Being Black on Wall Street: A Bloomberg Radio Special

I said, you've got three strikes against you. You're young, you're a woman, and you're black. And you told me point blank that Boman Sex wouldn't hire me. I wanted to achieve the American dream, and I encountered issues that held me back. And as the calls for change grow louder, what it will take for the industry to finally reform. You know, we've made progress in the law stake, but we're not where we want to be. We're not satisfied.

People just saying enough and they're taking a stay. George Floyd when we saw him bird in a public leg you can't un see it. And I think the whole country has woken up to say things have to change. That's all straight ahead on this Bloomberg Radio special. Being black on Wall Street, even after hundreds of years, black executives, traders, and investment bankers on Wall Street are rare. As of June, there were more than eighty executives at the biggest US

banks and only one was black. The numbers are similar at the biggest private equity and hedge fund firms, where pay on Wall Street is the highest. Wall Street matters both in the way it hires and the way it picks its clients. Wall Street matters because it's the most prominent vehicle of wealth in this country, and people of

color have been left behind in a big way. Black homeownership is a fraction of white homeownership, and many Black communities are left without banking services, and the biggest banks have fallen behind. University efforts. Zannelia Harris has worked all across Wall Street, from Nazdak to City Group, Edward Jones and Panty. In every scenario, she found it hard to build relationships. So many of us have gone there with the hopes of achieving success to the to then be UH,

to then deal with UH. The harsh reality of not being able to reach the levels that we've seen our white counterparts reach. And that has been disheartening for me because I wanted to succeed. You know, when I came out of college, my goal was to UM to to achieve the American dream. I wanted to achieve the American dream. And I felt that pursuing an opportunity in the finance UH field would be my ticket to achieving a certain level of success. But I encountered um some issues that

held me back. Those issues can take many forms. Sometimes it's being shut out of high level conversations. Sometimes it's clients gravitating towards bankers they know through existing networks. Breaking into finance in any meaningful way can be hard without connections. Lauren Simmons was only the second black woman to become an equity trader at the New York Stock Exchange in the two hundred twenty five year history of the trading floor.

That breakthrough happened just three years ago in I, you know, came from Georgia. I decided, you know, I really wanted to live in New York. That's very much a mindset after you graduate New Yorker l A and for me, I was open to opportunity. I end up meeting a

gentleman who worked for Golden Sacks. He was African American, and he told me point blank that, you know, Goldman Sacks wouldn't hire me, and he didn't really give me any clarity as to the reason why, UM, but he said that he would UM introduced me to a colleague that worked the New York Stock Exchange and would i'd be interested in equity trading position. And of course, for me, I was thinking, you know, minimumly, this will be a great opportunity to work for the New York Stock Exchange.

While Lauren was the second in her field, Reggie Brown was the first. When he joined the New York Stock Exchange in the nineties, he was the first and only black exchange official. For him, it was a challenge rising through the ranks. Historically, the floor businesses were always family run,

family based businesses, you know. It was large groups of family members owning the specialist firms or trading firms, and through that you had, you know, windows of opportunity for people to entry into the business, you know, And there were several people like me that that we're able to get in, but Reggie found his way to the top. Now he's known as the godfather of exchange traded funds. He's a principal at one of the largest market make is on the New York Stock Exchange. But to get

there he had to overcome overt racism. There was some recognition, I think of my talents, but also where I stood in a hierarchy. You know. I remember when I first came up of the Stock Exchange. I sat in the member's lounge and a ninety year old member of the Exchange I didn't believe I belonged there, and cleared his throat and told me to go, and I showed him, hey,

you know, I have a badge too, you know. Moving from Phildelphia to New York and inserted myself into the New York business community, there were interesting moments around just being accepted, people understanding, you know, I'm here and you got to deal with it. People have called me the

end word to my face. Um in the workplace. You know, people didn't know I was real for what I do for a living and was challenged and so you are real, you do you actually do what you do, you know, But I think anyone gets that sometimes in your life you Wall Street, you know it's a closed society, and you know it's a meritocracy, and it's very hard to get in and stay in. And once you're in environment sometimes the rough and tumble, it is not very friendly.

But is that true for everything else alive? It was a tough journey to the top for the few people of color who made it there. So far, Wall streets efforts to hire black people has fallen short, and the industry has also failed to promote most people of color. It shows in the numbers less than ten percent of middle managers are black. That number falls to less than

five percent in the executive ranks. Being the only person of color in the clubby world of finance can be intimidating for anybody, especially a young person right out of college. That's made mentors and advocates more important than ever in a place with a few and far between. So for black people on Wall Street, the search for advocates extends to other industries and rival firms. They found advocates among white colleagues and managers who had vouched for them. Carla

Harris joined Morgan Stanley in the eighties. She was one of a handful of people of color at the firm at the time, and often the only one in the room. It didn't intimidate me because that's kind of the way it was at that point. So now that and this is this is an important point because again, if you're growing up in my genre excellence, look like six white men at the top, right, That wasn't strange at all.

That's what you saw at IBM, That's what you saw at GM, that's what you saw at Morgan Stanley Golmus actually pick it right. So you knew that if you wanted to play on this playing field, that's was what you were You were going to have to be comfortable in some cases being the only and being the first. So that was not intimidating to me at all. That's just the way it was. You know. I would say I had three strikes against me. Here's what I said to myself as a first year and second year associate.

I said, you've got three strikes against you. You're young, you're woman, and your black. Carla recognized the importance of building relationships early on. In her first performance review as an associate, it left her realizing there weren't many managers in her corner. She was also working for someone that didn't see her potential. She had graduated from Harvard twice,

both for her bachelor's and then her master's degree. I was working for somebody that was really, really tough, and they instead of affirming me, they always made me feel like, you know, perhaps I didn't learn a lot enough that Harvard Business School. Perhaps I wasn't cut out for this business. So I would say, um, my interactions with this person and I worked on a lot of stuff with this person really under my my own confidence. And it wasn't

until I say that my confidence was completely busted. You had said your name is Carla Harris, I would have said, are you sure right? My confidence was that busted that that sort of bottom floor was the actual turning point for me. It was sort of getting as deep as I could in that valley where I started saying, wait a minute, Wait a minute, how why would I doubt that I could do X when my track worker says I've done X, Y and Z. Wait a minute, Is it that I'm not that good? Or is it that

that person really can't teach me? So I started looking through a different lens and realized that I had the power to also say no, Moss, I'm not working for this person anymore. Carlo was able to find her own path in the industry. She networked with other associates, found better managers and a mentor, a black woman who rose to the top of a company outside of the financial industry. For Reggie Brown, the climb to the top followed another path.

He took pride and ownership of his spot as the only one in the room at the New York Stack Exchange. I've always saw race as an attribute because I realized that a lot of times I was the only one in the room or I stood out because I was six five a black dude, And everyone remarked in that because it was such a unique thing to be an

environment that I was in. And so through ambition and talent and drive, I created my opportunities, and there's opportunities were asking, you know, the economy putts along the way. One of the most impactful experiences that I've I've had where I gave a presentation to the Bank of Japan um sitting governors of the Bank on household This was two and a half years ago. Household inclusion of Japanese households into the Japanese stock market and competition and marketplace

by introducing ets and what at a risk. And after the presentation, there's about thirty people in the room, so it was it was a private session with three voting members and their staff members. And after the my presentation at the Bank of Japan and Tokyo, you know how they do the typical bow. So impactful to me, and it was so unique that UM actually stood it here.

You know, that was impactful. Having my grandparents be able to come to the New York Soccer Change lunching Club when it was a lunching club and have men and white coats serve my grandparents and having the significance of them being there in that environment for them to see Um that you know, I had a place there was impactful for them in particular. Well, Reggie stayed in the industry.

Zanalia Harris ultimately stopped working at large banks after she lost her job at Mary Lynch during the financial crisis. She then struck out on her own, writing a book, becoming an industry leading financial advisor and building programs for a woman to expand their wealth in her neighborhood in the suburbs of Washington, d C. She says large bank have largely failed her community. I live in a predominantly black community, and when I look around that community, I

don't see representation from Wall Street there. So what I have seen over the years is that they've come into my community. UM, I felt like they came in, they didn't stay long, they didn't work within the community, and then they left. And so that was the reason why I started my own I wanted to serve my community. I wanted to be I wanted to be active in my community, and I wanted to see wealth built in

my community. So some of the you know, do I feel that this what I'm hearing from Wall Street and what I'm hearing right now amongst companies, whether or not they want to support us and help elevate us so that we can um achieve a level of success. What would make that authentic for me is seeing at the executive level, and I'm talking about in C suite, seeing people of color. Um, they're represented as we know, UM the Fortune five hundred companies have no Black women as

um as CEOs. So when I see change, and one of the things that I've heard over the years is Oh, there isn't a pipeline. I don't understand what that means, because UM, in my community, I see a plethora of highly educated UM African Americans who are ambitious, who are zoous, who are um want to make a difference. So I don't that there's a big disconnect with whether or not there's a pipeline. There is a pipeline. Zanalia Harris is not alone and saying Wall Street has left her community behind,

both as employees and as clients. When it comes to accessing financial services, Government data shows that black people are less likely to access home loans and credit cards. The number of black owned banks in America has declined to just twenty one firms two decades ago there were four already eight Black ownership and stock markets is drastically behind white ownership. In fact, black people own less than five

per cent of the stock market. Wall Street is a story of both hope and disappointment for people of color. The top ranks are so white that black people, who often encounter bias, often choose to work elsewhere. Lauren Simmons left her job at the New York Stock Exchange just a few years after joining. She appreciated her time there, but ultimately the juice was not always worth the squeeze. She now has two TV shows in development, a podcast,

and a book in the works. The reality is I was only making twenty dollars working at the New York Stock Exchange. That's not enough to even breathe in New York City. If I had to do it again, I still had the mentality that if I worked for the New York Stock Exchange, this would be a great foundation to lead to better opportunities. And of course it did, but I don't think that is the story for many people you know that come to the New York Stock Exchange.

You know, most people under the age of thirty, they do come to the trading floor thinking that this is going to be a platform or a gay way to other great opportunities. And the reality is that equity traders are slowly, slowly, slowly dwindling. And the job itself is you know, algorithms and way more passive. So the opportunities that you would get once before just aren't there for

financial reasons. No, I don't think I would come back, and I don't think I would, you know, advocate for people to go to the trading floor, but I do think, you know, being in a space within the financial industry and getting paid what your worth. I would definitely tell people to go out and do that. But I do think the lack of diversity over decades um, anything past

two thousand anything, is unfortunate. And I do think that we will see a lot of especially gen Zer Is just creating their own firms and they're going to make diversity and inclusion a top priority. While Lauren left Wall Street, Carla Harris stayed she found a fulfilling career at Morgan Stanley, but also recognizes serious flaws in the industry. She says, if Wall Street doesn't change, at risks turning away the best talent, with people of color turning to different industries

or striking out on their own. And for younger generations, diversity is becoming more important than ever. What I've been saying to companies that I get an opportunity to consult with these days is that excellence looks very different for millennials. Zers they have a mother that has been a CEO

or an executive director of a major nonprofit. They have seen women lead, and they've gone to these elite schools where on their left is a smart Black kid, on the right is the smartest spanning kid in front of them as smarty kid. Behind them a smart American Indian kid, and they are all outstanding. So that's what excellence looks like. Two millennials and zers. And if you do not have that represented in your leadership, they are not that interested

in being a part of that organization. There's a large camp of people pushing banks to start recruiting outside of IVY League ranks at historically black colleges and in cities they haven't considered before. But Lauren Simmons says that might be hard for firms after decades of doing things the same way. Yeah, they're gonna have to be okay with

putting themselves in different scenarios. Obviously, how their recruiting process over years, centuries has not worked to get different type of talent, and so they're gonna have to go out to They can, you know, find people in New York,

they can find people in Middle America. But they're going to have to stop with the traditional going to IVY leagues and and picking from a certain demographic and and as well as talent trying to apply for jobs They're going to have to put themselves in uncomfortable situations and go beyond their mind and be able to apply for

jobs that are outside of their comfort zone. There are executives like Henry Travis, founder of legendary private equity firm KKR, who believe it could take generations for Wall Street to make its ranks more diverse. Zannelia Harris sees an untapped talent source in her decades and finance. She says Wall Street could look to other industries to fill its top ranks, look at people who are transitioning into other opportunities. Because I also feel like we always go back to getting

people out of college. But as I stated, we need people in executive level. What about pulling people from other industries who have the management skilled, the leadership skills UM that can be trained position into the financial services industry easily easily. UM. So, I think that it needs to be a two fold recruitment not just from college students but also from upper level management and transition them, transitioning them into the financial services industry. Those are two things

that I think should be connected. After years of failing to improve on diversity and its ranks, Wall Street is grappling with how to make lasting change. Black Americans make up more than of the US population, but the top ranks of corporate America look nothing like the country. It serves. Elite roles that financial firms are overwhelmingly white, and the problem starts at the top, but middle management also lacks diversity. Banks and money managers don't only fail to recruit diverse employees,

they also failed to promote them. Now, many people of color on Wall Street are speaking about race for the first time in their careers. That's the case for Reggie Brown, the so called godfather of e t S, says the death of George Floyd, followed by protests across the country, was the real catalyst. You know, seeing um George Floyd being murdered by Ay Coop with his hands in his pocket.

You know, it's just morally reprehensible, you know. And I think because we're all at home, working at home from COVID, everyone had opportunity to kind of focus on it. And I think what's different is I think there's more people of color in their agency to speak freely about these issues. After George Floyd's death, Mark Mason, the chief financial officer at City group, and the only black executive at a top six bank at the time, wrote to his firms

more than two hundred thousand employees. It was a tough decision for him to speak out, but he said he had to confront racism, that they all had to confront racism. His words set off a wave of remarks from black executives across Wall Street that in turn created a dialogue in the workplace that few had seen before. Mike Novograts was a rare white millionaire hedge fund type to walk in the New York City protests against police brutality and

racial inequality that began in May. Seeing those large groups of young people forcing change has compelled him to start thinking differently. And I think walking in the protest was that was telling. It was a rainbow coalition. Uh young, black, brown, you know, Asian, of white, every race and ethnicity. Uh, y'all all young. I think I was double the age of the average participanting. It really felt spectacular and it was a I think a real recognition in New York.

Uh that things are changing. Uh you can't watch, you know. I always say people ask me why I got into criminal justice reform, and one of the biggest reasons. I met Brian Stevenson, and when you hear his story of from slavery to to mass incarceration, and you hear Brian articulate this, you know, multi hundred year uh process of having to compressed. You know, African American community, you can't hear it like you hear the truth, and you can't on hear it. Well, we saw George Floyd, when we

saw him murdered in a public legion. You can't un see it. And I think the whole country has woken up to say this. Things have to change. Yet Mike Novegrats still has a long way to go in his own hiring practices. He launched a cryptocurrency investment company in Galaxy Investment Partners, Yet three years later he has more than sixty employees and only two are black. Even wall streets upstart firms, the ones with the best opportunities to hire people of color, are failing to do so. Listen,

changes top Um. We looked at ourselves and you know, we had had a few more African American blacks and and they left for various reasons. Uh, And so we're certainly not doing well enough. I'm committed I told our our our management, our leadership team that we've got to do better. We will get a black you know, member

of awards soon. Um and listen. I made the mistake of thinking, hey, we're a startup company and it's it's harder to start going to start of industry where there are not a lot of black resumes and you're going as fast as you can. And so almost gave myself the excuse that we'll get it there. And that's a mistake. I raised my hand and say it was a mistake. Uh, it's harder. There are a lot of black resumes, and so we gotta look a little harder. You've gotta look

in places and are you're not used to looking. And so, you know, cheers on you for calling me out. Uh, We're going to try harder. And that was the case even in the best financial market in history. What's challenging is that Wall Street has a tendency to slip behind on diversity efforts when times get tough, and right now we're in the deepest economic slump since the Great Depression.

For Morgan Stanley's Carla Harris, her experience on Wall Street has seen banks hiring when markets are up then firing diverse hires when downturns call for a wider set of layoffs. The reason why I think we aren't farther along in financial services broadly, and certainly walls three particularly, is that I feel that diversity has been a bullmarket phenomenon. When things are going really well, then people are focused on it.

They are spending lots of money, lots of resources, big spotlight on building the pipeline and getting lots of entry level folks in of color. And then when you get to a bear market environment, which in my experience has happened every four ish years, then it doesn't go away, but the spotlight intensity goes from ten to one or two. And then when have a bear market environment, you have restructurings, you have reductance and force, and obviously small populations are

disproportionately hit. And then when we get back into an upturn, that's when you look around and you go, oh my gosh, where's my pipeline, and you've got to start all over again. So I think it's been this continuous cycle throughout my experience, which is why I don't think we are farther along now. I am first to say that we have made some progress, because it used to be so knowledge that I could name every person on Wall Street, let alone every senior

person on Wall Street. And I am happy to say that I cannot do that today. So by definition, we've made some progress. About one month after the George Floyd protests began, Morgan Stanley CEO James Gorman sent a memo to more than seventy thousand of his bank employees. He accelerated the promotion of one black woman to the firm's most senior governing body. At the same time, he named a black woman to the firm's management committee to oversee

diversity and inclusion. Gorman tells us Morgan Stanley is pouring tens of millions of dollars into diversity efforts. Days later, the bank denied a systemic bias claim in a lawsuit filed by the firm's former head of diversity, Maryland Booker, who was hired in and worked as a global head of diversity for sixteen years, said white, male centric leadership had refused to adopt her plans to address racial bias.

The bank denies the claim. James Gorman has since pledged to be more aggressive and reaching communities of color to show that Morgan Stanley and Wall Street can be an attractive place to work. It's a society issue, and it starts with education, works its way through the college as the universities, and then took places of employment. And you know, we've made progress in the last secad, but we're not

where we want to be. We're not satisfied. We've been looking at other other academic institutions for a long time. We have very strong relationships with the predominantly black colleges in the US, but we're going to get more aggressive than that. But it starts earlier. We have to introduce a much broader community to the kind of career opportunities that you can have at a place like Morgan Stanley.

Whether it's writing new code for some of bad technology platforms, whether it's working with our marketing teams, whether it's being a trader on a foreign exchange days, whether it's managing wealth for individuals across the country. There are so many different careers and we have to open people's eyes to that. It can be dangerous to think that this time is different,

but Reggie Brown believes it. He believes that social accountability can go a long way and forcing companies to hire differently, promote more people of color, and reach specific goals for black faces in the top ranks. I think it really is the population of younger people just saying enough. And I think it's a sistant or isn't really I really, I really think that's really the reason behind what we're seeing.

They're saying enough, and they're saying it's not fair, and they're making a conclusion and they're taking a stand, you know. And I think that's what's different about this time. And I think other times we come together as a nation, but it's around like bigger events, Challenger exploding, you know, not eleven all right, I mean that's the biggest one. But as far as a man being dragged behind his car James Byrd in Texas, you know that there wasn't

a big focus on it, you know. I can't recall there was something that everyone was just ghastly about and said let's come together and fix it. Can't recall it. There are still concerns about whether Wall Street is sincere about its efforts to boost the number of black people and its ranks. There's skepticism that more black faces will make it to the c suite, and if they do,

what will they face? Will they face resistance when speaking out about struggles in the industry, Will unconscious bias or even outright bias have white clients flocked to white bankers instead? And is the struggle for equal pay and equal opportunity something that will ever go away? On Wall Street? There's been no universal black experience. We spoke to about two dozen people of color and finance, and the range of outcomes was wide. Some made it to the tub, some

left disenchanted, Some became rich. Some were so marginalized they had to sue. Some believe that Wall Street is hopeless, but some are more optimistic than ever. You've been listening to a Bloomberg Radio special, Being Black on Wall Street. Our thanks to the dozens of people who spoke to us for this report and special. Thanks to contributors Max Abelson, Kelsey Butler, editors Christine Harbur and Stryker McGuire. You can get more on this and other stories online at Bloomberg

dot com and on Twitter at Bloomberg Quicktake. Our program was produced by Colin Tipton. I'm Shinnali Bassik, and this is Bloomberg