Story 2: only last month Wall Street was buzzing about another scandal, involving the government-bond desk at Kidder Peabody. One of the firm’s top traders, Joseph Jett, was fired after Kidder charged that he had created millions in “phantom trades,” inflating the firm’s income to boost his multimillion-dollar pay. Jett, who has denied the charges, was another of the most successful blacks on Wall Street.
Among the legions of whites on Wall Street, two such events would hardly make a ripple. They see high fliers flame out all the time. But in some quarters, there was fear that these two losses dealt Wall Street’s black community a blow precisely because it is so small. “Wall Street is [still] white America’s playground,” said Raymond Lewis, a black investment manager in Cleveland. “We don’t have that many champions in that arena, so we can’t afford to lose even one,” said Alvin Styles, a Chicago ad executive.
In a profession where a legacy of discrimination and racial prejudice forces blacks to be better and cleaner than their counterparts to succeed, there was also fear the stories could add to that scrutiny. That was the note struck at a Friday-morning staff meeting at Ariel Capital Management, a black-owned firm in Chicago. At first, Ariel president John Rogers wasn’t worried about repercussions from the two cases. But, he said, “my staffers jumped on me [and] told me to wake up. They were worried that there could be some kind of backlash.”
Elitism and ethnic tensions have been part of Wall Street since the days when white Anglo-Saxon Protestants closed all doors to Roman Catholics and Jews. Since they don’t sell a tangible product, Wall Street players rely heavily on the familiarity and trust of the old-boy network, making gains harder than in other industries. Women and minority groups have made progress. But success is still easier in areas such as municipal finance, where local governments, often under black leadership, have moved to employ minority firms. Most of Wall Street’s big firms fight frequent discrimination lawsuits; Jett’s firm, Kidder, has been the target of suits charging racism, sexism and age discrimination.
Just as minority groups are proud of members’ accomplishments, any suggestion of malfeasance can be especially unsettling. When the 1980s convictions on Wall Street included many Jewish names, Jewish groups worried about a backlash. (When the play “Other People’s Money” was made into a movie, the character of a Jewish corporate raider who takes over a family business was changed into a generic “ethnic” played by Danny DeVito.)
Last week some in the business community voiced similar concerns. This may make firms “more skittish.” said a top recruiter. “It’s got to do a lot of damage to blacks in sales and on trading floors, where there is a lot of contact with people who make a career of jumping to generalizations.” Adds Alfred Edmond of Black Enterprise magazine, “Brokerages are going to put in an enormous amount of scrutiny before they promote minorities.”
Not everyone agrees. “I don’t think there is collective pain, psychic or other-wise, by blacks on Wall Street over these events” except in the mind of the media, said William Lewis Jr., a diversity expert and mergers specialist at Morgan Stanley. To draw connections between Jett, Lazard and other black professionals is “not only racist but silly,” adds Lamond Godwin, chairman of’ Peachtree Asset Management in Atlanta.
Then there’s the glass-is-half-full argument. Attorney Alan Dershowitz represented financier Michael Milken and complained that some coverage of the case was anti-Semitic. But he notes that in the exclusionary Wall Street of “25 years ago, we wouldn’t have had these problems. When the first woman gets indicted for insider trading, we’ll know that women have really made it.” Callers to a black talk show in Washington had much the same reaction in a recent discussion about racism affecting even successful African-Americans. Some were just delighted to learn that blacks like Jett were making so much money.
