A managing director suing Bank of America for gender discrimination by what she called an in-house “bro’s club” has set traders on Wall Street buzzing because of a host of other practices alleged in the complaint – including front- running, lying to customers and manipulating bond prices.
The lawsuit by Megan Messina, a 42-year-old co-head of the global structured credit products team, describes practices similar to those at the center of a longstanding investigation of the bank by federal prosecutors in Charlotte, where the bank is based.
For at least two years, prosecutors there have been investigating whether traders engaged in front-running, or trading ahead of client orders, according to a person familiar with the matter. Messina’s complaint, filed Monday in federal court in Manhattan, describes events far more recent.
“We take all allegations of inappropriate behavior seriously and investigate them thoroughly,” Bill Halldin, a spokesman for Bank of America, said this week. Halldin declined to comment on the federal investigation.
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In her lawsuit, Messina alleges her boss ran what she characterized as a “‘bro’s club’ of all-male sycophants.” She said she received only a third of the $5.5 million given a male colleague with the same title. She said she also filed a complaint May 12 with the U.S. Equal Employment Opportunity Commission.
Her allegations go beyond the personal discrimination she said she encountered to cover the bank’s dealings with clients.
Messina, who lives in New York, says she was also the target of retaliation after she pointed out what she characterized as illegal behaviors by some of the people she worked with. Her complaint alleges that in March, she attempted to arrange a trade between Citi Treasury – Citibank NA’s internal investing group – and another client. Her co-head suggested that the bank buy the bonds for its own book.
That was an example of front-running, Messina alleged in her complaint filed Monday. “You do this all the time. But you should know that it is front running, it is illegal, and I don’t agree with it,” she said according to the complaint. The co-head bought the bonds, kept them for the bank’s profit and didn’t offer them to Citi, according to the complaint.
The federal investigation of Bank of America traders was disclosed by the Financial Industry Regulatory Authority in 2013, and is being run out of the U.S. Attorney’s office in the Western District of North Carolina. The U.S. Commodity Futures Trading Commission, the primary regulator of the derivatives market, is also investigating.
Representatives of Citigroup Inc., the CFTC and the U.S. Attorney’s Office didn’t immediately respond to e-mails seeking comment on the lawsuit.
Front-running in various products has long been a concern of prosecutors, who try to ferret out attempts by market participants to take advantage of information not publicly available.
The case is Messina v. Bank of America Corp., 16-cv-03653, U.S. District Court, Southern District of New York (Manhattan). Bloomberg reporters Robert Burnson and Patricia Hurtado contributed.