Illustration by Adrià Fruitós.

At 3:30 am on a warm fall morning in 2009, Glenn D. Capel, a stockbroker at Merrill Lynch, was speeding down the Interstate in his Lexus LS 400 from his home in Greensboro, N.C., toward Candor, 75 miles away. A half-hour earlier, his 84-year-old mother had called from her home in the rural town and said that her heart felt “heavy” and that she had pain going down her left arm. “I’m on my way,” he had told her.

In the cardiologist’s office hours later, Capel stepped outside the room where his mother was being monitored to check his voice mail before the 9:30 am opening of the stock market. It was then that he was dealt the day’s second blow.

“Your services will no longer be required,” said his boss, Darby Henley Jr., in a message that had landed around 8:30 am. The personal items in his office would be boxed and sent to his home, the boss said.

“I went through a number of feelings, from shock, sadness, disappointment, and anger, and finally I cried,” remembers Capel, who was one of only two Black brokers at Merrill in North Carolina.

Three years earlier, Capel had added his name to a class-action racial discrimination lawsuit against Merrill, which he now believes put a target on his back. At the time, only 2 percent of Merrill’s brokers nationwide were Black. With the firing of Capel, a onetime star broker who boasted two master’s degrees and a pristine regulatory record with no customer complaints, Merrill’s already meager tally of Black brokers was further reduced.

Capel says the company fired him because he allowed a client to pay a $262 hotel bill in violation of a rule that limited gifts from clients to a value of $100, though he tried to pay the difference. Henley did not respond to requests for comment on the firing.

A month after Capel was dismissed, Merrill sent a document to securities regulators that said he had been terminated for—in all caps—“DISHONESTY.”

And, just like that, his career in financial services was extinguished.

Capel is still looking for a Wall Street job, but the industry is vowing to change. In the wake of last summer’s unrest, Merrill parent Bank of America and other giant financial institutions rushed to make commitments to racial justice and in several cases broke an industry-wide silence, releasing statistics that exposed the paucity of Black people and other minorities in their workforces. Merrill, for instance, revealed in August that 780 of its 17,500 brokers are Black, a figure of 4.5 percent. That’s a 125 percent increase since 1994, when 2 percent of its brokerage force was Black. But in an industry with sparse Black representation, it is easy to double or even triple a minority group’s numbers. More illuminating is that the Black segment of the firm’s brokers—also known as financial advisers—grew only 2.5 percentage points over those 26 years.

The most meaningful industry changes over the past year have come on the heels of intense public pressure. In April, the giant asset manager BlackRock caved to the demands of the Service Employees International Union and agreed to begin a “racial equity audit” in 2022 that would analyze the company’s “impacts on nonwhite stakeholders and communities of color.” It already had been under a thick cloud of bad press over how it treated its Black employees.

Whether sincere or motivated by image concerns, Wall Street’s heightened passion for addressing the racism in its midst has opened an important conversation about recruitment, promotion, and pay policies in one of the nation’s most lucrative businesses. Missing from the dialogue so far, though, are some key questions: When racism does occur, how do firms treat Black employees who complain? And what happens to Black people when they take their complaints to arbitration or to court?

There’s no doubt other people of color face racism and mistreatment in financial firms, but in light of the industry’s public pronouncements supporting the values of the Black Lives Matter movement, The Nation and Type Investigations chose to focus specifically on the treatment of Black workers. In every complaint or lawsuit we investigated, we also sought employers’ responses, though in some cases they declined to comment.

We scoured court records looking for patterns in how firms handled grievances; spoke with academics, employment lawyers, and other experts; and mined a public database kept by a securities regulator to see how Black people fared in closed-door arbitration—forced on many Wall Street workers to protect their employers from public exposure in court.

What we found is that financial firms go to great lengths to keep complaints of racial discrimination quiet and push complainers out the door. Instead of responding openly and potentially nipping racism in the bud, companies often play hardball with those who complain. Black people who are forced to use Wall Street’s arbitration system face bleak prospects: Our analysis of 32 years of data shows that among 31 Black people who filed racism complaints, one settled and only two prevailed.

New court cases keep coming. In one, filed in New Hampshire Superior Court in December, Elizabeth S. Evans, a Black Latinx woman who worked at Fidelity Investments, depicted an atmosphere of rampant racism and sexism at the firm’s complex in Merrimack, N.H. Her suit described white male colleagues who said that slavery was great for the US economy, that Black people “give cops a reason to get shot,” and that women were “gold diggers” and “bitches.” She quit in 2018. The case was settled earlier this year.

Fidelity senior vice president Vincent Loporchio said the firm investigates and takes “prompt and appropriate action” when complaints like Evans’s are raised.

But Evans, who in her first year on the job was praised as “very quick to learn and master her work,” said she had complained of her colleagues’ disrespect and mistreatment repeatedly before she resigned in exasperation. Despite her complaints about one colleague’s behavior, Fidelity promoted him in 2017, and he became her boss. Loporchio said that, after an investigation, Fidelity found Evans’s internal complaint to be “without merit.”

At Morgan Stanley, just days after CEO James P. Gorman garnered praise last June for making a public commitment to diversity, the firm’s former global chief diversity officer, a Black woman named Marilyn Booker, filed a lawsuit in Brooklyn federal court saying the firm had fired her in late 2019 after she pushed to establish a program to help Black brokers. Booker, who graduated magna cum laude from Spelman College, has a law degree and received 17 awards for her diversity leadership over the years. Among the bleak statistics she cited in her complaint was that no one on the firm’s then 16-member operating committee was Black until Gorman added a Black woman in the wake of George Floyd’s murder.

Under pressure from New York City Comptroller Scott Stringer to release previously confidential diversity statistics, Morgan Stanley revealed in November that 2.2 percent of its executives, senior officials, and managers and 2.4 percent of its sales workers were Black in 2018.

In response to our inquiry, Morgan Stanley managing director Mary Claire Delaney cited a company statement from June 2020: It would “vigorously defend” itself and “strongly” rejected Booker’s allegations.

“We are steadfast in our commitment to improve the diversity of our employees and have made steady progress—while recognizing that we have further progress to make,” the statement reads, and adds that Morgan Stanley would continue its “high priority efforts to achieve a more diverse and inclusive firm.”

In March, Morgan Stanley filed court papers saying that Booker had filed sensationalized allegations that had nothing to do with the way she was treated during her “26 years of success” at the firm. In May, the two sides agreed to dismiss the lawsuit, which typically means there was a settlement. Through her lawyer, Booker declined to comment.

Apart from resending Morgan Stanley’s June statement, Delaney declined to comment on four pages of questions about the Booker case; the firm’s arbitration policies; its handling of internal complaints of racial discrimination; and a class-action racial discrimination case that it had settled with its former brokers.

When Black people speak up, the blowback can be brutal. Joan Reid-Williams, a Black woman who worked in the New York City control room at Deutsche Bank, said in documents filed in New York State Supreme Court that she’d complained to management that two coworkers were making racist and disparaging comments to her. But the ensuing investigation resulted in a written warning to Williams rather than to the colleagues allegedly making the racist comments. The firm wrote her up for violations that included setting her cell phone ring volume too high and being rude. She settled with the bank in 2014. Her attorney, Derek Sells, declined to comment on the case, as did Deutsche Bank spokesman Dan Watson.

As Reid-Williams learned, internal investigations can easily harm a complainant. But it’s impossible to say how often that happens, because these probes are typically performed confidentially. Our research revealed only one example of public data on the outcome of an internal racism complaint at a brokerage firm—in the court docket of the class-action suit in which Capel was a named plaintiff. During the exchange of documents between Merrill and the brokers in that case, Merrill revealed that employees had filed 60 formal racism complaints between 2001 and 2008. Only three were found to have merit.

Frank Paré, a Black financial planner of 16 years and former president of the Financial Planning Association, didn’t hesitate when asked how he would advise a Black broker who was thinking about lodging an internal complaint. “I’d tell them to start looking for another job,” he said.

Racism exists in every industry, of course. But on Wall Street, where the potential earning power is vast, Black people face formidable barriers. They make up 13 percent of the US workforce, but they occupy only 2.9 percent of the industry’s financial adviser jobs, according to a January report by Cerulli Associates. Those who manage to get jobs can wind up losing them after enduring racist remarks, managers who deny them privileges enjoyed by their white colleagues, and social isolation that is both painful and distracting. The financial industry is a sharp-elbowed business that requires a thick skin to survive, but the brutality aimed at Black people exacts a different kind of toll. Capel and his colleagues gave an example of the day-to-day degradation in their complaint: A Merrill Lynch manager was photographing his brokers for a bulletin board display and suggested to a Black broker that he needn’t have his photo taken. “I can find your picture down at the precinct,” the manager quipped.

On his desk at Merrill Lynch’s office in Greensboro, Capel once displayed a treasured award: a foot-long pewter statue of a charging bull sporting a brass Merrill Lynch nameplate. “You know the big Merrill Lynch bull?” he asks. “Well, I won the bull.” Capel says he racked up the most assets under management in the firm’s 1999 training program, which earned him the pewter prize.

Prior to the falling-out with Merrill, Capel’s had been a classic American success story. He was raised on a tobacco and hog farm in rural North Carolina, where his father was a steelworker at an Alcoa aluminum plant.

Capel says he was an honor roll student at East Montgomery High School in Biscoe, N.C., where he was cocaptain of the football team. He landed a sports scholarship at North Carolina State and had aspirations to be an NFL linebacker, but when his father had a massive heart attack in his sophomore year, Capel took a year off to go home and take care of his family. He later earned a bachelor’s degree in business communications and master’s degrees in business and health care administration.

As much as he loved football, for years he’d dreamed of becoming a stockbroker. In his teens, he read Bottom Line, a business magazine his father subscribed to, and became intrigued with the idea of working on Wall Street.

But when Capel got his big break as a broker at Merrill Lynch’s Greensboro location, he quickly got a taste of the bosses’ seeming disdain for Black people’s success. ‘When I’d get a sizable account, management was always asking, ‘How did you get that account?’” he says.

In his second year on the job, Capel says he and other brokers in his region were treated to a free trip to a posh hotel in recognition of their achievements. It was not the celebratory time he’d expected. Capel knew some of the other brokers but he was the only Black person in the crowd, and no one socialized with him. To pass the time while others partied, he escaped to the hotel’s workout room and lifted weights. It all takes a toll, he says. “The suffering, the social distancing, the isolation, is very hurtful.”

Capel and the other plaintiffs in McReynolds v. Merrill Lynch wound up settling in 2013, with Merrill paying $160 million to end the litigation. But the public relations hit was just as damaging. Fearful of that type of fallout, Wall Street has long fought for the right to force arbitration on customers and employees. Financial firms won key Supreme Court battles in the 1980s and ’90s that the industry has relied on to keep most of its civil rights disputes under wraps.

Today, most major investment banks require employees to agree to arbitration—a policy that the rest of corporate America has admired and copied. Goldman Sachs, UBS, and Edward D. Jones are among those who have fought and won when employees tried to pursue civil rights claims in court.

But few have gone to the extremes of Morgan Stanley, which has faced multiple racism complaints by Black former employees. In 2015, the firm sent e-mails to 36,000 workers that required them to respond to the company and opt out of a new mandatory arbitration policy if they wanted to retain the right to sue in court. The message included no hint of time sensitivity or importance in its subject line, and many employees said they didn’t recall receiving it. In the end, more than 30,000 employees failed to opt out, including several Black brokers who would later be forced into private arbitration.

Brokers use several arbitration forums for employee disputes, including the commercial operations at the American Arbitration Association and JAMS. The two forums release only bare-bones information about their awards, but the public can get a fuller picture of how Black people fare in arbitration from the Wall Street–funded Financial Industry Regulatory Authority. Along with its role as a regulator, FINRA also runs an arbitration program for its members and offers an online database where the public can use keywords to search records of final awards dating back to 1988.

We searched that database using a number of terms, including “race,” “racism,” “racist,” “African American,” and “Black.” We got hundreds of results, many of which had nothing to do with a racism claim and some of which were racism claims by other minority groups. We wound up with a list of 31 cases in which we were certain that the complainants were Black.

Only two of those Black complainants, or 6.4 percent, won their claims. Another complainant settled. In two other cases, the arbitrators denied the racism claims but awarded damages on other grounds, including retaliation.

I did a similar search of that database looking for sexual harassment and hostile environment cases in 2018 and unearthed what I then considered extreme results: Among 97 cases brought by women and decided by FINRA arbitrators, only 17 complainants won, or 18 percent. (Men who brought sexual harassment cases won 29 percent of the time.) I’ve reported on Wall Street civil rights cases since the mid-1990s and wrote a book about sexual harassment in finance, Tales From the Boom-Boom Room. Gender discrimination was and remains a serious issue in the industry, but when it comes to arbitration, Black people fare much worse by comparison.

Another striking takeaway is how little the nature of racism allegations by Black people on Wall Street has changed over the years.

In the past decade, Black brokers at Edward D. Jones, Wells Fargo, and JPMorgan accused their bosses of assigning them to the least lucrative locations. (In March, Edward D. Jones reached a $34 million settlement with Black brokers who had sued the firm.) Black brokers at Morgan Stanley alleged in a 2015 lawsuit that they were left out when management distributed the accounts of departing salespeople. A Black broker at JPMorgan said in a 2018 filing that he was interested in working at several desirable locations, but a manager said they wouldn’t be a good “fit” for him because of his ethnicity. (Harlem would be a better fit, he says they told him.)

Those cases don’t sound much different from the racism complaints filed at FINRA a quarter-century ago. Back in 1993, Stephen Collins, a broker at Great Northern Insurance Annuity Corp., complained that his bosses told him he didn’t project an image that clients could accept and assigned him to a mostly Black area of Pittsburgh. Great Northern said Collins was terminated because he failed a securities licensing exam by a significant margin. He lost his case in 1994.

Merrill Lynch broker Anthony H. Hoskins said he was told in the early 1990s that he didn’t “fit the typical Merrill Lynch broker profile” and “wasn’t what Merrill Lynch was looking for.” He lost his case. FINRA arbitration is “controlled by the industry for the industry,” he said in an interview with The Nation. “How are you gonna win?”

FINRA keeps the legal papers filed in arbitration cases under lock and key, but every so often the details become public, either because a claimant files in court despite an arbitration agreement or because a firm strikes back in the courts after losing.

Both of those factors were at work in the racial and gender discrimination case that broker Cindy R. Davis brought in 1994 against Shearson Lehman Brothers. Davis, one of the two Black people we found who won their FINRA cases, filed a complaint in federal court, but Shearson successfully fought to have it moved to arbitration. After Davis won, Shearson went to court to ask that part of the award be vacated.

That opened the door for Davis to file a public response that exposed damning arbitration testimony. Davis’s branch manager, Glenn Dropkin, was a defendant in the case, and Davis’s lawyer asked Dropkin’s boss whether there could be any evidence strong enough to bring him around to believing Davis over Dropkin. “If you received information that Mr. Dropkin had called Ms. Davis a n***** and there were witnesses present who confirmed it, would you believe it?” her lawyer asked. The boss’s answer was no.

On July 14, 2006, Glenn Capel awoke at 6 am and did what he does every morning: He prayed, took a shower, and got dressed to go to the Merrill Lynch office five miles away. He was feeling a bit anxious as he pulled into a parking space. He stopped at the newsstand in the lobby, picked up a half-dozen copies of that day’s New York Times, and took the elevator to the fourth floor, where he had a prized office overlooking a pond that drew flocks of swans and ducks.

Capel had agreed to speak with the Times about the historic racial discrimination lawsuit that had been filed the previous November—one he would soon join as a named plaintiff. In the story, he was quoted saying that it had been “a lonely struggle” being the only Black person among 40 brokers at the branch. His photo was in the business section.

He closed the door to his office to read the paper. Soon there was a knock on his door. His boss, Henley, and a compliance manager entered the room. He recalls Henley asking, “How could you do this to us?” and adding that the entire office was on pins and needles because Capel had complained publicly.

For over an hour they were encamped in Capel’s office, haranguing him with questions and comments. When they finally left, Capel made his way out to his car, figuring he’d have a late lunch after an emotional morning.

That’s when he saw the shattered glass of his car windows scattered all over the parking lot. He called the police and his insurance company and then decided to call it a day at 2 pm.

He was at home with his wife and two kids a few days later when the phone rang. He didn’t recognize the voice, but he will never forget what he heard. “You and your family need to be careful,” the man said, and then hung up.

William P. Halldin, a spokesman for Bank of America, which purchased Merrill in 2008, said the firm takes complaints of discrimination or inappropriate behavior very seriously and has a comprehensive process for filing and investigating such reports. He added that the firm was “not in a position to comment on things that allegedly were said 11 years ago or more and haven’t previously been reported to us.” Henley, who is now an executive at Truist Investment Services in Charlotte, did not respond to e-mails and voice mails seeking comment.

Capel began keeping the upsetting details from his wife because he didn’t want to add to her stress. But the pressure eventually undermined their marriage. Choking back tears, he says that his wife told him, “I don’t have the thick skin you have. I don’t think I can go through this.”

They got a divorce. He gave his keys to his mortgage company “and walked away from the house” in Greensboro because he couldn’t make the payments. Today he splits the rent on an Annapolis townhouse with a fellow church member.

Making up for some of his pain was the $250,000 award for being a named plaintiff in the lawsuit, plus the “more than a million” dollars for his individual claim. That’s a substantial amount of money by most standards, and Capel was grateful for it. But to a man who grew up on a tobacco farm in North Carolina and then worked his way to success on Wall Street, the journey has been particularly painful, and the settlement money he received at 50 doesn’t match the revenue he’s lost over the past 11 years. “My best earning years have been taken away from me,” he says.

In 2019, he managed to get Merrill to delete the reference to “dishonesty” in his industry records, arguing successfully to a panel of FINRA arbitrators that Merrill had defamed him.

Even with the damning reference removed, he fears that his role as a leader in a high-profile class-action suit lingers as a threat to his career. Capel says he’s sent out well over 100 job applications since his firing. When we met in February near his Maryland home, I asked whether he’d thought about pursuing a job outside of the brokerage industry. He paused for a moment, Googled his name on his iPhone, and leaned over to show me the results: The third entry under his name was the New York Times article about the class-action racial discrimination case that had featured his photo and remarks. “Employers look and they say, ‘This guy’s very talented on paper, but is he a troublemaker?’”

Capel’s story didn’t have to end that way. But multiple obstacles would have to be overcome to change the system that has ruined his Wall Street career and those of many of his Black peers.

Regulators would need to play a more aggressive role. To some degree, that is already in the works at the Securities and Exchange Commission, where President Joe Biden has appointed a new chair, Gary Gensler, who took office in April and is sympathetic to so-called ESG (environmental, social, and corporate governance) matters. His predecessor, acting chair Allison Herren Lee, had made clear in a public statement as commissioner last year that she thought that more rigorous disclosures on climate change and diversity issues were warranted. So far, though, the agency has focused mostly on climate change. If the SEC wanted to take a stronger stance on racism, it could require that companies disclose a tally of their internal racism complaints each year and reveal whether investigations found for or against the employee.

At the Equal Employment Opportunity Commission, Biden’s new chair, Charlotte Burrows, is seeking to undo some of the damage caused by her Trump-appointed predecessor, filling open jobs and putting a renewed focus on systemic discrimination cases. Even so, the agency has brought few big cases against Wall Street firms. In an interview in the fall, before she was named EEOC chair, then Commissioner Burrows told me that cases filed against financial companies compete with those brought by employees in less lucrative industries who can’t afford a lawyer. In late April, USA Today revealed that the EEOC itself was being accused of racism by its Black employees in Dallas, prompting Burrows to order a review of the allegation.

As a self-regulatory organization for the financial industry, FINRA has been mute about its members’ settlements of alleged egregious civil rights violations over the years—and remains so. A spokesperson did not respond to specific questions as to whether FINRA might have the authority to pursue discrimination cases, but noted that its focus is on “investor protection and market integrity.”

FINRA’s own officials, however, have made comments in adjudicatory documents that suggest racism cases would be well within its reach. In cases heard by its Office of Hearing Officers and National Adjudicatory Council during the past five years, FINRA officials have said that its rules provide broad authority over members “even against unethical conduct that may not be unlawful,” including “unethical, business-related conduct,” regardless of whether it involves a security.

Bill Singer, a veteran Wall Street lawyer in New York, says FINRA thus far has not pursued racism cases despite its broad authority. “I would argue that by not prosecuting it, FINRA is condoning it,” he says.

On April 29, FINRA published a notice seeking comment on any aspects of its rules and processes that might create “unintended barriers” to greater diversity in the industry. FINRA “is committed to fostering an inclusive and diverse workplace, and to doing our part (subject to our statutory mandate) in the fight against racism and prejudice within our industry and communities,” its spokesperson said in a statement.

Brokerage firms have also shown willingness to change. People of color make up more than one-third of the current class of financial advisors in the training program at Bank of America’s Merrill Lynch, according to spokesman Halldin. And in early June, Goldman Sachs yielded to shareholder pressure and said it would undertake a review to see how forced arbitration impacts its employees. The move inspired optimism that opponents of forced arbitration are making progress in pursuing its demise.

The positive efforts are a start, but they are not game-changers for Black people who are subject to unresponsive or punitive complaint systems at work.

In February, two former BlackRock employees—Essma Bengabsia, an Arab American woman, and Mugi Nguyai, a Black man—published an open letter to the firm’s CEO asking BlackRock to fix its internal investigations process and publicly disclose a tally of employee complaints in its diversity, equity, and inclusion report. BlackRock sent a memo to employees on March 2 saying that it would set up a separate team to improve its investigations process. It is the only reform we could find that attempts to address the flaws of a complaint system.

A sign of real change would be if the failures of industry leaders to reckon with racism in their ranks took a meaningful toll on their reputations. That has yet to happen.

Morgan Stanley, for example, has been the target of multiple lawsuits—including the one by Marilyn Booker—and has employed strong-arm tactics to force arbitration on its employees. Yet, even with racial justice at the front of the public’s mind, this history has not tarnished the company’s image as an industry leader.

In December, CEO Gorman landed on a Bloomberg Businessweek list of the 50 people who defined 2020, a rarefied roster that included Supreme Court Chief Justice John Roberts, racial justice activist Colin Kaepernick, and infectious disease official Anthony Fauci. A full magazine page devoted to Gorman lauded him for his takeover prowess and Morgan Stanley’s high stock price. A member of the firm’s board called him “one of the great CEOs, not just in banking but one of the great CEOs, period.”

Even in the year of George Floyd’s murder, the firm’s civil rights failings didn’t get so much as a mention.

Research assistance by Hannah Beckler.