that led Martens to become a lead whistleblower in the Smith Barney lawsuit. Cuneo announced that he expected sales assistants to volunteer some personal time each month at the Hospice of Long Island, his favorite charity. Employee Roberta Thorman complained that this was unfair. That, and a series of other incidents, led Martens to begin drawing parallels between Cuneo’s dictatorial ways and the oppression of West Virginia’s coal miners. She began to see the office’s other wrongs against women in this context. Even though the industry had a pattern of harassment, individual women were still isolated. In one case, Linda Atkins Smoot charged that Roger Shuster, her Smith Barney boss, repeatedly touched her inappropriately, verbally abused her and wrote a provocative letter to a client that killed one of her potentially lucrative deals.
“The public was largely oblivious to the boiler room tactics.”
Martens launched a “mass awakening” of women in the industry by meeting with Thorman and contacting some of the women who had worked in Garden City. Common patterns of mistreatment emerged. She began to believe it would be necessary to sue Smith Barney, particularly since standard complaints to the manager and the human resources department were ineffective. Accordingly, in October 1994, she wrote a six-page letter to Smith Barney’s new president James Dimon. Her letter detailed a series of complaints. She described the bad treatment several women had experienced and suggested that someone was covering up for Cuneo. As Dimon considered what to do, Cuneo struck back with a counteroffensive. Three brokers said that if she did not retract her letter, they would dig up dirt about her. She refused to back down and, as Dimon investigated, he began to realize that more and more of her allegations were true. He was under pressure to bury the charges, even when Martens herself reported that she heard Cuneo make rape and death threats against her if his career was threatened. Eventually Martens realized that she had to sue her employer.
Suing Smith Barney: Work For It
Martens hired Judith Vladeck, a 70-year old employment attorney, known for successfully suing big companies and earning settlements in exchange for her clients remaining silent about past ordeals. Vladeck spoke of launching a class-action suit against Smith Barney, preceded by filing forms with the U.S. Equal Employment Opportunity Commission (EEOC). She asked Martens and two other Smith Barney employees – Judy Mione and Lorraine Parker – to look for more plaintiffs among current and former employees. Within days, Mione and Martens began to suffer retaliation. Checks were missing from three of Marten’s client accounts; other brokers recruited her clients. Eventually, Martens was fired for refusing to attend a mandatory brokers’ conference meeting. She replied that she could no longer attend branch meetings due to “constant abuse, ridicule and harassment” at the all male sessions. She was given an hour to pack her desk and leave. After being turned down by Merrill Lynch and Dean Witter, she was hired by A.G. Edwards.
“Women were beginning to be frustrated when they entered jobs in finance and failed to be paid at the level the men were paid.”
Vladeck proceeded slowly and cautiously, accumulating research, but Martens became impatient. She found different lawyers – Linda D. Friedman and Mary Stowell at Leng Stowell Friedman and Verson – who had represented women against the Olde Discount Company. Friedman and Stowell also suggested a class action suit. When the new team filed fresh EEOC charges (a necessary prelude to a civil rights suit), they added retaliation and defamation to Marten’s grievances, since she had been fired. Her May 1996 filing became the lead claim that other female Smith Barney employees could join. The complaint was filed against Jamie Dimon and Nick Cuneo, plus the New York Stock Exchange and the National Association of Securities Dealers, the forums where most Wall Street employment cases were arbitrated. Suing them highlighted the unfairness of mandatory arbitration.
“The Garden City office was a place where rules in general seemed to be flouted. Watching out for the customer was no way to get ahead.”
The case against Smith Barney and the other defendants soon became a major news story. It exposed the pervasive harassment against women throughout the securities industry. Women from Goldman Sachs, Bear Stearns and Merrill Lynch began calling Martens to describe the discrimination and harassment at their firms. A group of female Merrill Lynch employees sued their company. Though Smith Barney and the securities industry tried to fight back, the news media displayed their discriminatory practices. In 1997, Barbara Walters and Hugh Downs did a 20/20 interview featuring stories of lewd comments, unwanted sexual advances and a boss who stripped in front of other people. The National Organization for Women gave its “Women of Courage” award to the Smith Barney plaintiffs.
“Trouble was brewing in branch offices from New York’s financial district to the Pacific Coast Highway, but women in the securities industry were in the dark about one another’s distress.”
Martens dropped out of the suit. She challenged Friedman and Stowell’s negotiated settlement, since it omitted some key principles, such as an end to mandatory arbitration. She objected that the settlement provide no lump sum or fund for women, just an internal $15 million for a diversity program at Smith Barney. Martens thought the settlement was selling out. A few other women joined her, including Judy Mione, who hired Gary Phelen at Garrison, Phelan, Levin-Epstein, Chimes and Richardson to represent them. After many hearings, the first Martens suit – now without Martens – got certified as a class action by the judge, though Martens objected. Additional class members were invited to file individual grievances. Meanwhile, Smith Barney made changes itself, such as firing some offenders, advancing women to new positions and starting diversity programming. Martens and Mione failed in their separate civil law suit. The judge ruled that because they were no longer part of the original case, they had “lost their opportunity to pursue their individual claims.” Phelan appealed, but Martens received no settlement, except perhaps the satisfaction of knowing that her case helped open the door about Wall Street’s treatment of female employees.
About the Author
Bloomberg News columnist Susan Antilla once worked at the New York Times, where she launched a weekly investing column and an ombudsman column called “Between Main & Wall.” She was the bureau chief of the Money section of USA Today and financial bureau chief for the Baltimore Sun. She was twice a finalist for a Gerald Loeb Award for Distinguished Business and Financial Journalism.