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(Reuters) - Bank of America Corp's (BAC.N) Merrill Lynch unit agreed to pay $160 million to settle a racial bias lawsuit that went through two appeals at the United States Supreme Court, the New York Times reported, citing the plaintiff's lawyer.
Longtime Merrill broker George McReynolds filed the lawsuit in 2005 accusing the brokerage of steering blacks into clerical positions and diverting lucrative accounts to white brokers, resulting in lower pay and fewer career growth opportunities.
The payout in the suit, which was filed on behalf of 700 black brokers who worked for Merrill, would be the largest sum ever distributed to plaintiffs in a racial discrimination suit against an American employer, according to the New York Times.
The preliminary settlement was confirmed to the newspaper by a spokesman for Merrill Lynch and Linda Friedman, a Chicago lawyer who represents the brokers. (link.reuters.com/wes62v)
"We are working toward a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisers," Bill Halldin, a spokesman for Merrill Lynch, told the paper.
Merrill Lynch and Stowell & Friedman, the law firm representing McReynolds, could not immediately be reached for comment by Reuters outside of regular U.S. business hours.
Reporting by Sakthi Prasad in Bangalore; Editing by Matt Driskill