“An arbitration panel ordered Salomon Smith Barney to pay $3.2 million to a female stockbroker, in the largest sum to be awarded in gender-discrimination complaints that arose after the brokerage firm’s infamous ‘boom boom room’ case,” writes Randall Smith in today’s Wall Street Journal.

“The arbitration procedure was created as part of a 1997 settlement of a high-profile sex discrimination class-action lawsuit against the firm, now a unit of Citigroup Inc. The lawsuit rocked Wall Street six years ago with allegations of sexual harassment of women in a basement area that brokers called a ‘boom boom room’ at a brokerage branch in Garden City, N.Y. That case triggered similar legal actions by brokers in other offices.”

“The discrimination claims — along with others at Merrill Lynch & Co. and Morgan Stanley — have led to changes in the way Wall Street firms supervise, pay and promote female brokers and other employees. In 1997, for example, Salomon Smith Barney agreed to spend $15 million on programs aimed partly at improving its record in hiring and promoting women.”

“At issue in the most recent award was a claim filed by Tameron Keyes, who was hired in 1991 as a broker in the Los Angeles branch of a Smith Barney predecessor firm, Shearson Lehman Brothers. In her claim, Ms. Keyes alleged that males in the Shearson office made sex-related insults; arranged for female strippers in the branch office; played pornographic videotapes in the sales manager’s office; engaged in simulated phone sex on the speaker-phone in the office during work hours; and made lewd comments, some threatening and humiliating, directed at her.”

“The three-member panel, in a decision dated Dec. 12, found the workplace was ‘permeated with discriminatory intimidation, ridicule, and insults sufficiently severe and pervasive as to alter the conditions of her employment and create an abusive working environment.’ The decision also slammed the firm’s ‘failure to undertake any meaningful investigation of these complaints, to interview witnesses,’ to learn whether the allegations were true or impose sanctions on those responsible. Finally, the panel said, the firm retaliated against Ms. Keyes after she complained.”

“A Salomon Smith Barney spokeswoman said the firm is ‘disappointed in the outcome but respects the process. Diversity initiatives during the past several years have helped us break new ground in establishing Salomon Smith Barney as among the most progressive employers in the securities industry in terms of providing a professional and respectful work environment.’ The firm is unlikely to appeal the decision, she added. Grounds for such an appeal are extremely narrow.”

“Ms. Keyes, who still works for Salomon Smith Barney in Beverly Hills, Calif., was awarded $1,521,080 for economic losses, $150,000 for emotional distress and another $1,521,080 in punitive damages, plus legal fees. She declined to comment. Her Los Angeles lawyer, Marvin Krakow, said, ‘Ms. Keyes is very happy with her current branch manager, wants to pursue her career, and doesn’t want to create any disharmony in her office and so doesn’t want to talk to the media.’ “